How to become a risk manager and boost your career

By Indeed Editorial Team

Updated 24 August 2022 | Published 29 September 2021

Updated 24 August 2022

Published 29 September 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Risk management is a specialised job that is applicable to multiple industries. If you have a good eye for detail and are looking to advance your career, then knowing how to become a risk manager may be a great opportunity. There are certain qualities and accreditations you need to become a risk manager. In this article, we discuss what risk management is, what the duties are of a risk manager and how to become one.

How to become a risk manager

Risk managers rely on their talents, skills and acumen to identify and manage risks on behalf of businesses and individuals. There is a certain level of experience that you must achieve to become a risk manager, including attaining certain qualifications. However, risk management encompasses a wide range of job opportunities, whether it is working from remote locations or in the healthcare sector, which makes it a truly rewarding career. Here are some steps explaining how to become a risk manager:

1. Consider whether the role is for you

For risk managers, it's not all about having the right skills or qualifications. There are certain personal characteristics that are favourable to this career. For example, risk management is an essential tool for many businesses, and they may look to you to provide quick and efficient solutions to their problems. Therefore, risk managers must be able to thrive in pressured environments and think on their feet. You are likely to work in a corporate environment, so consider whether this is right for you.

Also, you must have a genuine interest in mitigation and risk management to do well in this career. This means that you enjoy working with numbers and analysing vast amounts of data to create a simple and justified report. You must have a calm and collected persona that allows you to present information with ease and confidence. Sometimes the solution to potential risk isn't easy, yet risk managers must have a relentless attitude that ensures they don't quit and continue to pursue progression.

Related: 7 ways to communicate effectively at work

2. Develop your skills

Once you've decided whether risk management is for you, it's time to start building your skills. You may have relevant experience as a financial analyst, which gives you a lot of specialised skills that are necessary. However, to progress into a risk management role, you may consider improving your leadership or communication skills. What's more, identifying which skills you need to work on could determine what experience you need or what qualifications you need to obtain. Here are some other skills to develop:

  • commercial awareness

  • problem-solving skills

  • ability to work well with teams across multiple departments

  • organisational and time management skills

  • ability to analyse numerical data and evaluate costs

  • analytical skills that are found in precision and controlling outcomes

  • research skills

  • written communication skills that allow you to present complex information in a succinct manner

  • broad business skills, such as administrative abilities and professionalism

Related: 13 leadership styles and their characteristics

3. Get relevant education

The educational requirements necessary for becoming a risk manager vary according to different employers. Formal education isn't mandatory, but it gives you a competitive edge over other candidates. There are many university degrees that are relevant to risk management, including:

  • IT

  • economics

  • statistics

  • business management or studies

  • science

  • maths

  • engineering

  • law

  • finance

  • accounting

It's important that you take modules that are useful to risk management roles. That is, some finance or business degrees offer courses in investment analysis, financial markets, portfolio management or risk management itself. If you have a degree in an unrelated subject, you may choose to pursue a postgraduate degree in a more relevant subject. Some universities actually offer a master's scheme in risk management.

Related: What is a risk management framework? A comprehensive guide

4. Gain accreditations

If you prefer to avoid full-time education, it's possible to gain accreditations from risk management courses online. These courses are more suited to individuals who have relevant experience or knowledge and only want to focus on a specific sub-topic, such as health and safety risks or corporate administration. If you have relevant experience or a degree, these courses aren't necessary. However, they can help to demonstrate your proficiency. The Financial Risk Manager (FRM) accreditation is a good choice for those wanting to become risk managers.

The Global Association of Risk Managers (GARP) offers FRM accreditation, so it is a widely accepted accreditation. Candidates must pass two exams and work in the field for two years to pass this course. There are a number of other institutes or organisations which offer valuable accreditations, including the CFA Institute, the National Examination Board in Occupational Safety and Health (NEBOSH) and the Chartered Insurance Institute (CII). You can choose to undertake these courses on a part-time basis whilst taking an apprenticeship in risk management.

Related: How to use risk identification within a risk management plan

5. Gain relevant experience

Recruiters want candidates who have relevant experience because this is where outlined skills are developed and maintained. Only a select amount of companies hire risk managers through graduate schemes and provide in-house training, so it's crucial that you plan your own experience. Practical experience is also useful, as it allows you to develop a network of contacts that could be useful in the future.

Typically, employers look for candidates who have at least five years of experience in risk management or a related field. You may start out as an auditor, loan officer or accountant. It's not necessary to obtain a senior role in these related fields as entry-level positions in finance or business usually suffice.

Related: 13 tips on how to get into finance with no experience

6. Obtain necessary licensure

Risk management is applicable to many industries, which means that sometimes risk managers need to obtain secondary licences, which gives them the ability to work in specified roles. For example, the health sector requires individuals to hold a medical licence to practise risk management. Therefore, if you're looking to hone your craft in a specific industry, do your research on permissive licences first.

Related: A guide to risk management systems (with uses and FAQs)

What is risk management?

Risk management is the process by which risks associated with business decisions or external changes are identified, analysed and controlled. These hazards can encompass many things, including legal liabilities, strategic errors and financial uncertainty. Risk management ensures that businesses are proactive when it comes to identifying and managing problems.

A risk manager summarises what could go wrong under certain circumstances and what impact this may have on the business in the future. As a risk manager, it's your job to consider each of these scenarios on a case-by-case basis and ensure that risks do not affect business operations. Risk is an inevitable part of a company or organisation, which means that risk management is applicable to multiple sectors. This means that there are limitless career prospects for risk managers and several opportunities to progress in the role.

Related: How to perform a risk analysis (with tips)

Duties of a risk manager

Risk managers spend the majority of their working day looking at various documents, reports and projects, determining whether the company has overlooked any potential risks. However, risk managers also perform a number of administrative tasks to ensure that business runs smoothly. Some of these include:

  • analysing market trends to see how new projects are likely to be received by the target population

  • using statistical models and valuation tools to generate analytical data

  • creating risk management plans and proposing them to senior professionals

  • reporting to business owners and senior stakeholders directly, where risk is imminent

  • presenting risk reduction and control measures to a company in a clear and efficient manner

  • implementing risk strategies based on thorough planning and development

  • ensuring that companies comply with corporate standards and other legislation

  • liaising with other departments and risk officers to stay aware of new projects or policy changes and consult a secondary professional

Related: The different types of statistical analytics (with examples)

Ways to progress in your risk management career

Risk management is a job that depends on the development of personal capabilities and experience. Employers seek out individuals who have impressive CVs and who continue to demonstrate their ability to adapt and learn through relevant accreditations or training opportunities. If you're looking to increase your salary as a risk manager, it may be worth considering a relocation.

Some areas have a higher demand for risk managers, which means that salaries are typically higher than the national average. The average salary for a risk manager is £49,757 per year. However, London is the highest-paying city for risk managers, typically offering around £61,530 per year.

Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries‌ ‌may‌ ‌‌vary‌‌ ‌depending‌ ‌on‌ ‌the‌ ‌hiring‌ ‌organisation‌ ‌and‌ ‌a‌ ‌candidate's‌ ‌experience,‌ ‌academic‌ background‌ ‌and‌ ‌location.‌ Please note that none of the companies mentioned in this article are affiliated with Indeed.

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