In the current economic instability, all business activities have been severely affected. Before the pandemic hit, most companies could operate smoothly thanks to the economic predictions; however, things are changing now. Economic predictions are becoming a challenge due to the COVID19. No one knows when the disease will be fully cured, or when the vaccine will be fully developed so that we can restore to our daily activities. Therefore, the current priority of many businesses now is risk management.
Risks can be formed by external factors or within the business. External risks are issues like exchange rates, interest rates, economics, politics, etc. Generally speaking, external risks are issues that not under the control of any company. As for internal risks, these are issues that come from within the business organization such as rule violations, information leakage, non-compliance.
Risk is one of the main factors affecting business decisions. Managers who do not foresee risks in advance will be prompt to make wrong business decisions. As a result, companies are not focused on identifying, mitigating, and managing risks before they turn into problems impacting business operations.
The ability to manage risk will help businesses make decisions with more confidence. Experts in this domain will help business key decision-makers come up with initiatives to deal with multiple underlying issues. The risk management capacity of the enterprise is no longer a seasonal job, it is now a strategy to protect a business from the unpredictable market trends during economic instability.
By handling risk management well, businesses will gain an edge since they have the tool to create a strategic competitive advantage in the current challenging business environment.
1. Why is risk management important?
The larger the organization is, the more risks it faces. Therefore, risk management strategies now have become more sophisticated. Risk management is an important area in any organization because, without it, it is not possible for a business to accurately define its future goals. Because, if the company defines its goals without considering the risks, it is likely that they will get off track and be panic when risks turn into real problems that need to be addressed.
2. Career opportunities
In recent years, many businesses have had a risk management department. This department is responsible for identifying risks, recommending appropriate strategies to prevent, implementing these strategies and encouraging all employees to cooperate.
An ounce of prevention is worth a pound of cure – Benjamin Franklin
With a degree in risk management, especially in graduate programs, you can become an expert in a field that has a serious shortage of talents; you will be welcomed in all industries and businesses like banking, finance and insurance companies as well as multinational enterprises, hospitals, logistics enterprises, and even aviation.
3. As a specialist in risk management, you are responsible for
- Develop, implement and apply regulations, rules and procedures to ensure legal activities and risk-free operations right in the process.
- Establish policies, frameworks and systems to prevent, avoid, and forecast if there are occurrences or threats to occur.
- Using financial instruments, insurance and protection tools, financial derivatives, etc to ensure the lowest possible (financial) risk if it happens.
- Set limits on financial loans to ensure a balance of income and expenditure and minimize financial risks.
- Monitor activities of departments to ensure compliance with legal regulations and procedures.
- Work with media and stakeholders to ensure prevention, avoidance, and handling of media crises.
- Establish a worst-case scenario if the company goes bankrupt.
4. Very high salary and remuneration:
According to the US Bureau of Labor, specialists in this area will be paid around:
- Mid-level Risk Management Executive: $127,990 1 year ($61,53/hour)
- Senior Risk Management Executive: Over $208,000 1 year ($100.00/hour)
- Risk Management Executive: $67.620 1 year ($32.50/hour)
5. How can I become a risk management executive?
To work in risk management, you need a bachelor’s degree in finance with a major in risk management, or a business administration degree in risk management, or a bachelor’s degree in insurance and risk management, and so on. There are many degrees you can refer to as each university has a degree with a different name.
If you already have a bachelor’s degree, you can study for a master’s degree. Some universities and colleges also offer related certifications, which will help you achieve more in your career path.
If you are a challenger, a true adventurer, especially interested in solving problems related to unstable risk factors affecting the business, then risk management is the right profession for you!
Read more here for more information about the Master of Risk Management Program
Article source: The Swiss Institute of Management and Innovation