A Masters in Risk Management is a degree that prepares you to work in the business or financial sector. These positions are expected to have high demand in coming years as companies instill more rigorous spending habits and money management techniques. A risk management expert can help a company make important decisions that make or break the company’s future. Working in risk management is usually a high stress environment with many long hours. Typically, someone with a background in finance, statistics, and mathematical modeling will be an ideal candidate for a career in risk management, because the work involves a great deal of analysis, trend-monitoring, and mathematical modeling of financial plans Risk management is used in many industries, but financial companies employ the highest number of risk management analysts.
What Do Risk Managers Do?
The main goal of a risk manager is to allocate the funds and other resources of their company so that even if something goes catastrophically wrong in one segment of the business, other parts of the business remain unharmed. This can be done by:
- Diversifying an investment portfolio, so that high risk investments are hedged by ones with lower margins, but higher likelihood of success.
- Maintaining a good balance of debt to income, so that a company still has leverage if a situation crops up where it needs some liquid capital to get out of a bad situation.
- Insuring a company’s physical assets, and protecting them from damage and devaluation in other ways.
Risk management experts are often brought in to work on a contract basis instead of as a full time employee. A good risk manager could work in a consulting role or as a contractor for several clients at once, thereby maximizing his or her personal income and workload. Contract jobs usually involve working with a particular department or division of a company, and making suggestions to the top management of the division, which they can implement and test for efficiency at minimizing losses.
A risk management expert breaks projects down into several parts such as integration management, scope management, time management and quality management. There are many factors to assess when examining a new project. Risk managers usually specialize in a particular field, because knowledge learned from one project can usually be applied to the next, and a deep expertise can build up over years of working with the same types of client. Fields of expertise for risk management analyzers may include:
- Public service
- Real estate
Prerequisites for a Risk Management Degree
Many obtaining a Master of Risk Management have an undergraduate degree in the subject they will go on to become experts in. This means someone with undergrad work in finance will go on to obtain a Master of Risk Management and then find employment at a hedge fund after graduating. Someone with a background in environmental science may go on to work for a government-funded environmental agency. This is important to note when studying risk management. Almost everyone has a background in another field, even a very general one such as business. Hardly anyone studies only risk management.
Ultimately, a risk management expert helps a company or organization understand how the project will work through its development stages. A risk management expert helps identifies who the key players are and what their responsibility should be during the project. Risk management experts also help bring in other contract employees to work on a project. This is where a risk management expert is the most beneficial to a project. Often companies want to rush a project along regardless of hiring the right people or assessing if it’s the right time to move forward with the project. A risk management expert is able to analyze the situation and circumstances and make a call on when and how to go about hiring and moving into the next stage of the project. If a project gets pushed back because the right people aren’t on board to make the project successful, a risk management expert can help the powers that be understand it isn’t the right time to move forward. Moving forward with people who may not be able to perform or fulfill their duties will end up costing the company time and money in the end. A risk management expert also helps those involved in a project communicate effectively. No matter how many emails are flying around, if this isn’t effective communication, it isn’t helping the project. All parties involved should understand what’s required and what the next stages of the project are.
Job Outlook for Risk Management Experts?
Risk management experts usually experience fierce competition for contract or employee positions. It is all about networking and making your services essential for a company. Companies often reach out to the same risk management experts time and time again if they have a good track record. It’s important to network with other professionals and attend industry events to get your name out there. A website and social networking profiles are proving to be useful tools for risk management experts.
The pay for a risk management expert ranges from $40,000 per year to over $100,000. It depends on experience and the industry you work in. Risk management specialists are often hired in the financial sector, and so are built right into the budget of many firms. Risk management experts are not as common in other industries, so the pay will be less predictable. It is up to you to increase your earning power by making your services a necessity for a company working on a new project.
Classes Offered in Risk Management Programs
The classes involved in a risk management degree program are ones that will teach you to analyze numbers and also accelerate insight so that you can make good decisions and strong investments quickly. Some classes you might be able to take include:
- Modeling for Strategic Insight: This class will teach you how to build data models using Excel and other spreadsheet and probabilistic modeling software, so that you can analyze the viability of a strategy through simulation before taking on any real risk.
- Collaborative Decision Making and Negotiatioin: This class addresses both collaborative and competitive decision making models, and discusses managing business relationships and seeking “win-win” conditions in business situations.
- Converting Strategy to Action: This is a project management course that emphasizes the fast-paced, constantly innovating business climate of today. Elements of the course will include time management under pressure, efficient resource deployment, and aligning individual projects with the long term strategic goals of a company.
These courses are made to build on an already existing body of business knowledge and experience. A student with no work history in corporate settings may have a hard time understanding and implementing the strategies discussed. Successful risk management involves a combination of tested business strategies and empathy, because the only way to work with a team efficiently is to know each member’s strengths and use them accordingly.
The Best Risk Management Programs
A good time to go back to school for risk management is when you’ve already had a few years of experience in some type of business, and are interested in scaling up your ability to manage people and resources in a large and fast-paced corporate situation. If that sounds like you, then clicking around the list below can get you into contact with some schools offering high quality, accredited programs in risk management and other aspects of business that can help relight the fire under your career.