Managing risk is essential for all businesses. They need to be aware of what potential pitfalls and hurdles are ahead of them so that plans can be put into place and preparations made.
Also, effective risk management can help a company choose the right direction in both the short and long term. By studying risk management, you will be taking the first step to a lucrative career that is needed across many industries and sectors.
Here are some of the reasons why becoming a risk management professional will make you a very attractive employee.
1. Companies need to avoid risk
It is vital for all businesses to have a skilled individual or team to help identify potential risks. This can make all of the difference when their competition fails to notice something around the corner that their risk management team has spotted and provided a solution to avoid it. Mitigating risk and limiting the negative impact of future events can be a very rewarding and satisfying job.
2. There are many different types of risk
The first is credit risk. This is when the business is owed money and it is not paid back. When a business relies on these payments to stay afloat, this needs to be highlighted as a potential risk and preparations made in case the payments are not made.
Market risk is when there are factors that the business is unable to control in play such as interest rates or the cost of raw materials. As a member of the risk management team, it would be your job to help identify where this may be likely to cause an issue.
Fraud, the actions of employees, clients and the business as a whole fall under operational risk. You also have to keep an eye on reputational risk. With the advent of the 24-hour news cycle and social media, this has become a very challenging and exciting part of risk management.
3. Without a risk management team, there is a real danger to the business
If a business does not have a risk management team, there will be a greater chance of catastrophic failure and the business could close. Risk management professionals are able to not only help identify potential future problems, they also give clients and lenders more confidence in the business. Companies that have an in-house risk management team and well-established plans in place will be more willing to increase credit limits and more.
4. You will be helping to prioritize risk
This is very important for a company that has limited resources at their disposal. As a risk management professional, you will be charged with protecting the company’s interests and assets. You will have to prioritize the risks that you identify and make sure that you are giving the company actionable information that they can use to ensure the financial and reputational future of the business.
5. The plan you put together will not just sit in a filing cabinet
Having a risk management plan is not something that is drawn up and then discarded in a draw. Far from it in fact. The information that is contained in the risk management plan will have far-reaching implications and potentially have an effect on the day to day operations of the company that you work for.
6. Risk management professionals are always in demand
For all of the reasons above, this career path is one that you will be able to explore across a lot of different companies. Once you obtain a risk management certification, his will open a great many doors and you will be able to find a lot of opportunities that were previously not available to you.