Risk Manager Skills: Definition and Examples
Updated January 26, 2023
A risk manager's job involves managing an organization's risks and mitigating their effect. An effective risk manager must have a skill set that helps them identify problems, evaluate solutions and communicate the necessary measures. Understanding what skills are essential to the role can help you become a more effective risk manager. In this article, we discuss what risk manager skills are, discuss steps for improving them and explore how to use them in the workplace and highlight them on your resume.
What are risk manager skills?
Risk manager skills are the distinct set of abilities that qualify risk professionals for their diverse duties. Risk managers use analytic skills to uncover potential risks and communication skills to explain these risks to the company's stakeholders. Their financial skills help them calculate risk, and problem solving helps them find ways to mitigate those risks and limit the chances of them occurring. A risk manager needs to use their skills to identify both external and internal risks associated with an organization.
Related: Risk Management: A Definitive Guide
Examples of risk manager skills
Some of the most important risk manager skills are:
Knowledge and understanding of regulations
A major part of a risk manager's role is to maintain the current status of any regulations related to the field in which their organization operates. Ensuring that the company and its goods or services comply with all industry standards is crucial to many industries, as lack of compliance can lead to product recalls and significant fines. Staying up to date on compliance and regulation requires an ongoing commitment.
Being able to anticipate and assess risk requires the analytical skills required to study relevant data. This not only implies drawing conclusions and using them to make strategic decisions but also being able to identify gaps in the data and areas that require further research. Correctly analyzing data typically requires a natural ability to draw relevant conclusions from the available information.
Besides identifying existing and potential risks, risk managers also need to work with the company's management to develop strategies for mitigation. These strategies often require actions that affect the organization over the long term, meaning that risk managers need to provide solutions that consider how they affect the company's future. Risk managers also need to identify various opportunities associated with risks.
Financial risk is common to all businesses, so risk managers need to have reliable financial skills to identify and mitigate those risks. They need to differentiate the risks that they can manage from the ones that are beyond the organization's control. Most major employers seek risk managers with academic credentials in finance.
Risk managers are responsible for the clear communication within a company of any risks and risk strategy. They must have effective written and verbal communication skills in order to appeal to a wide range of employees, from top management to entry-level employees. They often use a variety of media tools to communicate both company-wide and department-specific risks.
Once a risk manager identifies a risk, they start working on ways to minimize its impact. This can involve analyzing the nature and causes of the risk, creating strategies to either eliminate or mitigate it and then implementing those strategies. Problem-solving skill sets often require qualities such as critical thinking, focus and a natural desire to solve problems.
Ability to work under pressure
Managing risk is often a stressful occupation, because errors can have a significant consequence on the company's well-being. Risk managers need to operate using their best abilities regardless of pressure. It's best to establish multiple systems and strategies that limit the chances of a risk materializing.
How to improve risk manager skills
Here are some ways you can improve your risk management skills:
1. Create methods of communication
Good communication skills are important for a risk manager because they need to stay in contact with every department. When a risk manager develops methods of effective communication, such as through an email newsletter or a company communication platform channel, it's easier to update employees about any discovered risk. Through open communication, employees can also provide relevant feedback that a risk manager can use to eliminate or mitigate those risks.
2. Continue your education
A risk manager's professional education should continue throughout their career. It's beneficial for them to continue studying and researching elements such as industry regulations, economic climates, changing consumer preferences and product characteristics. This can help them maintain relevant risk mitigation strategies with high odds of success.
3. Improve your organizational understanding
Risk management usually involves all of an organization's departments, so a risk manager should study its operations and procedures to maximize their abilities. As you do so, identify any external risks, such as regulatory compliance and changing economic climates. It's also important to identify internal risks, such as poor employee morale or a lack of appropriate tools. Having better knowledge of your organizational structure may help you forecast areas of weakness.
4. Learn from past mistakes
It's unrealistic to set a risk management goal of eliminating all errors and miscalculations. Instead, set SMART goals that are specific, measurable, achievable, relevant and time-bound. Analyze your results for success and errors and evaluate your errors to ensure you don't repeat your mistakes.
Related: What Is Risk Analysis in Business?
Risk manager skills in the workplace
Consider these ways of using your risk manager skills at work:
Knowledge and understanding of regulations
Risk managers are expected to use their knowledge of relevant laws and regulations to keep their company in compliance. Their knowledge acts to shield operations from risky behavior and prevents illegal activities. Because the regulatory climate changes often, it's helpful for a company to know that their risk manager is responsible for regulation maintenance.
Risk managers rely on their communication skills in the workplace. They listen to members of various teams and divisions to identify areas of risk. They evaluate operations and processes and discuss their analysis and possible solutions with involved team members. Risk managers communicate needs and solutions with company leaders and other employees.
Ability to work under pressure
Sometimes, companies seek the guidance of a risk manager when a situation is very challenging, and in order to be most effective, a risk manager must not let the pressure or emotions distract them. It's important that they maintain their focus and take necessary actions. They can also use their communication skills in these cases to encourage serenity with the solution and new strategy.
How to highlight risk manager skills
When applying for risk manager positions, It's beneficial to highlight your relevant skills to hiring managers. Depending on where you are in the interview process, here's how you can do that:
Risk manager skills for resume and cover letter
You can add your relevant risk manager skills to your resume by placing them in a separate section between your work history and education. Before creating the skills section, reread the job description to find what skills are important to the employer. By customizing your resume to meet the employer's expectations, you might have a better chance of getting noticed and invited for an interview.
Risk manager cover letters are usually more effective when they focus on experience, achievements and career highlights. However, using the skill keywords from the job description throughout your cover letter can help a hiring manager notice your qualifications.
Risk manager skills for the job interview
During your interview, prepare yourself to answer questions about various types of risk situations. In your answers, describe how your skill set can help you manage the responsibilities of the position. Relate your answers to specific situations of experience in which you successfully used these skills. Form your answers with the STAR response technique, which consists of:
Describing the situation
Explaining your task
Mentioning what actions you took
Showing the positive results of your actions
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