Risk Management & The Economy

Thoughts given by Richard Meyers, CEO of RMA, Inc.  March 18, 2009

1.  Are Risk Management departments expanding in the current landscape of our economy? Is Risk Management still a viable career?

   To the contrary, Risk Management professionals including brokerage are being laid off every week.  With falling profits, revenue and stock prices, companies are forced to embrace expense controls.  Decisions are being made weekly regardless of years of service.  It is not personal, it is being financially responsible…the bottom line.
 
    I met recently with one of the major brokerage houses and asked if they are going to continue to lay off a large number of employees and the answer was “probably not, but layoffs in this environment would be a monthly event.”  Companies are pressuring their risk management departments to look hard at their staff and to be ready to sacrifice one to two individuals depending on how large their departments are.  No job is safe particularly in this environment.  Department heads are putting their staff under the microscope; who brings the most value, possesses the best potential, and who are high performers?

   Considering that insurance seems to thrive in tough times, this is a great time to either start or maintain a career in Risk Management.  The crisis that we find ourselves in today is a direct result of neglect by Financial Risk Management. It is clear that effective Risk Management will play a significant role in the recovery of our economy.

 

2.  What are the prospects for Risk Managers to be elevated to the Executive level, i.e., Chief Risk Officer (CRO)?

   On a scale of 1 to 10, I would give it a 2.  The issue is, while risk management as a profession has grown to include such responsibilities as ERM, Business Continuity, Business Resiliency, Merger and Acquisitions, Team Contributor and a Strategic Leader, financial officers are still pressing for general Risk and Insurance Management.  One needs to understand that when you look at the matrix of an organization with regards to Risk Management the functionality splits to the left with Risk and Insurance Management and to the right with Financial Risk Management.  In some cases there appears to be a battle between Risk and Insurance and Financial Risk Management as to who should be doing what and who shall lead the integration of the two functions under the umbrella of ERM.

   The issue for Risk and Insurance professionals is they generally lack the required business, verbal, written, presentation and strategic leadership skills that are more accessible to professionals that are on the Financial Risk Management side.  One needs to understand when looking at the left versus the right that Risk & Insurance professionals typically come from a prior claims, brokerage, underwriting and safety background, which is traditional to Risk Insurance Management.  On the other hand Financial Risk Management professionals come from Treasury, Finance and Accounting and are more afforded the training and developmental skills that are more applicable towards the integration of Risk & Insurance and Financial Risk wrapped into an Enterprise wide program.

    The Risk & Insurance Management community needs to come to grips with the fact, We need to help these professionals to become business partners of their respective working environments and stop emphasizing Risk & Insurance professionals to be better tacticians.  If we want typical Risk & Insurance Managers to be viewed by their management as business partners, we need to commit to a strategy of developing those business skills that will make them ready and allow them to compete with Financial Risk professionals.  For the most part, Risk Management still operates as a traditional functionality.  These Risk professionals need to come to grips with the fact that their functions are more about metrics than insurance.

 

3.  Important things to consider when losing your job.
 
   First, losing your job may be a blessing in disguise.

  • View the loss of your job as an opportunity rather than a setback.
  • Keep a positive attitude and do not dis your employer even if you may have good reason to.  We cannot blame our employers for trying to survive their business.  This is not a personal decision, but a responsible one.  Think of it as if you were running your own company and you find yourself having to deal with falling profits and revenue.  The big picture is your company needs to survive and you need to make tough decisions to give your company every opportunity to ride out the hard time and position itself for the next wave of opportunity.
  • Do not be shy about asking for help.  You will be surprised what people might do for you.
  • Even in my own case as a small business entrepreneur, I find myself having to subscribe to the very advice I am offering readers.  My conclusion as an executive search professional working in this economy is it’s all about people helping one another

 

4.  Step by step checklist on how to secure a job in Risk Management.

First, losing your job may be a blessing in disguise.  View this as more of an opportunity than a setback.

  • Be fiscally responsible and identify your expenses and determine what’s necessary.
  • What financial resources do you have i.e.; savings, emergency funds and severance.
  • You now have a new full time job…to find one.
  • Put your resume together and do not necessarily rely on your own ability to produce one.  There are some excellent professionals out there that can help you take the fluff out of your resume and incorporate the real substance that helps not only to represent you, but to sell you.  Remember, the purpose of a resume is to get you interview.  If that is not happening, then you are applying for the wrong jobs, lack the experience or may not be representing who you really are.
  • dentify who you are and what you bring to the table.
  • Identify your strengths.
  • Establish your network of professionals that you have worked with and who know you well.  In this environment, it might not be what you know, but who you know.
  • Seek out a professional recruiter within your discipline that can help market you to employers.  While recruiters may not have all of the opportunities for you, they provide a significant value in bringing your resume to the top of the pile.  As we all know, that pile today is quite high.  Recruiters can help present you as a person, rather than picking a piece of paper out of a pile with a name on it.
  • Look at all of the major job boards that are general and industry specific.  It is very important that you establish an appropriate cover letter that will act as a positive introduction to your resume.

 

5.  Leveraging your memberships with trade associations, i.e. RIMS.

Getting involved with your trade association is key.

  • Volunteer for Committees.
  • Participate in panels or speaking engagements.
  • Participate in conferences.
  • Take self improvement courses.
  • Become a topic specialist.
  • Join social networks i.e., LinkedIn.
  • Establish a network of professionals.

   RIMS recently has established their own LinkedIn/Facebook network for RIMS members.  I would clearly take advantage of this.  Just look at how quickly the networks have grown on LinkedIn and Facebook.

6.  Insuring my job.

  • Just doing your job does not cut it anymore.  You need to focus on what you can do to stand out and be visible.  Take on the assignments no one else seems to want.
  • Think about what you can do to help generate revenue or cut expenses.  Be a part of the solution rather than the problem.
  • It is all about your attitude.  Stay positive and do not be a complainer.  Be amongst the people that are recognized as the keepers.
  • Never stop learning.  The day you think you know it all is the day you realize you know very little.  The more you know, the more valuable you are particularly in an environment where employers are cutting and identifying those who have multiple skills and abilities.
  • Remember when you were in school and you were afraid to raise your hand and answer the question?  Today is the time to raise your hand and be heard that you are a team player and want to help in any way that you can.

Overall, your employer is in trouble.  Be there for them, and they may be there for you.