Both financial and non-financial firms are ratcheting up their hiring of risk managers, according to recruiters who say demand is strong at varying levels of experience.
The need to hire risk managers is being fueled by increased worries over regulatory compliance and concerns at financial institutions about maintaining credit standards that were put in place at the start of the Great Recession.
People who are just beginning their careers are advised to obtain a certification such as the Financial Risk Manager (FRM) and Energy Risk Professional (ERP) certifications administered by the Global Association of Risk Professionals (GARP).
The FRM was first administered in 2001 and is much more well-known than the ERP, which is three years old. The numbers of people taking both tests are increasing, according to GARP spokeswoman Kathleen Alcorn.
Credentials, though, are not everything.
“It depends,” Frank Risalvato, president and founder IRES Inc. of Charlotte, tells eFinancialCareers. “If the person has a good work ethic and a good employment history, then the credential can certainly help. Sometimes (for weaker candidates) it might not be enough to make a difference.”
Michael Woodrow, president and founder of Risk Talent Associates LLC, a Chicago-based recruiting firm, echoed Risalvato’s views.
“I have never had a client ask for it,” he said, adding that lower-level professionals would benefit from the certifications.
Risk managers were able to weather the layoffs on Wall Street pretty well because their skills are in such high demand. Concerns over compliance with regulations has caused demand for risk managers to intensify even further. That’s why having good communications skills is vital for people looking to advance in this career.
“There aren’t a lot of risk people on the street,” Woodrow told eFinancialCareers, adding that clients are especially interested in candidates that “understand what the regulators care about.”
Demand from banks is stronger than asset managers including hedge funds. Non-financial firms are hiring as well because of heightened scrutiny over issues such as computer security.
Companies are looking for “everything from risk analysts all the way up the chain of command,” Risalvato said. “January and February were busy for us. We did double the amount of hires we did last year.”
Risk can be a lucrative career. A credit officer responsible for a line of business at a super regional bank can earn about $300,000 a year. The compensation increases, of course, as responsibilities grow. Bloomberg reported that Bank of America Chief Risk Officer Bruce Thompson earned $11.4 million in compensation in 2010, the most awarded to an executive at the bank.
“His stature isn’t an anomaly," the news service noted. “Citigroup, AIG and UBS are among other companies raising the profile of risk executives.”
Indeed, the trend is continuing. Risalvato estimates that salaries are up 5 percent to 6 percent in 2012 versus last year. One bulge bracket firm may have doubled the compensation of a senior risk manager to retain him, Woodrow said.
Though hiring ebbs and flows, experts remain optimistic. “I expect to continue to be busy for the rest of the year,” Woodrow said.