Risk management salaries are higher “across the board,” but job security in this troubled economy depends on several factors, including just how far risk managers have come in proving their worth, a board member of the Risk and Insurance Management Society warned.

The highest-paid risk management position, at nearly a quarter of a million dollars, is chief risk officer/vice president-risk management, according to the “2008 Risk Management Compensation Survey,” put together by the New York-based RIMS.

CROs are averaging a salary of $170,683 and total compensation of $220,233, while risk analysts are on the lower end of the profession's totem pole, averaging $51,852, with total compensation of $54,485.

“The [higher salary] trend is definitely up across the board,” said Michael McDonald, board liaison for membership and chapter services at RIMS, which did not provide pay-scale growth figures for its proprietary survey. “One would hope we are making a bigger impact with the C-suite and they are understanding better what we do.”

Mr. McDonald, vice president of risk management at Quality Distribution Inc.–a trucking company and the largest hauler of bulk materials in North America–said the current economic crisis is “going to be here for a while, and I don't think a bailout will turn things around quickly.”

While the slowing economy's impact on the job market is likely to be negative, he said risk managers can do much to add value to their positions and thus insulate themselves from layoff or outsourcing temptations. “I would tend to think that the more we as risk managers do to make the companies understand the critical nature of our function, the greater our opportunity to be retained when the company is downsizing,” he said.

Mr. McDonald has personal experience with downsizing, given that his Tampa, Fla.-based employer laid off 17 percent of its work force earlier this year. “I picked up some new responsibilities and I've asked for new responsibilities, and I hope that's what other risk managers are doing,” he said.

He added he believes that in general, risk managers will come through “better than a lot of positions,” but that “we have to cut back like everyone else.”

Mr. McDonald noted that risk managers are branching out from traditional risk management responsibilities–”and that's why you're seeing more CROs and more enterprise risk managers and even more vice presidents,” he observed.

Risk managers in the Northeast were paid the highest, with an average salary of $151,200, while the lowest-paid region was the Southeast, at $103,500, the survey found. Second-highest were risk managers in the West, whose salaries averaged $130,300.

The 2008 survey presents compensation data for 11 different jobs, categorized by company size (based on full-time employees and annual revenues), risk management department size, industry and geographic location. This year, for the first time, information on chief risk officers as well as other senior-level risk management positions was included.

The results reflect data submitted by individual risk management professionals working in more than 1,490 organizations in the United States and over 171 organizations in Canada, RIMS said.

In total, 2,180 surveys were completed online by RIMS members between May 5 and June 30, 2008. This survey is the fifth in an annual series conducted by RIMS.

Survey data was compiled by enetrix, a provider of online survey services and e-commerce solutions to associations.

The length of time in the risk management field, however, for the most part correlated with salaries. For example, on average, CROs were in risk management for 18.8 years, while claims analysts, at the bottom end of the pay scale, had spent an average 7.9 years in the industry.

Approximately 58 percent of the U.S. respondents work in organizations with more than $1 billion in annual revenue. About half work in publicly owned organizations (49.9 percent), with nearly one-third (31.9 percent) working for private employers, the poll found.

A majority of the U.S. respondents were insurance and risk management directors (772), insurance management managers (363), and chief risk officers or vice presidents-risk management (176).

Special Reports /

Salaries Rising, But Economic Crisis, Layoffs Put Risk Managers On The Spot

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