Risk Managers

Pay Disparity Seen in Risk Management Roles

Lower pay for women in the field may be due to lower educational credentials or less time on the job.
By: | December 16, 2015 • 4 min read
Topics: ERM | RIMS | Risk Management

Female risk managers in the United States tend to earn nearly 25 percent less than their male counterparts, according to a new survey by RIMS.

The biannual “RIMS 2015 Compensation Survey” found that the median annual base salary for male U.S. risk managers was $130,000, compared to $101,000 for women.

Part of the disparity may be because male risk managers tend to have higher levels of education. Forty-two percent of males in the profession have a bachelor’s degree versus 31 percent of females.

Men also have a median of 19 years’ experience in risk management, compared to 15 years for women, the survey found.

Overall, the median annual base salary for all U.S. risk managers increased by 3.7 percent from the previous year, to $115,000 on June 1, 2015.

Overall, the median annual base salary for all U.S. risk managers increased by 3.7 percent from the previous year, to $115,000 on June 1, 2015.

Those with a degree higher than a bachelor’s typically earn $20,000 more than those without, while those with at least 25 years’ experience in the field brought in $55,000 more, on a median basis, than those with fewer than five years’ experience, the survey revealed.

There was also disparity in the earning potential between different job roles.

The survey found that the position with the highest median salary, of $170,000, was chief risk officer or vice president of risk management.

In contrast, claims manager or workers’ compensation claims managers earned only $73,000 for their duties.

Another area of greater earning potential were directors of risk management with ERM responsibility, who make, on average, $9,000 more than their insurance counterparts.

“No matter the maturity of an organization’s risk management program, understanding the cost of employing specialized personnel is critical to any senior leader’s decision-making process,” said RIMS President Rick Roberts.

“The idea of having the entire organization thinking about risk and contributing to the risk management process is extremely beneficial,” he said.

“Many organizations are catching on to this. The number of risk professionals with ERM experience is far lower than those without, making them in higher demand.”

Roberts added that claims personnel were also more highly valued, reflected in the fact that three out of four areas that had a salary increase were in technical or specialty positions — claims or workers’ compensation managers, claims analysts and risk management analysts.

“The ramifications of not addressing claims expediently has the potential of seriously damaging an organization’s reputation,” he said.

“Whether it’s ERM or another specialty,” he said, “the more ways you can improve yourself professionally, the more you can offer an employer.

“Expanding your breadth of knowledge is a sure way to advance professionally and increase the invitations one might receive to join high level discussions about organizational strategy.”

The survey, which was based on responses from 1,145 full-time risk professionals in the U.S. and Canada, found that the median value received by those eligible for additional cash or incentives and who stayed in the same position for the year to June 1, 2015 (77 percent), was $18,000.

Nine out of 10 received cash in the form of bonuses (89 percent), with profit sharing accounting for 16 percent, incentive pay 11 percent, and overtime only 1 percent.

About two-fifths of U.S. risk managers work for publicly traded organizations, one-third were in private industry and one in 10 were either in government or at a nonprofit.

Performance was the key in determining the amount of cash compensation received (94 percent of those eligible), with the organization’s performance (84 percent of U.S. risk managers) more crucial than the person (66 percent) or department (35 percent).

In terms of medical cover, 76 percent of all U.S. risk managers were offered a preferred provider organization.

Of the 96 percent of U.S. risk managers offered a retirement plan, 60 percent were given the choice of a defined-contribution plan.

Most U.S. risk managers also qualified for four weeks’ paid time off per annum, while the most common additional benefits included professional association dues, a cell phone, mileage reimbursement, an employee assistance program and/or a laptop or tablet.

The profile of respondent also made for interesting reading.

About two-fifths of U.S. risk managers work for publicly traded organizations, one-third were in private industry and one in 10 were either in government or at a nonprofit.

The largest number were involved in manufacturing (16 percent), while the typical U.S. risk manager works for an organization with 20,000-plus employees (25 percent).

The most common role in the U.S. was director of insurance and risk management (36 percent), and the least common was director of ERM/strategic risk manager (5 percent) or risk management analyst (5 percent).

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]

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The R&I Editorial Team can be reached at [email protected]