As baby boomers reach retirement in the coming years, risk management, like any other industry, will be facing a potential labor shortage. The Bureau of Labor Statistics predicts that by 2020 over 60% of the job openings in the workforce will arise due to the need to replace retired workers. According to the risk management research organization The Institutes, the insurance industry alone anticipates needing to fill 400,000 positions by the same year. So, since the need for risk management is not expected to disappear any time soon, many companies will need to figure out how to attract the next generation of workers to their soon-to-be-vacant risk management positions.
Of course, the most basic way to entice new blood into any profession is through competitive salaries. And according to the 2013 Risk Management Compensation Survey conducted by the Risk and Insurance Management Society (RIMS, the publisher of this magazine) there is some positive news regarding salary growth and what risk managers can expect to be paid throughout their careers. While all 11 positions surveyed saw increases in compensation over 2011 (when the survey was last conducted), the lowest-level position-—claims analyst-—saw the greatest gains.
In the United States, a claims analyst’s average base salary of $64,184 represented a 16% jump over 2011 and an almost 24% increase over 2008. And with bonuses, average total compensation for claims analysts came out to more than $66,000. Considering that the average starting salary for new college graduates across all industries, according to the National Association of Colleges and Employers, is just under $45,000, risk management—at least from a financial perspective—would seem to be a decent career choice.
Even more encouraging for aspiring risk managers is that the range of salaries between the highest and lowest levels indicates room for growth throughout their careers. Those with the highest-level positions—chief risk officers and vice presidents of risk management (or strategic and enterprise risk)—commanded an average base salary of $184,152, with a total compensation after bonuses of $227,573. While the base salary was only slightly better than in 2011 (a 0.2% increase), it did represent a more than 7% increase from 2008. In Canada, however, while the average base salary of $173,611 was lower than that of their American counterparts, this number represented a 19% increase over 2011 and a 24% increase from 2008.
This data clearly demonstrates that perhaps the pay ceiling in some areas has yet to be reached.