COVID-19 and the Next Generation of Risk Management

This post first appeared on Risk Management Magazine. Read the original article.

The transition to remote work during the COVID-19 pandemic has been at the forefront for most businesses, and risk professionals have adapted well to this change. Remote server access, video conference calling, and other technological innovations have provided risk professionals and others within the risk management industry with the ability to stay in touch with clients, employers and their data while being able to survey their issues and needs from a distance. Improved data security measures have made this process safe and relatively seamless as well.

While there have been some stumbling blocks along the way, such as adjusting to remote risk assessments and reorganizing schedules to fit regular video calls, risk management professionals have largely benefitted from the remote work experience.

However, the looming issue for risk professionals in the last decade has been the long-discussed talent gap, as Baby Boomers—still a majority of the industry’s workforce—continue to retire in record numbers. In fact, only 16% of survey respondents to the RIMS Risk Management Talent 2025 Report, a study done before COVID-19, expressed confidence that enough risk management program students would graduate in 2025.

COVID-19 has highlighted the talent gap and recruiting issues for risk professionals in recent months. Risk management program heads at universities across the country have found the pandemic has caused definitive changes to the industry’s structure and its future, bringing about positive change through a greater focus on practical, real-life issues and the ability to make a difference.

Recruiting the Next Generation

One of the most pressing issues regarding the talent gap has been marketing to new students. Prior to COVID-19, risk professionals struggled to recruit millennials and members of Gen Z due to a technological gap as well as a lack of understanding regarding the importance of the field.

Millennials and Gen Z professionals are digital natives. While the industry has been making significant strides to address their needs and concerns, its quick pivot during COVID-19 to work-from-anywhere technology, together with a growing realization that talent need not be restricted to geography, is opening up new recruitment opportunities.

Additionally, millennials and Gen Z professionals want to do meaningful work. In fact, recent research found 63% of millennials believed businesses should be focused on improving society rather than generating profit. The abundance of risks present in 2020 is an opportunity to demonstrate the role of risk management in society.

Prospective risk professionals are being shaped through first-hand experiences that have demonstrated the importance of risk management. This year, we have experienced one of the most active hurricane seasons on record, incredibly dangerous wildfires in the western United States and rapidly fluctuating temperatures in the Midwest in addition to a pandemic. These issues, coupled with social and political unrest, have created a landscape filled with risks.

The number and scope of these significant risks have served as a strong learning opportunity for potential risk professionals, and they have had to manage their way through these challenges. Most importantly, they understand that plans are great, but being able to change and adapt these plans on the fly is essential as new challenges arise.

While these circumstances have been difficult, new risk professionals can now relate to the inherent need and value of effective risk management strategies and better understand the industry’s importance. They are more aware of their work’s positive impact, as they can see the direct impact proper risk management has on society.

David Sommer, professor of risk management at St. Mary’s University in Texas, explained this trend further, “Students are thinking about
risk like never before, and realizing the good that can be done by properly managing it. Bloomberg Businessweek had an article entitled, ‘Risk Manager is Suddenly a Hot Job.’  Risk management rarely gets press that good. In the battle for talent with investment banks and tech firms, risk management has upped its ‘cool’ factor.”

Risk management has also proved to be one of the more stable industries nationwide. Because of its broad economic reach underpinning so many other industries, risk management has historically avoided the bigger economic struggles of countless other businesses. COVID-19 has made this even clearer. In fact, Michael Angelina, executive director of the Maguire Academy of Insurance and Risk Management at St. Joseph’s University in Pennsylvania, stated, “I believe COVID-19 escalated some of the strong points of our career (stability, economic resiliency) and the dynamic business environment risk management occupies, such as coverage issues, pandemic insurance, loss control and mitigation.” The stability of the risk management field is an ideal message to a generation that came of age in the economic downturn of just a decade ago.

Efforts of talent recruiting networks like Gamma Iota Sigma (GIS) have also proven essential, as risk professionals and university program leaders have looked to increase their reach. As new opportunities to fill this talent gap have appeared, talent pipelines like GIS have helped increase the efficacy of outreach and have guided the industry towards a brighter, more diverse future.

With improved technological infrastructure, a heightened awareness regarding the industry’s ability to support others, and the overall stability of a career in risk management, recruitment efforts have improved in the wake of COVID-19. However, as the RIMS report highlighted, 92% of respondents agreed that universities need to significantly change their programs to meet risk management’s future challenges.

Risk Management Education

Risk management educators were confronted with the challenge of changing their strategy prior to COVID-19, and the pandemic only exacerbated this issue. Much like the industry’s overall response to the pandemic, they have excelled so far.

Cassandra Cole, department chair and director of the MS-RMI Program at Florida State University, said, “As educators, we have responded by incorporating content that provides some insight into the impact of COVID-19 on the industry. In some ways, I think it has helped students see the important role risk management and insurance plays in the daily lives of individuals and businesses by making classroom discussions and examples relevant.” Risk management education has been able to pivot towards more real-life, meaningful examples due to the widespread nature of COVID-19.

Actual risk mitigation practices, such as social distancing and wearing masks have also highlighted the need for constant risk management. This has illuminated a critical, practical lesson for both new students and early career professionals: the need to be prepared at any time. Because of COVID-19, young, aspiring risk management workers have been able to see the importance of practices such as business continuity plans and vigilant risk mitigation for a variety of businesses across industries.

Risk Management Beyond COVID-19

Once the challenges of COVID-19 are solved and relegated to the history books, where will the industry stands as it looks to the future? Remote work and an increased reliance on technology have made significant impacts on risk management, creating new opportunities for recruitment and a new set of risks.

Rob Hoyt, department head and Dudley L. Moore Jr. chair of insurance at the University of Georgia, summed up the pandemic’s long-term impact: “More employees working remotely has already created a number of new, or at least altered, risks associated with cyber exposures and off-site work. Also, the increased prevalence of remote work will enable risk management professionals to work for and with organizations without the perceived geographic limitations that have been common in the past. That should open even more opportunities in the future.”

COVID-19 created an unprecedented environment of risk for everyone. While many industries have struggled to recover, it presented risk management with an opportunity to better position itself to address several longstanding issues. The importance of risk management has never been as clear as during the pandemic, and the field has better marketed itself to the next generation while creating a more diverse future for risk management.

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