Are Canada’s risk managers compensated for wearing many hats?

More than six in 10 (63% of) risk management professionals in the United States and Canada reported performing functions in addition to risk management in their organizations, according to RIMS’ 2017 Risk Management Compensation Survey.

One reason why is because of how much of a risk manager’s time is spent on insurance procurement, says Darius Delon, consultant and president of Risk Management 101 as well as the former chair of the RIMS Canada Council.

Delon defines ‘insurance procurement’ as going out into the marketplace and being able to finance all the risk that could be insured, including captives and reciprocals. He estimates this represents approximately 50% of the risk manager’s job – “give or take 20%.”

How does a risk manager take on all of these different responsibilities?

Delon uses the example of off-campus travel for universities. “It’s a very big deal,” he said of the travel issue. “Oftentimes, the best person to bring it forward in a risk register might be the risk manager. Then you struggle to find a place to put it: ‘You be our off-campus travel coordinator’ or you can say, ‘I think you’re only doing 50% of your time on insurance, how about you take on this role?’ So, you take on that role. You can also take on roles for emergency response planning, business continuity planning, whistleblower legislation, privacy and occupational health and safety.”

Some risk manager roles are even associated with internal audits or an audit function, Delon added.

The additional responsibilities, including leadership roles, may play a part in the compensation for risk practitioners.

Overall, Canadian practitioners experienced an average 2% increase in base salary this year compared to the results in the 2015 survey (the study is published every two years). The average base salary for director of enterprise risk management/strategic risk management in Canada saw the biggest increase for the country, up 8% to $130,000, according to the RIMS survey.

The RIMS benchmark survey, released Tuesday, is based on data from 950 completed surveys submitted by full-time risk professionals and offered findings for seven different risk management job titles. The survey incorporates data from 138 risk professionals in Canada, 781 in the United States and 31 outside the U.S. and Canada.

Delon told Canadian Underwriter that he is seeing a trend of titles being given to risk managers that are associated with leadership, but the role may not have any direct reports. “It seems that some organizations are using existing salary structures and titles to slot in the risk management roles,” he said. “It would be nice to see the compensation levels and titles adjusted in organizations to better compensate risk managers for the work they do without resorting to titles that don’t always represent the true work of the risk managers.

“So, I’m finding a kind of misalignment between salary and leadership,” he said.

Delon suggested that “risk managers probably should be paid the same level as directors of risk,” but, because of organizational styles that give more salary band to a director, some organizations put their risk managers into a director band. While he says he is not against this classification, “it does kind of confuse others when you see somebody who is a director of risk, but they are a one-person shop.”