Friday, May 31, 2013


DIY Risk Management

I recently saw a report on consultant compensation for business continuity practitioners.

According to a post on LinkedIn’s BC-COOP group, Cheyene Marling, founder of BC Management, reports that

    BC Management’s 11th Annual BCM Study assesses not only compensations for those who are permanently employed, but also for those who work as independent contractors.

    The attached data graph highlights the average low and high billing rates for independent contractors. The data was collected in BC Management's 11th Annual BCM Study between July - December 2012. All currencies were converted to United States Dollar (USD) for comparison purposes. The study received over 2,200 participants with 100 noting “independent contractor”.

  • The lowest low hourly rate was $10.80 USD from Israel, but then based on personal experience, I know most Israelis can’t comprehend “risk management”.
  • The average low hourly rate for all respondents was $83.03 USD.
  • The highest low hourly rate was $217.75 USD from Australia..
  • The lowest high hourly rate was $24.91 USD from Ghana.
  • The average high hourly rate for all respondents was $128.40 USD..
  • The highest high hourly rate was $362.50 USD from Switzerland.

Ms. Marling even attached a graph ( that generalizes compensation in different parts of the world.

I shared the information with some other practitioners and then I started wondering why practitioner compensation – at least in the U.S. – is relatively low: from $78 as the average low to $123 as the average high. Every other Low/High on the Weebly chart surpassed the U.S. at both ends.

Many practitioners I know who work in the U.S. are paid on an hourly basis. Most, I suspect are “W-2” meaning that the employer – typically a consulting firm or staffing agency, pays a portion of the consultant’s tax obligations. The consulting house or staffing agency usually gets twice – or more – of what they pay the consultant. If the consultant is paid $55/hour, the consulting house/agency probably is charging the client – for whom the consultant is creating a plan – between $125 to $200/hour. The bigger the provider’s “name,” the greater the mark-up for the consultant’s time and expertise.

So maybe the figures for the U.S. are a little skewed. Maybe not. They are if the question was: How much is a consultant worth, then I hope the figures are skewed, but (bearing in mind W-2 salaries vs. 1099) if the question was How much are you paid by the hour then it may be accurate.

Supply and Demand

I just looked at and for “business continuity” opportunities. Strangely, there were more staff jobs than contract jobs. Most of the jobs carefully avoided mentioning compensation, although I did see a job in Ohio offering between $95k and $120k/year, with another in “upstate New York” hoping to snag a risk analyst for $65k/year. On the low end, one consulting gig in Alabama listed by a staffing agency offering compensation of $35 to $45/hour. Another supplemental staffing agency omits any compensation information, but you can rest assured that whatever the consultant expects, the agency will tell the applicant that it can’t manage that – will the consultant take less?

I know a number of practitioners looking for work. Many of them are highly experienced, but the jobs simply are not available.

It occurred to me that one of the reasons so few “less than Fortune 500” organizations fail to engage a practitioner – either as staff or on a project basis – is because risk management is considered, like writing and photography, a Do It Yourself field. Anyone can “do” risk management.” It’s a no brainer.

Writing a decent news story or PR piece; maybe slapping together a technical or even user manual. Grammar? Spelling? Concern for audience comprehension? Who needs them?

Likewise photography. Point and shoot. Never mind that a pipe is growing out of a person’s head or that the tall building falls inward ( / \ ). Shooting an ad for an expensive wine? Show a half-full wine glass and a bottle of the vino. Maybe no one will notice that the bottle has yet to be opened. (That, by the way, is a true story. Resume on request.

For what it’s worth, I was a writer and photographer before moving into risk management. It provided a good background.)

The problem is, risk management is NOT a “DIY” function. Given the advantages a good enterprise risk management program beings to an organization, it seems logical that smart management would rush to engage an experienced practitioner and pay that person a professional wage.

While I’m surprised, and glad, to see so many staff opportunities on Monster and Careerbuilder, I know there are far more practitioners, some highly qualified, than there are jobs, staff or contract.

Our profession is still in a Jacob Cohen profession – it lacks respect. (Who is Jacob Cohen? You know him better as Rodney Dangerfield.)

As long as management considers risk management to be a DIY no brainer, we’ll either be on the market or “transitioning” to a new profession. Maybe senior practitioners should offer their services as Trainers or Mentors for the DIYers.

Meanwhile, practitioners might consider promoting (read generating future business) by presenting risk management or even business continuity to chambers of commerce and BBA/MBA classes at the local U.

As for me, I am not a DIYer. I don’t even like the self-check out machines at the supermarkets. When I need a professional job done, I go to a professional.

No comments: