Are Risk-averse People Better Employees than Risk Takers?

Historically, entrepreneurs have always been considered as having a high tolerance for risk, with conventional wisdom suggesting that they’re always willing to roll the dice and stake all in the pursuit of their goals.

The flipside to this is that individuals with an aversion to risk are unlikely to fare well as entrepreneurs, as while they may be able to establish a venture they’ll be limited in terms of how they move this forward and attain growth. With these points in mind, it may also be argued that risk-averse individuals would make better employees than those who inherently take risks. But is this really the case? Let’s take a look:

Are risk-averse individuals better employees?

 In truth, individuals with a risk-averse outlook may be considered as superior candidates for work. After all, they’re certainly more inclined to follow instruction and behave responsibly, while employees with a risk-averse outlook will usually make conservative decisions that safeguard a business and its model.

Here’s where things get complicated, however, as these attributes are only desirable in certain roles and job types [especially entry level positions]. When dealing with more expansive roles through which employees assume far greater responsibility, risk-aversion can hinder decision making processes and potentially limit the growth potential of a project or company.

It may also be argued that risk takers boast superior critical thinking skills, as they actively consider and appraise potential risks before making an informed and calculated decision. This enables firms to tread the fine line between risk and reward, in much the same way that financial market traders do when investing.

In fact, financial traders offers an excellent example in relation to this topic. More specifically, both risk averse and risk hungry investors can generate returns through trading, although both are better suited to different asset classes and investment vehicles. While risk-averse investors often make money through physically held assets like stocks and gold, for example, their counterparts are drawn to derivatives that deliver potentially higher, margin-based returns. They’ll also favour CFD trading techniques, which enables them to speculate on specific assets and profit even in a depreciating market.

The last word

Using this analogy, we can see that employees can add value to your company and achieve their own personal goals regardless of their risk outlook. There’s no doubt that these types of people bring very different skills, outlooks and advantages to companies, however, so as an employer you’ll need to make decisions based on the nature of your business, its standing and what is required in each unique position. This way, you can create a productive and diverse workforce that lends itself to long-term growth.