[Author’s Note: This is the second in a series highlighting the highest paying and fastest growing certified and noncertified tech skills at 3,000 U.S. and Canadian employers.]
Why would an employer pay its tech workers extra cash for a skill or certification if they’re already getting a salary and annual bonus?
This is always the key question when it comes to understanding pay premiums for certified and noncertified tech skills. My last column suggested one of many reasons — salary compression — but observed that if employers had more agile compensation structures and flexible pay practices, they would be better prepared for navigating the highly volatile technology labor market.
In other words, the many work-around solutions (such as skills pay) they employ to prop up their aging and increasingly ineffective HR systems and practices would be unnecessary when it comes to their tech workers.
Why salary may not be enough
It’s nearly impossible to rely on salary alone to attract and retain talent nowadays. Proof of this is the popularity of the concept known as “total rewards,” which includes compensation, benefits, work-life balance, performance and recognition, and career development.
What most determines the mix of these elements from employer to employer? Company culture and values. For example, while one employer pays salaries well above market average, modest cash bonuses and attractive performance-based incentives, another chooses a strategy of below-average base pay but offers higher cash bonuses, better health and retirement options, more flexible workplace policies and better career development opportunities.
This is precisely why surviving in today’s labor marketplace requires HR agility. With so many different corporate cultures competing for the same talent, an employer must be able to create on a dime a different cocktail of total reward elements to suit any given situation for hiring or retaining critical tech talent. More often than not, this means situationally pushing the envelope of their traditional pay practices and then being able to manage these exceptions as part of an overall workforce strategy.
In the example above, the one thing these two fictional employers could have in common is the total cash they pay their workers annually. Sure, they have different ideas about salary and bonuses, but the actual amount of cash a worker earns for the same job in each company turns out to be similar. When it’s not, that’s when paying premiums for certifications could become an equalizer.
The point is that two employers don’t have to mimic each other’s pay philosophies to be able to compete for talent on the basis of cash alone.
What is the current cash market value of an IT certification?
Extra pay awarded to 69,900 U.S. and Canadian IT professionals for 880 certified and noncertified IT and business skills — also known as skills pay premiums — has been tracked and updated quarterly since 1999 in the IT Skills and Certifications Pay IndexTM (ITSCPI). Two thousand nine hundred and eight-five private and public sector employers currently provide this data to Foote Partners, covering a total of 255,600 IT professionals at these companies.
Market values for 412 tech certifications in the most recent ITSCPI data update are averaging the equivalent of 7.7% of base salary with a median range from 2% to 18%. The current quarter’s result (through Oct. 1) is the 14th consecutive quarterly rise in overall pay for certified skills — unprecedented in the 18 years Foote Partners has been tracking and reporting compensation for certifications. Figuring prominently in this growth has been info/cybersecurity, architecture and applications development certifications.
The following certifications are earning the highest pay premiums right now. They’re averaging cash premiums equivalent to 14% to 18% of base salary typically paid out each pay period as a cash bonus in addition to salary. (Shown in descending rank order of market value including ties, arranged alphabetically within each rank.)
- Certified Cyber Forensics Professional
- (Tie) Open Group Master Architect
Six Sigma Master Black Belt
- (Tie) Certified Forensic Computer Examiner
CyberSecurity Forensic Analyst
GIAC Reverse Engineering Malware
TOGAF 9 Certified
- (Tie) EC-Council Certified Incident Handler
EC-Council Computer Hacking Forensic Investigator
GIAC Certified Forensics Analyst
GIAC Certified Forensics Examiner
GIAC Exploit Researcher and Advanced Penetration Tester
GIAC Web Application Penetration Tester
Open Group Master Certified IT Specialist
PMI Professional in Business Analysis
PMI Program Management Professional
- (Tie) Cisco Certified Architect
EMC Cloud Architect Expert (IT-as-a-Service)
GIAC Enterprise Defender
GIAC Secure Software Programmer — Java
InfoSys Security Architecture Professional (ISSAP/CISSP)
PMI Agile Certified Practitioner
PMI Portfolio Management Professional
PMI Project Management Professional
Salesforce.com Certified Technical Architect
Pay for certified vs. noncertified skills: What’s the difference?
The driving force that created the certification industry was vendors — mainly in networking and communications, systems administration and engineering, database and applications developing — that needed to not only sell their products but support them by educating users in how to use them at beginner, intermediate and advanced levels.
That’s been both a strength and a weakness in certification adoption, as they tend to be forward-thinking at a vendor’s newest products, neglecting older version that are still in use. Also, certifications often focus on the vendor’s terms rather than industry-accepted terminology. But for someone tasked with implementing and supporting specific products, a vendor certification is an efficient way to get up to speed on the product.
Over time, many vendor-neutral certifications have been introduced to focus less on specific platforms and more on methodology, process, fundamental issues of a particular field — architecture, security, cloud computing, auditing — and developing a broader understanding of the environment in which products live.
But not all skills are rooted in technologies owned by vendors. For these noncertified skills, employers define their value in their own terms even if there happens to be certifications available for the same skills. You’ll find skills premiums being earned by workers across the entire landscape of technology, but also in areas of management, process, methodology, and the intersection of business and technology.
Perhaps the biggest differentiator with noncertified skills is the nearly unlimited ways they create value in an enterprise by intersecting and interacting with core functional areas of a business, often impacted by industry, enterprise size and where a business is in its evolution. As such, noncertified skills as a group have commanded higher cash premiums than certifications for the past 10 years as companies have struggled to add new capabilities in areas such as cloud and mobile platforms, digital transformation, DevOps, IoT, big data and collaborative technologies.
[Author’s Note: My next column will focus on skills and certifications that have grown the most in market value in 2016 according to the latest ITSCPI.]