Surprise! Certified IT jobs are paying less

The market for IT jobs has not just bottomed out, it’s stronger than it has been in several years. There is, however, a catch: The premium pay for jobs requiring the typical certifications that many IT hands labor for has continued its plunge and now is at the lowest point in 12 years.

That news comes from a quarterly survey by Foote Partners, a consultancy that issues detailed reports on the IT labor market, monitoring some 2,200 employers and more than 120,000 jobs.

Why the disconnect between a stronger overall job market and shrinking paychecks for certified techies? “Pure-play [tech] jobs are on the decline,” says Bill Reynolds, a partner in the firm. Where once the majority of tech jobs were in technology companies, now many organizations whose business is not directly related to tech have many openings that require different skills, he tells me.

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Business skills are more and more in demand, but they don’t show up on a certification test, Reynolds says. “In fact, less than 20 percent of all IT professionals employed today — or approximately 4 million of a total technical workforce estimated at between 20 to 24 million [pure technology and hybrid workers] in the U.S. — now work within the walls of what could be consider the traditional IT department,” his company reports.

I’ve been looking hard at the market for tech jobs lately, and what Reynolds and his company are telling me tracks very closely with what I’m hearing from many employers and seeing on the major tech employment boards. However, I believe Foote overstates the number of tech jobs in the country.

Still, it’s no accident that there are more tech job opening in New York and Washington, D.C., where financial services and the federal government are huge employers, than in Silicon Valley, according to Dice, the largest of those job boards.

A long-term decline in certified jobs’ pay “The average market value for 274 noncertified skills dipped slightly from July to October [2011] for the second consecutive quarter, following gains in the previous five calendar quarters and in 21 of 28 quarters going back to 2004. But pay premiums for 240 IT certifications continued their downward trend for a fifth straight quarter — and for 19 of the last 20 quarters,” the Foote report states. (Foote tracks actual salaries, but it doesn’t release that data to the media.)

There were some exceptions to the decline in premium pay for certified jobs: The applications development/programming category and the systems administration and engineering category both grew in overall market value, bolstered by gains in specialist certifications from Oracle, Hewlett-Packard, IBM, Red Hat, and Microsoft.

But declines were much more common, with the worst hit being jobs with entry-level and training certs. For these, premium pay (a bonus or extra money for skills that may be embedded in salary) was down 6.4 percent since the previous quarter. Pay for those with Web development certs was off 5.3 percent in the same period. By contrast, pay for operating systems skills, a noncertified category, increased by 9.4 percent in the quarter.

Longer term (as of May 2011), the average premium pay for IT certifications has dropped 4.6 percent over the past two years. Certifications that fall under the category of “beginner and training” have seen the biggest drop in that period: 32 percent. IT pros with certifications in networking and communication have seen the second-most significant decrease, at 10.4 percent. Pay premiums for database certifications have dropped 6.4 percent over the past two years. Furthermore, certifications in skills pertaining to architecture, project management, and process saw a 6.1 percent drop in premium pay.

Experience and business savvy are what count now Although we all know that age discrimination is an issue in the IT world, David Foote, the firm’s CEO, says experience really counts these days: “They have not been highly valuing certified skills as much as they have those that are without certification, where the experience and on-the-job performance of a person account for more ‘juice’ in hiring and skills acquisition decisions than having an acronym after a name on one’s business card. “

Consider Salesforce.com. Although the company is looking for “skills across the board,” Woodson Martin, who oversees hiring, raises a point voiced by many technology executives: A grasp of business needs, both the customer’s and the employer’s, is key to landing and keeping a good job. “People need to be attuned to the use of technology. We’re trying to help businesses evolve to a new model where it operates as a social enterprise,” he says.

I’ve heard that refrain over and over again in the last few years. Intuit, for example, values business skills in the IT department so much that its former CIO Ginny Lee (now a senior vice president) did not have a strong tech background — she holds degrees in economics and business administration — when she was hired. What’s more, IT in that company is responsible for developing new businesses and new revenue streams.

Neither Foote Partners nor anyone else I’ve interviewed maintain that certifications are dead. Obviously, they are not. But the IT jobs market is changing, and if it’s where you make your living, being on top of employment is critical to your success. That means you can’t rest on certifications to keep your pay high.

I welcome your comments, tips, and suggestions. Post them here (Add a comment) so that all our readers can share them, or reach me at bill.snyder@sbcglobal.net. Follow me on Twitter at BSnyderSF.

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