Certs Pay Rises While Skills Bonuses Sag

The good news? Bonus premium pay tied specifically to 53 IT certifications has remained steady. The bad news? Pay for 84 stand-alone skills continues its two-year downward slide.

Note: Skills Moneyline is a new monthly column about technical skills and certifications compensation and related issues. Ill draw from Foote Partners rigorous research involving nearly 30,000 public and private sector IT professionals in North America and Europe, who are continuously surveyed and directly interviewed about their jobs and pay. Results are compiled and published quarterly, and will appear here in biweekly infographics accessible from the Cert Central site.

The good news for IT professionals: Even though the economy remains in the doldrums, bonus premium pay tied specifically to 53 information technology certifications has remained steady in the first half of 2002 as it has for more than a year. The bad news? Pay for 84 stand-alone skills continues its two-year downward slide in the current depressed economic climate.

Despite the sour economy, overall premium bonus pay for certifications surveyed in Foote Partners Quarterly Hot Technical Skills and Certifications Pay Index has risen 2.3 percent since the end of 2000, to an average 8.1 percent (of base salary) in median bonus paid. That, despite a small decline of 2.7 percent in the past 12 months, including 1.4 percent in the first half of 2002 as employers struggled with terrorism fears.

In contrast, premium pay for the 83 technical skills tracked in this research has plummeted more than 20 percent between the fourth quarter of 2000 and the second quarter of 2001. Premium pay for technical skills is down 8.1 percent in the first six months of 2002 alone, to a current median average of 7.4 percent of base pay.

Until late last year, the average median bonus for all certifications we survey had never exceeded the average median bonus for all stand-alone skills in the four years of this surveys existence. In fact, skills bonuses averaged nearly 3 percent of base pay more than certification premium pay just two years ago. So its a significant milestone that the gap has been erased and now reversed. Employers faced with deep budget cuts have become more suspicious of workers self-marketing of their skills acumen. Many report that they now regard certifications as more solid and meaningful normative measures for comparing IT workers; some managers in our survey are even convinced that certifications symbolize greater commitment to job and career. (Although not all employers see it that way. For a contrary view, see Brian Jaffes column.)

Moreover, with layoffs and hiring freezes altering the landscape, bonuses for technical certifications are increasingly used to single out and reward talented workers, entice internal transfers, and strengthen in-house technical capabilities when outside hiring is restricted. A new discovery in this years research is that managers are apt to use certifications as bargaining chips to secure and protect training allocations as they come under scrutiny, and as leverage in negotiating compensation packages for essential workers. Certifications arguably offer cost-conscious executives something more substantial and easier to valuate when validating investment in IT human capital.