While the role of IT continues to evolve as more integral to business, compensation for skills is reflecting that change.
According to the latest quarterly edition of the Hot Technical Skills and Certifications Pay Index by IT workforce research firm Foote Partners LLC, growth in compensation for noncertified IT skills as a percent of base pay has outpaced certified IT skills for the past two years. That's particularly so for workers skilled in enterprise business applications, development tools, Web and ecommerce development and project management.
According to the report, average certification pay grew only 3.2% over the past two years, significantly lower than the 13.3% gain in noncertified IT skills in the same period. And while every category of noncertified IT skills gained value in the past two years, only Web development-related certifications showed growth. According to the report, 52% of 60,000 IT professionals surveyed received some form of technical skills pay as part of their overall compensation, the highest in the seven-year history of the index.
"Technical skills used to be the dominant thing for IT workers, but you're now looking at a much different package," said David Foote, CEO and chief research officer for Foote Partners in New Canaan, Conn. "More companies are saying technical skills are part of it, but they're really looking for people who have worked in their industry for a while, know their customers, have an aptitude for business, and [are] well-rounded."
Driving that trend, Foote said, is that many more IT jobs are customer-facing and more business-oriented.
That said, compensation for certified skills is still above the compensation for noncertified skills, but the gap is narrowing, Foote said. At the end of 2006, average premium pay (as a percent of base salary) for certified skills was 8.17% compared with 7.55% for noncertified skills.
Among the certified skills, average premium pay for Web development certifications grew 3.6% in 2006, the only certified category to increase. Although there aren't many certifications in this area, Foote said Microsoft, Novell and CompTIA offer some.
Premium pay remained flat for certified security professionals in 2006, but Foote said he does expect that to change, particularly for Web-related security.
"After 9/11 and the recession, and because of the Patriot Act and Sarbannes-Oxley, etc., so many [IT professionals] flooded into that category of employment, and supply began meeting demand," Foote said. "But we're projecting a change in this. Companies are dangerously underskilled in this area and paying just as much as they need to. But customers are starting to get nervous about their data. When customers start getting involved you will see CEOs pay attention, and maybe you'll see the numbers [compensation] in the security group going up."
Hot noncertified skills
In the area of noncertified skills as a percent of base salary, the hottest growth was in enterprise business applications, increasing 15.2% in 2006. In particular, process-specific jobs, such as knowledge of SAP modules like payroll, business warehouse, etc., as well as SAP Netweaver, was being compensated at 10% to 12% of base salary.
"The big story is what's been happening with SAP," Foote said. "People are having a hard time finding experienced SAP professionals, and even if they have the money to pay, they can't find them. They're having to pay 20% more for people less skilled [than their current employees]. It's all supply and demand."
Noncertified Web and ecommerce development skills also saw an increase in compensation, growing at 10.5% in 2006. In particular, Microsoft .NET skills pay grew 30%, Foote said. Also experiencing strong growth were WebSphere, WebLogic, Apache and JBoss, as well as Microsoft Commerce Server and Microsoft Indentity Integration Server 2003.
Growth in premium pay for noncertified application development tools and platform skills increased 7.3% in 2006, particularly in the areas of rapid application development (RAD), Extreme Programming and Oracle developer. Eclipse skills are also paying "well above average," Foote said.
Compensation for noncertified skills in messaging, email and groupware increased 7.3% for the year, while noncertified project management and process skills increased 6.3%.
Projected growth areas
Looking forward, Foote Partners expects hot IT skills in the next few years to include project/program management, business analysis and strategist/internal consultant on the business skills side, and business process management, application development, database management, security, and enterprise architect/SOA on the technical skills side. Skills expected to be less in demand include programming/routine coding, systems testing and application maintenance.
Overall, Foote said, "IT remains a great occupation." He added, "Look what's happening with certifications -- that's the real story. Companies are looking for different types of IT people, with hybrid skills."