Wednesday, June 10, 2009

Can certification DECREASE salaries? (part two)


In a comment to a prior post on the ROI of certification for product managers, David Locke proceeded through a scenario regarding the ROI. After noting that certification can establish itself in an industry, become a minimum requirement to work in the industry, and prevent otherwise talented people from working in the industry, Locke continued to explore the ramifications of this.

Eventually, the PM job will move overseas.

Well, why not? If product management expertise is captured by a set of quantifiable certification requirements, and if someone in Beijing or Bangalore meets the same requirements as someone in Brea or Beverly Hills, wouldn't it make sense to hire the lower-cost worker who equally satisfies the requirements?

Locke continues:

So goes commoditization, which certification is a sure sign of. "Hey, I passed the test, so I'm a PM," NOT.

Locke then states:

Looking at the PMI cert, it certainly commoditized project managers.

A lot of this depends upon supply and demand, but this 2007 item from Monster indicates that project management certifications may be a commodity:

According to a survey by Foote Partners, a management consultancy and IT workforce research firm, pay for 143 IT certifications continued a downward slide, falling an average of 2 percent in the six months ending December 31, 2006. That was compared to pay for 127 noncertified IT skills, which increased 2.3 percent over the same period.

“Pay for certifications has been on the decline for some time,” says David Foote, CEO and chief research officer for Foote Partners. “It’s not that employers aren’t willing to pay a premium for them, but instead, the prices they are willing to pay versus noncertified skills is nowhere near the levels of one to two years ago, or even six months ago for that matter.”...

For 2006, the survey found pay premiums increasing for certifications in Web development (up 3.6 percent), but declining for certifications in databases (down 4.6 percent), project management (down 2.7 percent), system administration and engineering/network operating systems (down 1.9 percent), and applications and programming languages (down 3.6 percent)....

Supply and demand may also play a role in determining what a certification is worth on the job market. Jim Henderson, who writes a blog on certification and serves as the global manager of instructor programs at Novell, says that if too many people hold a certification, that certification may become a commodity and lose value. “Being one of a million is a way of getting your foot in the door,” he says. “Being one in a million is a way to actually get the job.” Noting that his views are his own and do not reflect Novell’s official position, he adds, “If a certification sets a high bar, then it helps you stand out from the pack.”

Dice records the results of a subsequent Foote survey:

On average, premium pay for more than160 types of IT certification skills declined for the seventh straight period in the first quarter of 2008, according to David Foote, chief research officer for Foote Partners LLC. The Vero Beach, Fla., research firm's quarterly IT Skills and Certifications Pay Index examines compensation for individual IT skills and certifications earned by about 22,000 professionals in the U.S. and Canada.

The company found the average premium for certifications showed an overall decline of 1.6 percent during the six months ending March 2008, and a 2.9 percent year-on-year decrease.

And Dice noted that one hiring manager was moving away from certifications, and toward the old minimum requirement - a college education:

Linda Carey Johnson, CIO for Sacramento's Municipal Utility District, says some workers entered the technology industry during the dot-com boom without college degrees, using certifications as a counterbalance. "I just had someone with a ton of certifications and we said, 'You have to earn a degree,'" she says. "We focus more on degrees than certifications."

So what does this mean?

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