In-Depth

IT Skills Poised To Pay

Advances in mobility, cloud, Big Data, DevOps and digital delivery, plus the shift to more rapid release cycles of software and services, are enabling businesses to become more agile. IT workforce research and analyst firm Foote Partners assesses the IT skills gap these trends are creating, their impact on salaries and where the demand for expertise is headed.

• By David Foote
• 12/05/2016

It's difficult to find an employer not struggling to come up with a unique tech staffing model that balances three things: the urgencies of new digital innovation strategies, combating ever deepening security threats, and keeping integrated systems and networks running smoothly and efficiently. The staffing challenge has moved well beyond simply having to choose between contingent workers, full-time tech professionals, and a variety of cloud computing and managed services options (Infrastructure as a Service [IaaS], Platform as a Service [PaaS], Software as a Server [SaaS]). Over the next few years, managers will continue to be tasked with leading a massive transformation of the technology and tech-business hybrid workforce to focus on quickly and predictably delivering a wide variety of operational and revenue-generating infrastructure solutions involving Internet of Things (IoT) products and services, Big Data advanced analytics, cybersecurity, and new mobile and cloud computing capabilities. Consequently, tech professionals and developers must align their skills and interests accordingly to help their employers meet existing and forthcoming digital transformation imperatives that are forcing deep, accelerated changes in technology organizations.

As cloud infrastructure becomes more capable of economically delivering performance and data at capacities and speeds once never imagined, organizations of all sizes are seeking tech professionals and developers with the proper skills, knowledge, and competencies to create more agile and responsive environments.

At the same time, they're grappling to ensure reliability of existing infrastructure where any amount of downtime is less acceptable than ever. Along with that is an onslaught of cybersecurity attacks occurring more frequently that have many IT managers saying they can't find adequate labor to help them protect their existing networks and endpoints. The latest reminder was in the spotlight following the most powerful denial of service (DoS) attack to date in late October resulting from unprotected endpoints on surveillance cameras. IoT, machine-to-machine communications and telematics have introduced new complexities ranging from the need to better secure the devices and the delivery points to which they connect. Meanwhile, the growing IoT landscape is unleashing an exponential flood of new data from hundreds of millions of devices, and organizations need to blend their IT and operational systems and find people with Big Data analytics skills to handle the cloud-based machine learning infrastructure that's now emerging. This generational shift in IT will put a premium on, or create a baseline requirement for, IT professionals willing to follow the money and see where their skills will be most applicable. Whether you're a manager looking to ensure your staff can deliver on these changes or an IT professional deciding on a career direction, workforce requirements and customer expectations are changing.

If you're in the latter camp, it's important to understand that the supply-and-demand aspect that drives compensation is also a moving target. IT pay has a long history of volatility and in 2016 we have seen even sharper swings in those premiums. Based on hiring patterns, the following overriding trends will drive market demand for IT professionals who have the experience, drive and skills to deliver solutions:

• Cybersecurity: The need to protect traditional infrastructure from pervasive and ongoing attacks from a growing number of vectors and sophistication. Evidence suggests pay premiums for cybersecurity will continue to be strong for the coming years as the threat landscape continues to become more complex and confounding. The elimination of traditional boundaries brought about by cloud computing and mobility and a massive new influx of data generated by IoT devices will only exacerbate this need. More than 25 percent of identified attacks will involve IoT, according to Gartner Inc.
• Cloud: IT infrastructure over time is transitioning to an all-cloud model, whether provided by a services provider, in the datacenter or a hybrid mix of the two. The move to these elastic infrastructures and op-ex approach to IT is also enabling high-performance computing and storage capacity that's ushering in the ability to perform workloads and software-defined automation not possible with traditional client server or Web application tier infra­structures. Likewise, the move to cloud service-based apps such as Salesforce, Office 365 and Workday, to name just a few, is shifting the need for those with skills in building and managing traditional packaged software to those proficient in these new SaaS-based solutions. The amount spent on cloud this year was forecast at $111 billion, according to Gartner. By 2020, that spending is expected to climb to $216 billion.
• Big Data Analytics/Machine Learning: The move toward digital transformation is all about empowering users to make quick decisions based on an overwhelmingly massive groundswell of data to be curated from new sources such as IoT endpoints using the cloud infrastructure and enabling predictive analytics utilizing the machine learning conversational computing frameworks that Amazon Web Services Inc. (AWS), Google Inc., IBM Corp. and Microsoft are developing.
• DevOps: The drive to bring together IT operations and development is taking hold as the move to digital transformation, or at least the plan to do so, means organizations must be more agile. A more rapid release cadence in software delivery -- from Windows and Office to open source environments and vertical applications -- requires that IT shops can build, deliver and manage systems with these dynamics. Likewise, new programming environments and frameworks such as containers and micro-services are enabling new classes of cloud-native applications designed for new classes of devices and intelligent and modern infrastructure.
• Digital Business Transformation: This is the end goal of many organizations that fear, rightfully so, their business models are at risk unless they can become digital businesses. This is the culmination of the four areas just noted but also includes the ability to leverage advances in UX and UI design and the ability to lever­age IT to help companies build new products, services and support that's tuned to the digital era.

The rate at which these shifts will accelerate will depend on solving the puzzle of getting the mix of critical technology and business skills and experience just right when shortages of skills and talent have never been more profound or more constraining in affecting business transformation. These changes don't happen overnight. Practically speaking, it takes a few fiscal cycles to get budgets in line and recruiting and training efforts in place to build a new foundation for the optimally restructured workforce.

Impact on IT Salaries
"Clean sheeting" organizational systems and practices isn't real­istic: Businesses must build a new human resource foundation under what they're already doing, incrementally strengthening that foundation over time. This takes a well-thought-out job role archi­tecture plus carefully crafted agile compensation models to get people paid to true competitive market levels and incented to perform at high levels.

Many employers have already defined their strategic workforce plans to meet present and future skills requirements and they're somewhere in the middle of their multi-year business cycle transition. 2016 and 2017 are the years when they'll find out if their labor strategies are shrewd, practical and properly executed.

Perhaps the largest stumbling block technology and business leaders will face is patience and resolve -- to not fold amidst waves of fear and resistance to changes that tend to sweep like changing tides through their enterprises. Developers and IT professionals must also understand how organizations are shifting their hiring practices and placing values on the various new skills where volatility is becoming more pronounced. While organizational transformation on this scale takes leadership and backbone, it also requires good data and market intelligence. The Foote Partners skills and certifications pay premium benchmark research and data-driven tech workforce market analyses give a measured indication of the shifting values placed on those with a wide variety of IT skills.

Security Skills Gap
It should come as little surprise that the most robust demand for IT professionals is for those with strong cybersecurity skills. Market values for 80 infosec/cybersecurity certifications have been on a slow and steady upward path for four years, up 10.7 percent in average cash value as a group in just the past 12 months and 15 percent during the past two years. The Foote Partners findings indicate that infosec professionals are maturing in skills and capabilities just as the increasing sophistication of cyber-attack capabilities are demanding more experienced infosec professionals. Strong-performing security certifications so far in 2016 cut a wide swath: cybersecurity, forensics, penetration testing, perimeter protection, enterprise defense, security analysis, risk and security software programming.

That's the good news. The bad news is that while cybercriminals and hacktivists are increasing in numbers and deepening their skill sets, the "good guys" are still struggling to keep pace in 2016 as hyperconnectivity increases. Chief information security officers (CISOs) are on notice that they must become more effective acquiring or internally developing the skill sets their organizations need and building sustainable practices to retain existing talent and solidify their organizations' cyber resilience.

Without a doubt, a cybersecurity skills gap has developed on a global basis. Evidence of this in the Foote Partners latest IT Skills and Certifications Pay Index data: The Certified Cyber Forensics Professional is earning the highest certification premium among all 412 reported in the Pay Index -- averaging the equivalent of 18 percent of base salary. The CyberSecurity Forensic Analyst certification follows closely behind in premium pay and has gained 7 percent in market value so far in 2016. Moreover, the pay premium for noncertified cybersecurity skills has risen 6.3 percent in market value this year. In the Foote Partners IT Professional Salary Survey October update, Cybersecurity Specialists with three years of experience are averaging $100,000 in base salary in 67 U.S. cities. Senior-level specialists with five years of experience are averaging $118,500 with a top average salary of $125,636 and $148,950, respectively, in the most predatory U.S. labor markets.

But with a lack of consistency nationally in cybersecurity career definitions, employers can expect to experience diffi­culties in attracting and retaining cybersecurity talent for months or even years to come. Cybersecurity has been around for many years in government and industries targeted by cyber terrorists but in most companies, it's a nascent profession, still evolving in skill sets and training protocols. Hands-on experience in a cybersecurity environment is more critical to cybersecurity jobs than just academic learning. Still, colleges and universities need to expand their cybersecurity curriculum and aggressively pursue internship opportunities for their students to expose them to real-world conditions. There's got to be clear channels for attracting people into a profession that doesn't have the cache of software development.

With the demand for cybersecurity talent expected to rise to 6 million professionals globally by 2019 with an expected shortfall of 1.5 million professionals, we're going to need as many people as possible to "hit the ground running" to meet the demand. That's going to be a tall order, not to mention a bit unrealistic in the short term. The fact is it's going to take another three to five years to narrow this particular skills gap. We'll get there if the money and incentives are sufficient to get vendors, employers and training organizations focused on the solution. Employers are becoming more aware that they don't have the right people in their security departments in general, not just in cybersecurity. They may have very good technical people who can fix firewalls and implement basic perimeter solutions, but what's missing are enough security professionals who can make the case for security being linked to business challenges and business development. The size and scope of the problem has grown dramatically as the threats have increased. Executive management and boards of directors are recognizing that security is not just a tech problem, it's a business-risk issue. The linkage between the business and the info and cybersecurity organizations is still too weak from a labor perspective despite a lot of interest in the subject. More resources allocated to the security challenges are critical.

In some cases, it's going to become apparent that organizations simply don't have the right security leadership in place. Management must determine if security itself is sitting in the right place within the organization, who is accountable for security, and how to hold them accountable. While many businesses are good at incident management, too few have an established, organized approach for evaluating what went wrong and how to fix it. Thus, they're incurring unnecessary costs and accepting inappropriate risks.

Organizations of all sizes need to take stock now to ensure they're fully prepared and engaged to deal with these emerging security challenges and cybersecurity strategy. By adopting a realistic, broad-based, collaborative approach to cybersecurity and resilience, government departments, regulators, senior business managers and infosec professionals will better understand the true nature of cyber threats and how to respond quickly and appropriately.

Overall, the increase in high-profile breaches will push corporate boards and senior business executives even further to face the fact that for decades, they haven't been adequately staffing their corporate security operations. They're taking data threats more seriously because these threats have broadened from just a few industries to several and cyber hackers seem to be focusing not just on highly monetized breaches, but those that can intentionally inflict damage to brands and entire companies.

Analytics, IoT and AI to Propel Big Data
For all the interest in the use of advanced analytics to enable companies to understand, package and visualize data for enhanced decision making, the truth is that the marketplace for Big Data skills has been surprisingly volatile.

In early 2014, Foote Partners benchmark research revealed a decline in average pay premiums for 58 Big Data-related skills and certifications. By year end the Foote Partners IT Skills and Certifications Pay Index recorded a drop of nearly 5 percent in average value for these skills during 2014. In 2015 this trend reversed with 74 Big Data-related skills and certifications increasing in average value by 6 percent for the year.

Cash pay premiums for 99 Big Data-related skills and certifications have had mixed results: This year they were up 2.2 percent on average in the first three months; they were flat in the second quarter; and then saw a 2.1 percent average gain from July 1 to Oct. 1.

Among the biggest market value gainers were these Big Data-­related noncertified skills in the first nine months of 2016:

• Amazon DynamoDB
• Amazon RedShift
• Apache Cordova
• Apache CouchDB
• Apache Maven
• Apache Struts/Struts2
• Base SAS
• C++ /CLI
• Complex Event Processing/ Event Correlation
• Couchbase Server
• Data Architecture
• Data Governance
• Data Management
• Data Security
• ETL (Extract, transform, load)
• Hbase
• QlikView
• Redis
• Riak
• SPSS
• Tableau

The biggest market value gainers in Big Data-related certifications in the same period were:

• Cloudera Certified Specialist in Apache HBase
• HP Vertica Big Data Solutions Administrator
• IBM Certified Database Administrator - DB2
• IBM Certified Solution Developer - DB2 SQL
• Microsoft Certified Technology Specialist - SQL Server
• Oracle Certified Associate - DBA (OCA)
• Oracle Certified Associate - MySQL 5

What's been responsible for these ups and downs over the past few years? In-depth interviews by Foote Partners analysts conducted with executives and decision makers at more than 300 employers reveal a range of opinions. For some employers, there has been dissatisfaction with the return on their sizable advanced analytics investments. They cite organizational and cultural barriers related to transparency, data governance and sharing of data enterprisewide in siloed enterprises. For others, there are concerns that they're understaffed in the kind of sophisticated Big Data skills and experience necessary to analyze their structured, semi-structured and unstructured data. The bottom line is that companies must find their own Big Data "sweet spot." That means being realistic about what they can change and what they can't as far as institutional barriers.

Companies have had some success working past these early barriers of resistance. Foote Partners is forecasting that pay premiums for Big Data-related skills and certifications will steadily rise over the next 12 to 24 months, building on the positive momentum shown in the benchmark survey data this year and the second half of last year. It appears that noncertified Big Data skills are the real winners here: Not only are they averaging the equivalent of 12 percent of base salary cash premium for a single skill compared to only 7.5 percent for a certification, they're also showing strong quarter-to-quarter market value growth.

There are two explanations for this. First, the marketplace may be starting to get saturated with vendor Big Data solutions and as more certifications are earned, supply catches up to the demand for those certifications, driving values down. Another possibility is that as with hot skills in general, employ­ers may have their own internal accreditation mechanisms in place when hiring and deploying talent. Instead of relying on vendor certifications to define skill levels in Big Data solutions, they have their own ways of determining the competency of individuals who are working in Big Data initiatives.

Advanced analytics capabilities are just too critical for staying competitive. They've expanded in popularity from a few industries to nearly every industry and market. And there's the IoT, the next critical focus for data and analytics services. IDC is predicting a 30 percent compound annual growth rate (CAGR) over the next five years while McKinsey is expecting IoT to have a $4 trillion to $11 trillion global economic impact by 2025 as businesses look to IoT technologies to provide more insight. By some estimates there will be 25 billion connected things by 2020 and as many as 1 trillion by 2025.

The increasing influx of data available to organizations requires the expansion of infrastructure used to house, process, analyze and visualize intelligence. Rich media analytics will be the driver behind many Big Data projects. The increased demand for greater sophistication in analysis and data consumption requires that organizations refine talent acquisition strategies to compete in the skills gap. For example, there will be an ever-increasing demand for analysts capable of transforming IoT data into actionable business intelligence.

DevOps Goes Mainstream
Bridging the gap between developers and operations has always been a problem due to conflicting interests around project budgets and performance. Straddling the line between the two is what DevOps is all about. However, acceptance of DevOps methodologies and practices has been slow for years. The cultural barriers and natural resistance to changing longstanding practices for building, testing and releasing software solutions seem to have finally been neutralized as speed and agility have become mainstays to competitiveness in the marketplace. Improved collaboration and communications at all stages from conception to delivery are now more mainstream than ever.

The Foote Partners latest pay premium data for 2,985 employers shows a gain of 12.6 percent in average pay premiums for DevOps skills in the past 12 months. Going deeper into the latest skills pay premium benchmark data shown from the myriad skills and technologies comprising a typical DevOps environment are currently contributing to this growth spurt.

DevOps engineers have been in big demand as more employ­ers look to deploy a formal strategy. That this is such a new field means there are still relatively few available experts, which means specialists can choose between available roles and can secure pay rates significantly above the market average in more generic engineer roles. In the 3rd Quarter data edition of the Foote Partners 2016 IT Professional Salary Survey, DevOps Engineers are earning an average base salary of $102,672 across 67 U.S. cities surveyed; Senior DevOps Engineer salaries are averaging $120,000 and Lead DevOps Engineers are averaging $133,474.

Pay for Cloud Skills Flatten
In the last six months, cloud services investments have continued but with a 1.3 percent decline in average market value for 77 cloud-related skills and certifications from July 1 to Oct. 1. While 43 cloud certifications are down 3.1 percent in value as a group for this period, 34 noncertified cloud skills gained 1 percent. Only two cloud-related certifications rose in value in the last six months: AWS Certified Developer - Associate and Oracle Certified Associate - MySQL 5.

Foote Partners sees investments in cloud certifications continuing in 2017 and expects to see a continued decline in pay for cloud certifications as the number of these certifications proliferates beyond the 86 that are now being offered by 19 vendors. More than half of large enterprises will have hybrid cloud deployments by the end of 2017. There will be greater adoption of cloud and in-house/cloud hybrid hosted operations among businesses. Technologies such as software-defined networking (SDN) and network functions virtualization (NFV) are providing greater agility in cloud investments.

Expansion and support of cloud data means demand for IT individuals with cloud skills or admin architecture. But as the talent supply catches up with demand, pay starts to flatten as the gap between the supply and demand for skills continues narrowing. That's what's happening right now in the certifications space.

A number of factors can explain this year's pause in cloud computing premiums. In addition to the increased supply, the next wave of cloud computing is poised to begin later next year as new architectures in hybrid cloud come to market. Growing demand for hyper-converged infrastructure designed to extend existing VMware and Windows Server/Hyper-V environments into true native cloud environments and new management tools to support them are just emerging. Next summer's planned release of Azure Stack will bring the Microsoft cloud to the datacenter and many organizations are evaluating -- and in many cases deploying – OpenStack solutions.

The Rocky Path to Digital Transformation
One of the most disruptive trends reshaping the technology workforce right now is being driven by companies responding to a single question: How do we use digital innovation to create new products, processes and experiences that will create and drive important new streams of revenue? Rising demand for digital experiences has forced companies to accelerate the pace of initiatives intended to capture new customers.

Digital transformation has become a competitive necessity and not just a growth enabler. The problem is that recent surveys reveal that while a very high percentage of executives cite digital transformation as a priority, only a very small percentage believe their business has a clearly defined digital transformation strategy.

The core issue contributing to this inconsistency in vision and reality is that companies don't have enough of the necessary skills and talent available to both imagine the possibilities of a digital world, create a strategy and then execute on that strategy to bring the ideas to life. This is reminiscent of the early days of the Internet when employers were actively searching for the foundation talent to transition their products and services into online delivery and support models. The disruption is that there simply isn't enough talent at the right level of experience in the marketplace right now to satisfy the demand. And it will get worse before it gets better.

A recent study by the Initiative for Data Transformation (IDT) and SAP revealed that only 17 percent of respondents had enough employees with the right skills to embark on a smooth digital transfo mation. Across all skill domains, respondents noted substantial gaps in digital skills. For example, nearly 73 percent of respondents claimed that extensive Big Data analytics skills are important for the digital transformation of the company. But, only 39 percent claim to possess the skills necessary in this domain. And only 10 percent of the respondents claimed that their HR departments have implemented a recruitment/training program to close the skills gap. Skills identified as important for digital transformation include (ranked by importance):

1. Digital Security
2. Business Change Management
3. Business Networks
4. Big Data Analytics
5. Internet of Things
6. Product Service Offerings
7. Mobile Technologies
8. In-Memory Databases
9. Cloud Computing
10. Social Media
11. Entrepreneurship
12. Novel Interfaces

UX and Design for Digital Delivery
UX design is a relatively new tech field and its impact has been undeniable as companies learn that the aesthetics and usability of Web sites and applications can have a major impact on their bottom lines. This is especially true as mobile technology becomes more and more ubiquitous in our business and personal lives. The best UXes are a marriage of multiple skills, including marketing and graphical design.

UX design focuses on the interaction between the user and the system, and whether this interaction is visually and mentally satisfying. A UX designer is aware of the contextual information and how content will fit into it. UI design is a sub-discipline of UX, where the designer focuses on the inter­action between the user and the product they're building. UI designers also tend to have a hand in the visual design of elements on the page within a product.

Noncertified UX/UI skills in the latest Foote Partners IT Skills and Certifications Pay Index have shown solid growth in pay premiums, up nearly 17 percent in value in the past 12 months. Mid-level UX/UI Designer base salaries in the Foote Partners 2016 IT Professional Salary Survey are aver­aging $90,500 nationally (67 U.S. cities), $102,300 at the senior level. Among the 20 largest U.S. labor markets those average salaries rise to $96,300 and $106,700, respectively.

Jobs and Skills Markets Are Volatile
How did we fare in 2016? In aggregate, cash premiums paid to 69,900 IT professionals for 880 certified and noncertified tech skills rose in 2016, but not for everyone. While security certifications showed the highest gains among all categories with certifications -- up the equivalent of 7.5 percent of base salary in the past six months -- noncertified tech skills have posted modest gains, led by database, application development, OSes, and skills related to messaging and communications.

Extra pay awarded by employers to talented IT professionals for 880 certified and noncertified IT and business skills -- also known as skills pay premiums -- has risen 1.7 percent overall in the first nine months of 2016. In just the third quarter of the year 133 certified and noncertified tech-related skills made gains in cash market value while 132 lost value, for an extremely high-volatility index mark of nearly 31 percent. That's the highest quarterly volatility since 2012, signaling an unusually active supply-and-demand marketplace for skills and certifications.

Business leaders know that it's not technology, per se, but the ability to use it wisely that counts. They desperately need to develop and cultivate more of these new-breed hybrid business technology workers with myriad skill combinations. Judging by both the Foote Partners skills demand survey data and the last several months of government jobs numbers, they're going to have to be patient. Speed of execution is one of the IT leadership's key directives. Hiring full-time employees is a tougher sell to senior management in a rapidly changing business landscape unless in addition to their immediate responsibilities, they're also viewed as highly adaptable, multitalented individuals who can offer value in other as-yet defined ways as the business transforms.

Beyond the fact that it's usually more expensive to hire full-timers (due to additional overhead of benefits, incentive plans and so on), it can take months to find the right person with the necessary combination of skills and experience. And that works against the pressure on IT leaders right now to be more agile, react faster, and execute more quickly and predictably. This same pressure is also stimulating demand for cloud computing, analytics and a host of software, platform and infrastructure services. And that will continue to fuel the volatility in IT skills pay for the foreseeable future.