Data analytics can provide deeper insight into corporate data than conventional reporting-based business intelligence processes can. But analytics is a new frontier for many organizations. This four-part series of articles examines the issues involved in setting up and managing analytics programs and provides advice from experienced users and industry analysts; it starts with a look at the demand for workers with analytics skills and what it can cost to hire them.
Table of Contents
skills in demand – and analytics pros demanding top salaries
Getting ready for an advanced business analytics software project
Creating an advanced data analytics business culture: Tips and advice
Looking to hire top-notch data modelers, predictive analysts and other advanced data analytics professionals to beef up your organization’s analytics skills? Better get your checkbook ready.
As more and more companies deploy predictive analytics tools and other data analytics software and begin filling the ranks of their analytics team, the pool of available talent is shrinking and hiring costs are growing, according to industry analysts and executives at companies that are in the market for analytics skills.
More on analytics professionals
Learn why cross-functional talent is key for data science teams
Find out how big data needs data-driven decision-making skills
Read about the need for a greater focus on data scientist education
“Workers that have this kind of knowledge are in high demand,” said Leslie Ament, an analyst at Hypatia Research LLC, a Lexington, Mass.-based research and consulting firm that specializes in customer data analytics.
As head of strategic risk analysis at New York City-based insurance firm Chartis Inc., John Savage knows firsthand the cost of hiring – and keeping – first-class advanced analytics pros. Savage manages an analytics team of seven people and is looking to grow it – and he has no illusions about what it will take.
“We are currently looking for a pretty senior person, and we know that it’s going to cost us,” he said.
But paying top dollar is worthwhile, Savage said, noting that his group has had zero turnover since 2004. That has allowed his analytics staff to build a good working rapport and achieve better and better results. “I don’t want anyone on my team being undercompensated,” he said. “We try to pay for value.”
Forrester Research Inc. analyst James Kobielus said it’s understandable that advanced analytics pros are in high demand. He noted that with traditional business intelligence (BI) reporting and query tools achieving mainstream adoption, a growing number of companies are looking to predictive analytics, data mining, text analytics and other analytics techniques to gain the next competitive edge.
But analytics has been primarily the domain of statisticians, quantitative analysts and other highly skilled workers. And with demand from employers rising, those coveted few who possess advanced analytics skills are being amply rewarded.
North Carolina State University’s advanced analytics master’s degree program offers a glimpse into the competitive world of analytics staffing. According to Dr. Michael Rappa, director of the school’s Institute for Advanced Analytics, 37 of the 39 students who completed the program in May got at least one job offer within 90 days – and many had multiple offers in hand before they even graduated.
Overall, the average number of job offers per student was 2.3, with 30% receiving three or more offers, Rappa said. And the positions offered – ranging from business analyst to director of quantitative analytics – pay what graduates of MBA programs are used to getting. The average salary offered to this year’s graduates, according to Rappa, was $94,000, including signing bonuses.
Different options for finding data analytics skills, staffing
Until recently, companies looking to establish a data analytics program had essentially two options on staffing if they had trouble hiring people with analytics skills. One was to outsource the job to third-party analytics providers such as Mu Sigma and Apollo Data Technologies.
IDC analyst Dan Vesset said the third-party firms have deep analytics skills and experience, meaning companies that use their services don’t have to invest time and money in hiring, training and organizing their own analytics teams.
The downside is that using a third-party analytics specialist requires companies to give up control of their corporate data, a step that many organizations are unwilling to take. Outsourcing can also get expensive, depending on the scope of an analytics project. And there is the potential for a clash of cultures as the outsourcer tries to fit its analytics processes to the customer’s business model.
The other option was to cultivate analytics professionals from within. Most of the large vendors peddling advanced analytics technologies – IBM and SAS Institute, for example – offer training and consulting services to get internal staffers up to speed on their software. But that approach sometimes requires a significant investment in analytics tools upfront, often before the particulars of a data analytics program have been fleshed out.
In addition, advanced analytics pros need both technical and business skills, a set of abilities that takes time – and the right aptitude – to develop.
Analytics skills program ‘trying to produce that different kind of person’
A third option is emerging, however: A number of universities, such as North Carolina State, have established degree programs in advanced analytics. While their graduates won’t completely fill the talent pool, they could offer another alternative to companies looking for skilled, if not experienced, analytics workers.
Rappa, who is also a computer science professor at North Carolina State, established the master’s of science in analytics program there in 2008. As he saw it, students graduating with traditional statistics and computer science degrees didn’t have all the skills that employers were looking for in an analytics pro – a belief that was backed up by feedback from companies that had hired recent college graduates.
The master’s program aims to counter those deficiencies with a curriculum that draws on a number of disciplines, including statistics, computer science and business training. “The skill set that’s needed in this evolving world [of analytics] doesn’t sit neatly in a box,” Rappa said. “We’re trying to produce that different kind of person.”
And by the looks of it, many large, household-name companies are seeking the kind of person that N.C. State is producing. The businesses that have made job offers to the analytics program’s graduates over the past three years include Bank of America, Capital One and Amazon.com. Some of the leading analytics vendors have also made offers to graduates of the program, Rappa said.
Recipe for success: A mix of advanced analytics skills and talent
Forrester’s Kobielus said some of the more successful analytics teams he has come across are staffed with MBA-educated marketing experts who work hand-in-hand with statistical modelers. Business knowledge tends to rub off on the statistical “math gurus,” while the MBAs gradually pick up technical skills – helping to make the teams more cohesive and effective, he said.
Royal Bank of Canada has taken that tack in its quest to build an advanced analytics practice. The bank set up a data analytics team that supports the marketing department, helping it to better target marketing campaigns and find new revenue opportunities.
"We’ve got some Ph.D.s and some graduate degrees in statistics, and then some business analysts that have learned along the way and know the technology,” said Cathy Burrows, director of marketing services at the Toronto-based bank. "It's important to have a mix."
At Chartis, the analytics team includes not just a mix of workers from different backgrounds but also people with distinct skills, Savage said. Three of the seven staff members are specialists in data modeling and statistical analysis. Two are tasked with testing and maintaining the analytical data models. The other two concentrate on communicating the analytics results to end users via reports and other techniques.
Savage summed it up this way: “We try to find people that are detail-oriented and are also going to deliver high-quality results.”