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Analytics skills in demand – and analytics pros demanding top salaries

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.

“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...

(note: we at AnalyticBridge have our own candidate database and job posting service)

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Comment by Karl Rexer on September 23, 2010 at 2:06pm
Good point about the Health Care and Tax sectors being tighter in their data restrictions and being less likely to hire outside consultants. I generally agree, but in some situations outside staff are still used -- for one of our consulting gigs we had data from a couple million US tax returns (of course we made sure that SSN, name, and a few other sensitive fields were removed before the data was given to us). I would also add that wall street investment firms, the military, and governments also typically have tighter data restrictions. So, it's tougher to get outside consulting gigs in these sectors too. Sometimes, however, this doesn't mean that these sectors won't hire outside analytic consultants, it just means that it's less likely and that there are more hoops to jump through before outside people can touch any data. For example, the Navy did some background checks before we could touch their data, and for our tax client the data could not leave the client's building. The most extreme example of this that I've heard is a data mining consultant friend who has been doing work for a government agency near DC. He can't tell me the name of his client, but he's mentioned that he must leave his cell phone outside the building, and the computer he works on is in a lead-lined room. He's had to get polygraph tests and several levels of security clearance. So I can guess that the number of data miners with both good skills and the right clearance levels has got to be a pretty small pool of people. I guess that helps increase the chances that the government will renew his consulting contract...
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There are a lot of great, fun areas to apply data mining and various forms of both simple and complex analytics, and companies are rapidly seeing ways that analytics can help their businesses. Thank you Tom Davenport and other authors who have written about the business importance of analytics. So there's a lot of fun impactful work out there, and a shortage of skilled people to do it. It's a great situation for all of us analytic people, whether we're working as employees or consultants!
Comment by Karl Rexer on September 23, 2010 at 11:40am
Yes, we see an explosion of interest in advanced analytics. We see it in the companies that contact us for analytic consulting (www.RexerAnalytics.com), and we also see it in our annual survey of data miners. The challenging economic environment is not reducing companies appetite for data mining: the majority of data miners reported that the their organization is conducting more data mining projects this year. Less than 5% of data miners report that their companies are doing fewer projects this year.
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Chris, you raise an interesting point about confidential data and companies' openness to hiring consultants to conduct analyses on confidential data. I am interested in hearing other people's experiences with this. Looking at Rexer Analytics clients, I'd say that most companies feel that data security and customer privacy are very important. We are also very careful to address these issues with each of our clients. However, in our experience, many companies with highly confidential data do not hesitate to hire external consultants to help them analyze their data. I also think that this can be done while maintaining tight controls on data security and privacy. We have conducted analytic projects for many banks, huge computer manufacturers, a tax preparation company, a law firm, and many other companies. What are other people seeing?
Comment by Chris Carozza on August 27, 2010 at 7:29am
The future certainly seems to be bright for people that have analytical skills. However, there must be some difficulties encountered by data analysis consulting firms that are hired by clients (companies). Many companies will consider certain data to be confidential, in fact it is often this confidential data that will yield significant returns for the client.

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