Why are Some Technology Certifications Losing Their Value?

For recruiters and hiring managers, certifications are a straightforward way to determine whether a job candidate has the necessary skills for a particular job. For technologists, certifications are also a way to stand out amidst a crowded field, particularly in competitive specializations such as cybersecurity.  

And yet many certifications are declining in value, according to analyst firm Foote Partners, which regularly evaluates the market values of certifications and non-certified tech skills as part of its IT Skills and Certifications Pay Index. “For 540 tech certifications, average market values decreased for the eleventh consecutive quarter, down 0.4 percent overall, currently earning the equivalent of 6.7 percent of base salary on average for a single certification,” the firm reported. “That’s the lowest average pay premium for IT certifications in 7 years.”

For non-certified tech skills, things were a little better. “Extra pay awarded by employers to talented tech professionals for 613 non-certified tech skills—also known as cash pay premiums—declined on average in the first three months of 2021 for the second consecutive quarter,” the firm added. “This is only the second quarterly loss in two years. Currently averaging the equivalent of 9.4 percent of base salary on average for a single non-certified skill, this is just shy of the highest average premium in 20 years.”

Values declined for certs in multiple areas, including application development, databases, and project management. For example, PMI Program Management Professional (PgMP) saw its market value decrease by 14.3 percent over the past twelve months, bringing its average pay premium to the equivalent of 12 percent of base salary. Certified Forensic Computer Examiner (CFCE) experienced a 21.4 percent dip in market value, with its average pay premium hitting 11 percent of base salary. 

Not all certifications saw declines, however. Certain cybersecurity certs such as InfoSys Security Management Professional (ISSMP/CISSP), networking and communications certs such as AWS Certified Solutions Architect – Professional, and systems administration certs such as Red Hat Certified Architect (RHCA) all saw appreciable gains.

That a single category such as cybersecurity can have a mix of losers and gainers speaks to one of Foote Partners’ consistent theses: The very popularity of certifications can drive down their market value over the long term. As more people obtain a particular certification, it shrinks the gap between supply and demand. When it comes to skills and certifications, scarcity is your friend; companies are willing to pay far more if you’re one of the few who’s certified in a particular area.

It’s also important to keep in mind that certifications expire, and that companies will periodically replace aging certifications with newer ones that incorporate new knowledge and tools. Age can reduce a cert’s pay premium, irrespective of its popularity. If you’re a cybersecurity expert or a sysadmin, for example, obtaining the latest certifications is key, as employers may not look quite so favorably on the ones you earned several years ago. 

According to the most recent Dice Salary Report, fewer than half of surveyed technologists (45 percent) had technical certifications. That’s roughly the same as 2019, when 47 percent told Dice they had at least one. But technologists claimed good reasons for not pursuing certifications: For instance, some 51 percent said that certifications weren’t needed for their role; another 16 percent suggested their employer wasn’t willing to pay for training and testing. Fourteen percent said they simply didn’t have the time to earn one. 

The Dice Salary Report also showed that many certifications declined in value between 2019 and 2020, although the jobs associated with them still earned quite a bit:

It’s vital to note that not all employers want certifications, so long as candidates can demonstrate they have the skills to succeed in a particular role. If you don’t have the money or time to earn particular certs, there are still many jobs open to you.