How Compensation for Analytics Pros Really Works

One of the hot topics on this board is “compensation” for analytics professionals. My usage of “compensation” is intentional; I want to draw attention to the fact that one’s “pay” includes cash and noncash benefits.

In theory, one’s compensation should be mostly merit-based. What you bring to the table when hired, the quality of your performance and COLA (Cost of Living Adjustments based on the inflation rate) should guarantee annual increases. However, your noncash benefits (paid leave of all types -- annual, sick, jury duty, etc. -- medical care, vision care, prescription, accidental death/dismemberment, short/long term disability) also factor into the equation. For example, your salary may have increased by 1% over the past year. But if your company-provided health care costs increased by 10%, then you have actually received an 11% raise overall.

To get some examples of how compensation is viewed by your company, let’s consider these vignettes from Dilbert author Scott Adams:

As suggested by these vignettes, your compensation benefits may actually be considered company liabilities. While you seek to be rewarded for your skills, knowledge and abilities, managers want to produce the highest levels of products and services with the least amount of input; that is what they are paid to do.

So at this point you are probably saying, “Bryan, are you suggesting that my company would get me to work for free if it could?” Of course! Even the national measures of productivity are based on the highest levels of output with the lowest levels in input. Remember that the US experienced a Civil War, established the NAFTA trade policy, and created guest worker visas over the demand for access to high quality, low paid, and easy to replace workers.

Does this mean that I should increase my company value by secluding my code from others, thus making me indispensable? Should I get more certifications and thereby increase my value? Should I jump on the management track so that I do the firing? Should I move to the government where I might have more job security?

Here is what I suggest. Since you now have the inside scoop on your manager’s marching orders, you might want to have a private discussion with her/him about creating win-win scenarios. Since your manager was once in your shoes s/he will understand your concerns. That can be the launching point for discussing what you need to be more productive and in return obtaining a compensation mix that will keep you off of the “hit list”.

Along these lines, you may want to develop some cost/benefit analyses for your manager, as it relates to your company’s application portfolio. This will provide the dollar value for the development, and maintenance of your key business applications. As a Plan B, you might want to also develop a cost/benefit analysis for upper management of how much your company would save by trimming middle management (Caution: use only in case of pending staff reduction emergency -- like a merger/acquisition). If your manager only reviews your work before sending it up the chain, then subtracting her/his salary while delivering the same results is an easy sell to upper management.

The bottom line is that for management, the bottom line is the bottom line; it’s not personal -- strictly business. To that extent, it would behoove you to: 1. Optimize the skills cherished by your company at the least of amount of cost -- self-learning via You Tube is hot right now, 2. Craft an image as a team player vis-à-vis a mercenary, and 3. Keep something in your back pocket to protect your interests.

In closing, let me share this quote from Christopher McDougall: “Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn't matter whether you're the lion or a gazelle. When the sun comes up, you'd better be running.” This quote typifies the battle between management and staff over compensation for analytic professionals; you better get moving.