ESI ANNUAL SALARY SURVEY
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1 ESI ANNUAL SALARY SURVEY In order to uncover how public and private sector organizations are going about building and developing their project communities, ESI International conducted the ESI 2013 Project Manager Salary & Development survey. THE PROBLEM Those responsible for project teams face short- and long-term challenges when it comes to the staffing and development of their project communities. As projects continue to increase in complexity and size, many project organizations find themselves with understaffed and underdeveloped workforces. In light of budget constraints, an aging base of experienced professionals, and a likely talent war on the horizon, those without a strategy for hiring, developing, and retaining top project talent are going to find it difficult to meet the increasing demand of their organizations. SURVEY OBJECTIVES In the survey, ESI polled more than 1,800 project managers to gain insight on the hiring, development, and promotion of project managers within their respective organizations. The survey takes into account regional and industry differences as it seeks to answer critical questions surrounding the most effective and efficient ways of building a project community. Some of the broader questions include: Is it more advantageous to hire experienced project managers from the outside or develop and promote internal ones? Does this vary based on the experience level of the project manager? Does training actually pay off when it comes to project manager effectiveness? Does this hold true throughout the project manager s career? How difficult is it to find and hire project managers at all levels? What levels of project managers are in the highest demand? How do regional and sector differences influence these results? In addition to providing insight helpful to organizations, the survey also answers questions useful for project practitioners looking to accelerate their careers in the profession. Some of these questions include: What is the current salary of project managers based on experience and the types of projects they manage? (see Chart 8) How long does it typically take for a project manager to advance through different levels of proficiency? (see Chart 4) How does training affect the promotions of project managers throughout their careers? (see Chart 9) How long does it take an experienced project manager to become effective in a new environment? (see Chart 4) Does training impact a project manager s effectiveness? (see Chart 3) How do regional and sector differences influence these results? (see Chart 6) 1
2 KEY FINDINGS The survey findings revealed some very interesting facts and trends that affect how project managers are hired, developed, and promoted; and for many organizations the survey revealed some apparent deficiencies in the overall development strategy of their project communities. PROJECT MANAGER PROFICIENCY LEVEL 0 = Recent graduate starting in the field of project management. LEVEL 1 = Project managers capable of managing small, low-risk projects. LEVEL 2 = Project managers capable of managing medium-size, moderate-risk projects. LEVEL 3 = Project managers capable of managing large, highly integrated projects. Key findings include: The staffing outlook for many project organizations appears bleak. Overall, 83% of project organizations reported that they were understaffed at some level of proficiency, and 44% of the reported shortages were for senior-level project managers (Level 3) capable of managing highly integrated, high-risk projects. (See Chart 1) Not surprisingly, the survey revealed that finding and hiring effective project managers is difficult for most organizations. However, finding qualified senior-level talent is by far the biggest challenge. According to the survey, 48% of respondents report that it is very difficult to find senior talent, and 89.4% report that it is very difficult or somewhat difficult. Given that 44% of talent shortages are for these positions, and that senior managers are responsible for managing the largest, highest-risk projects in the organization, the overall staffing outlook for many respondents looks bleak. (See Chart 2) Chart 1: Finding & Hiring Project Managers Finding & Hiring Project Managers 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 4.4% 11.7% 40.5% 48.1% 60.9% 41.3% L1 L2 L3 Very Difficult Somewhat Difficult Relatively Easy Very Easy 2
3 Chart 2: Current Staffing Shortages Current Staffing Shortages 44% 24% Level 1 Level 2 Level 3 32% Investing in the training of project managers makes economic sense at all levels of the project organization. According to those respondents who directly manage project managers, investing training dollars in the development of their teams pays off at all competency levels. As might be expected, the training ROI is highest for new graduates being on-boarded into the profession (ROI of 501%). However, what might not be as intuitive is the financial benefit of training mid-level project managers (ROI of 268%) and senior project managers (ROI of 358%). (See Chart 3) Chart 3: Training ROI Training ROI 600% 500% 400% 300% 200% 100% 0% 501% 358% 268% When possible, it is better to develop and promote from within rather than hire from the outside. Hiring project managers from outside of the organization is more expensive than one might think. The ramp-up time to get an experienced project manager up to speed in a new environment may take longer than many might expect. On average, bringing an otherwise experienced project manager up to a level of effectiveness in a new organization takes between six and 10 months depending on the size and complexity of the projects he or she is managing. (See Chart 4) 3
4 Chart 4: Time to Proficiency in Months Time to Proficiency in Months In the hire vs. develop comparison, there is a definite cost and time advantage to developing and promoting young and mid-level project managers. Though this advantage dissipates for senior-level talent (where it costs about the same to hire as it does to develop and promote a mid-career project manager), the point may be moot considering the difficulty in finding and hiring senior project professionals. (See Chart 5) Chart 5: Cost Difference of Hiring vs. Developing Cost Difference of Hiring vs. Developing 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 10.96% 7.7% 0.08% Project manager salaries are remarkably consistent across regions of the country, but not across industries. In terms of salary impact, the region of the country mattered very little for early career project managers, where the percent variance between the high and low was only 7.4%. The regional salary gap widens, however, as project managers become more skilled, reaching almost 12% percent for Level 3 managers. (See Chart 6) 4
5 Chart 6: Salaries by Region & Level $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- Salaries by Region & Level SW SE MW MA NW NE Outside US Level 0 $56,261 $54,119 $54,332 $58,250 $55,610 $54,109 $49,070 Level 1 $68,401 $63,359 $63,644 $70,000 $64,518 $65,768 $68,085 Level 2 $85,364 $78,207 $78,222 $86,058 $81,175 $81,787 $79,574 Level 3 $108,300 $98,864 $97,778 $110,096 $101,446 $103,511 $104,787 The parity did not hold up when considering sectors, however. In fact, the regional outliers that did exist, namely in the Southwest and Mid-Atlantic, were largely influenced by the high concentration of energy sector and federal government project managers, both of which were higher paid than their counterparts in other industries. The percent variance among Level 3 project managers across sectors was in excess of 67%. (See Chart 7) $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- Aerospace/ Defense Automotive/ Construction/ Manufacturing Engineering Chart 7: Salaries by Industries & Level Salaries by Industry & Level Energy/ Utilities Financial Services Government: City/State/ Local Government: Federal Information Technology Management Consulting/ Professional Services Level 0 $58,97 $57,17 $54,58 $65,22 $55,58 $54,41 $58,41 $57,51 $52,87 $52,60 $42,95 $55,70 $54,23 Level 1 $71,41 $68,12 $66,76 $85,22 $67,01 $61,23 $69,65 $69,04 $61,83 $57,17 $51,34 $65,50 $63,92 Level 2 $88,84 $82,96 $82,36 $111,5 $83,11 $73,44 $87,26 $85,19 $77,85 $73,04 $59,26 $81,03 $80,69 Level 3 $116,1 $99,76 $104,8 $147,6 $104,5 $90,08 $113,0 $107,2 $100,7 $94,34 $72,92 $101,8 $102,8 Media Non Profit/ Education Pharma/ Healthcare Telecommunications It s a good time to start a career in project management. According to the September 2013 salary survey conducted by the National Association of Colleges and Employers, the overall average starting salary for the class of 2013 new college graduates currently stands at $45,327. ESI s recent survey of project manager salaries indicates that new graduates starting in project management are earning an average of $54,953, or $9,626 (21%) more. (See Chart 8) 5
6 Chart 8: Average Salary by Level Average Salary by Level $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- $103,047 $81,520 $54,953 $65,818 Level 0 Career advancement in project management is fairly linear. On average, project managers advance at a closeto-linear rate from the time he or she start as new graduates (Level 0) to the time they are managing complex, highly integrated projects (Level 3). The average project manager took just over seven years in the profession to achieve a level of proficiency where he or she could manage larger complex projects. During this same period the average salary nearly doubled from $54,953 to $103,047. (See Chart 9) Chart 9: Time to Advancement in Years Time to Advancement in Years Project management training significantly accelerates advancement. According to respondents, five training days per year of project-focused training reduced the amount of time to advance from an entry-level project manager (Level 0) to a senior project manager (Level 3) by 12.6 months or over 21%. Training accelerates advancement across all levels of competency, but is most beneficial at either end of the proficiency scale. Project managers and their managers overwhelmingly believe that training has an impact on project performance with 31% responding that training has a significant impact and 68% responding that training has a significant impact or moderate impact on project performance. (See Chart 10) 6
7 Chart 10: Time Saved by Training in Months Time Saved by Training in Months SURVEY DEMOGRAPHICS The 2013 Survey received responses from more than 1,800 project managers and those who manage project managers. Approximately 13 industries and six regions of the country were represented in the responses. (See Chart 11) The survey was heavily targeted to US-based project professionals in the public and private sectors. (See Chart 12) Chart 11: Respondents by Region 7
8 Chart 12: Respondents by Sector The survey was limited to project managers and those who directly manage project managers. The average years of project experience for practitioners and managers were relatively high at 10.5 and 15.4 years, respectively. 8
9 CONCLUSION Many project organizations will need to take a more strategic view of the staffing, development, and promotion of their project managers if they hope to meet the growing expectations of the business. Few would argue that the project community is critical to delivering on business strategies. However, for many organizations, shortsighted hiring practices, a lack of competency planning, and a reduced focus on training and development may leave their project organizations in dire straits and put their business objectives at risk. While finding external talent is an important part of any staffing strategy, project organizations need to look inward and focus more on developing the talent they already have. Given the current shortages of experienced project managers, the demographic trends in the workplace, and the ramp-up time it takes to acquire industry and organizational knowledge, the future growth of these organizations may very well depend on developing the early and mid-career project managers walking their halls right now. Project organizations should carefully manage their flow of talent to ensure that project managers are hired and developed in the most efficient way possible to meet the current and future obligations of the organization. This requires baselining the current talent of their project organization, defining clear competency requirements for meeting current and future project needs, identifying gaps in achieving those requirements, laying out a development framework for project teams, and executing against that framework. 9
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