What is the ROI of certification tests.

goforthbmerry · June 2008

My director just sent an email that current policy does not allow re-imbursement of certification fees. He says he is willing to put some money in next years budget for them. The catch is that we must justify it by showing the usefulness and ROI of the certifications. My director won't be impressed with opinions and testimonials of unknown people. I am looking for any professional or scholary studies that will forward my cause. If anyone knows of any please let me know. I work for a large Fortune 100 company so all areas of IT are in use here. It is my intention to write up a case for certifications throughout the company.

Thank you for your time.
Ed

stlsmoore · June 2008

I think it's kind of surprising that a Fortune 100 company can't afford to pay it's employee's to become certified.

JDMurray · June 2008

In budgets, certifications usually come under the heading of employee training and education or continued learning. Rather than just going for certifications, link them to training. Obtaining certifications is not the goal of the training, but proof that the training was a success, like passing a final exam.

If your company has no training program/budget for its IT people, your best hope might be to discover how having people with specific certifications meets compliance regulations or contractual requirements. For example, a contract with your company for a security-related product or service might require that at least one person on the project to have an advanced InfoSec cert. You might also find that other departments in your company require specific, industry-recognized certs for consideration for promotion (such as the CISA for senior auditor positions) and use that as a precedence.

As a last resort, find several of your company's competitors that recognize certs (from their job listings) and promote employee training in their company literature. Try find a ways to show that certification of employees is an edge missing from your own company's business plan that's: 1) preventing the company from obtaining deserved market share, 2) disincentivizing the employees, and 3) robbing value from the share holders. Using terms like "limiting market share" and "decreasing share holder value" are terms that would scare any manager or director into quickly loosing the purse strings without requiring empirical evidence of a positive ROI of certification.

goforthbmerry · June 2008

Thanks for the replies-

Stlsmoore- They definately have the money. The issue is that, like many companies, they are looking to cut "discretionary"spending.

JDMurray- This is part of the training budget. Honestly, I am not certain what kind of training budget they have. I am sure there is one even if it is not large for this size of company. It is a retail company but we obviously have several sectors of IT, project management, and security that are part of any business this size.

I don't think the compliance for contract angle will work in my situation. I do think I might stress the Due Care and Diligence, disincentizing employees, and keeping up with current technology angles.

I would still like to show some empirical data to back me up. I am not sure it really exists but it would be helpful.

Ed

scheistermeister · June 2008

http://www.cisco.com/web/partners/pr11/resale_program.html

LBC90805 · June 2008

scheistermeister wrote:

http://www.cisco.com/web/partners/pr11/resale_program.html

Brass Taxes, the company you work for will receive discounts on Cisco Equipment and Services.

My friend is a data analyst and the company he works for is expanding to 20 plus sites. They currently have 2 network admins with none of them possesing Cisco Certs. They are going to hire a third admin soon to take up the slack that will be created when the network expands. My friend told the CIO that he is good friends with, me, an individual he went to school with that will be fully CCNA soon. The CIO eyes lit-up he said when he told him that. The CIO knows how much money they will save if they have someone onboard who is Cisco Certified. Knock on wood that may be me.

brad- · June 2008

The certification itself is not meaningful in respect to how it would impact the business. There are many experienced people out there with no certs at all, or no desire for certs...they just arent necessary in some cases.

However, as mentioned above, the training in preparing for the test is where you can make your argument. In addition, having certifications brings more credibility to what you say or suggest (though it shouldnt imho) if you deal with other companies or vendors.

eMeS · June 2008

brad- wrote:

The certification itself is not meaningful in respect to how it would impact the business. There are many experienced people out there with no certs at all, or no desire for certs...they just arent necessary in some cases.

I'm going to disagree a bit here. The intent of the certification is that some third-party attests (this could be the vendor, or an independent third party) that the holder demonstrated some level of knowledge in the topic area.

I believe that there is a big potential impact on the business of using certified vs. non-certified people. Primarily, hiring or developing certified people is one way to mitigate risk in an organization. If I have two candidates for a specific technology, with equivalent experience, but one is specifically certified and the other is not, in all likelihood the certified candidate gets the job.

Why? I don't know of any studies to back this up, but my opinion is that someone that is certified has demonstrated in a controlled environment that they understand the technology.

Take for instance the auto-repair industry. The majority of those guys are certified these days. The reason that they are certified is because demonstrating a certain level of knowledge and ability entails less risk for the business and less risk for the customer. Medical doctors are often "board-certified" as well in specific areas. I personally would prefer a board-certified cardiologist vs. one that is not.

This same line of discussion is why people with a degree are more likely to be hired over those without one. Whether it is true or not, employers believe that someone that holds a 4-year degree is a less risky and more capable employee than someone that does not.

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Back to the original question...

In my mind an ROI exercise compares the future results of one alternative vs. another. Thus, in this case, if your director invests $1000 to certify staff, in three (or five, or x) years what will be the value of that $1000. It is then easy to compare this exercise to what would be the value of the capital if it were invested at a guaranteed rate for the same time period.

A somewhat pointless exercise in my opinion, especially with respect to certification.

However, I think you do have an option. Since this is a Fortune 100 company, it is often necessary for these companies to define and track employee development. This could be because they've chosen to do this as part of their human resources management, or it could be that they are maintaining an international standard (such as ISO 20000, etc..) that requires that the employer demonstrate that employees have the appropriate knowledge to do their jobs. One easy way of doing this is to track both training and certification achieved by employees relative to the technology that they use.

Another option might be if you could point to a certain event that happened in your environment that impacted the business by some known amount. For example, I knew of a case once where because someone didn't understand a certain piece of technology, they cause as sever outage that cost the company several million dollars. In this case, appropriate training would have mitigated the risk, whereas no training means that you're doing nothing about the risk...

MS

RobertKaucher · June 2008

http://www.microsoft.com/learning/mcp/benefits/whyhire.mspx

On that page is a link for a PDF which has details about a study sponsored by MS.

I find it hard to believe that a manger of a fortune 100 does not already know this:
* Demonstrable skill set mitigates risk for shareholders.
* Use of industry best-practices increases productivity, response time and efficiency.
* Companies who employ a certain % of certified staff have less network down time.
* All of this means higher customer satisfaction.

Also, I believe any person who is certified should be able to speak objectively to the benefits of highering a person who is certified.

As far as companies paying for certs... I personally like to pack my own tool box.

RobertKaucher · June 2008

http://64.233.169.104/search?q=cache:vxsd2ZNGz64J:www.certmag.com/content/Contrib._Perspectives_-_Article_Page/422/67/default.asp+benefits+of+hiring+certified+Microsoft&hl=en&ct=clnk&cd=3&gl=us

I could only find this in Google's cache. Good stuff!

What is the ROI of certification tests.

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