Now consider another equally astonishing fact. Only about 50% of the managers helming various projects today boast a certification that equips them with the skills needed to deliver as a competent project manager.
The gap between the demand for people who can keep projects on time and in-budget and the number of qualified candidates who can do so is rapidly widening.
And this chasm is opportunity for individuals with the right experience, certifications, articulateness and dedication who can command top dollar as their project manager salary.
Who is a Project Manager?
A project manager (PM) is an organized, disciplined, personable individual who ensures that the milestones (or sub-deliverables) of a project are completed on time and using the allotted volume of resources resulting in adherence to the deadline and expected quality standards within a pre-estimated budget.
A PM is generally the first point of contact between the heads of the departments that have a stake in the progress and execution of the project and the employees (talent) who have been tasked with the completion of the venture.
Thus a project manager may not be in the trenches grappling with the technical side of things but he contributes in terms of his ability to translate client (or management) expectations into concrete deliverables that team members can work on. A PM is also needed to eliminate chaos and miscommunication.
Samuel C Phillips who oversaw the Military’s Minuteman Program and the Apollo Mission is a celebrated project manager lauded for having all the qualities a PM should exhibit. Steve Jobs – Apple’s maverick Co-Founder was another brilliant delegator and planner.
What Determines a Project Manager’s Salary?
Not all project manager roles (and thus salaries) are structured alike.
In general there are four different levels of project managers whose pay scales vary according to the responsibilities they have to shoulder. But this is a simplistic view of the compensation that is offered to PMs in companies across the nation.
Associate Project Managers: This is a role offered to an enterprising and proactive employee who doesn’t hail from a management background but has shown promise and potential. The individual is assigned to the main project manager supervising a venture and is expected to assist his senior by picking up the slack, working with the team in a more involved manner and in general developing independence and capabilities to move on to a more robust PM role.
Level I Project Managers: These PMs have proven their mettle in single project settings. Level I project managers are concerned with a cohesive unit of employees who report to him (or her). He is responsible for taking decisions that affect the daily productivity of his team members and is accountable for the progress of the endeavor. However a Level I PM can’t take decisions that will impact the deadline or the budget of the project. In the US such executives earn around $77,000 per annum.
Level II Project Managers: With a salary that can touch the $100,000 mark, especially in the IT sector, such project managers also manage one project at a time but are in direct communication with the management and thus can work to persuade the decision makers to expand the budget or allow for additional time if a project is poised to consume more resources than what has been allotted. Thus the accountability also increases with the weight of responsibilities.
Level III Project Managers: These are seasoned PMs drawing up to $120,000 a year for their portfolio of specific skills. A level III project manager has a stellar track record of successfully wrapped projects concerning multiple products (or solutions) offered by the company and his word carries weight amongst the senior managers and stakeholders. Level III PMs are also known as program managers and are reported to by multiple Level II and Level I PMs.
Senior Project Managers: Senior Project Manager salaries don’t really have a benchmark because these individuals are not only responsible for overseeing and organizing the efforts of several programs (and thus Level III program managers), they also possess vast repositories of company specific knowledge and thus can streamline brand portfolios and determine how various programs fit within the organizational framework of vision, mission and strategic goals.Senior Managers are valued more for their understanding of the rhythm of the business than the generic skills that PMs are supposed to possess. Depending on the size of the company and the complexity of the product lines, the pay packet of a senior manager can be anywhere between $130,000 and $200,000 per annum.
At this point of time most Senior PMs are Baby Boomers on the verge of retirement and thus transfer of know-how is a major concern in organizations.
Leaving the discussion here is generalizing the concept of project manager salary. This is just the tip of the ice-berg. Compensation of PMs also depends on a number of other associated factors like competence and personality traits of the individuals.
Capabilities That Impact Project Manager Salary
PwC has found that 97% of businesses agree unequivocally that project management is critical to the success of the company. The trend of hiring professionals who are trained in the art and science of management has caught on and even small and medium enterprises who generally promoted employees to managerial roles on the basis of seniority are starting to look around for potential candidates who have prior experience as a PM.
It is no wonder that competence and behavioral tendencies play an important role in the decision making process around hiring a project manager.
A Good PM Should Display Most (or all) of These Traits:
Leadership Ability & Empathy: The two go hand in hand. A good PM is a person who guides his team to achieve desired results but makes it so that each and every team member feels valued, independent and skilled. Being a good listener is another quality that a PM must possess.
Crystal Clear Communication: A good project manager knows what information he needs to extract from the management and he is also well versed in the techniques of conveying this data as project deliverables or technical specifications to his team. Thus in short a PM is someone who translates mission and vision into to-dos in a way that confuses neither stakeholders nor resources.
Foresight: This comes in close on the heels of clear communication. Foresight refers to the ability to anticipate shifts and take pre-emptive action. It is essential for Change Management which is the process by which a project manager takes into account the variables (like external circumstances) impacting the eventual outcome of the venture and adjusts the project plan in a dynamic and comprehensive way to ensure deadlines are not violated and quality is not compromised.
Intuition: Conflict arises amongst employees or team members when the interests of one party are not aligned with the interests of another and neither is ready to compromise. Project managers who are not intuitive and doesn’t have a clear understanding of what the company is trying to accomplish through the venture may waste time trying to counsel individuals to step down from their stance of stubbornness. This rarely works. A PM who can get the job done is someone who attacks the issue differently. He brings both parties on the same page by associating individual interests with the larger company mission. Team members realize that their petty conflicts might hamper the progress of the organization which is ultimately not in their favor.
I have not covered qualities like domain expertise and certifications because they can be acquired by all professionals who are committed to scaling project management highs. This is something that recruiters around the world are also becoming aware of. Increasingly results of psychometric personality tests are being assigned greater weight during the selection process and thus figure prominently in determining the salary of a PM.
But there are a few duties or tasks that are not a staple in a PM’s roster of to-dos. If a professional develops proven expertise in these areas, he can definitely expect premium price for his insights.
Creation of contingency plans. These plans cover all the possible what if scenarios that might prove to be a road block in the path of smooth project progress and detail solutions for each event. Contingencies rank in the top ten challenges a PM has to face and a contingency plan requires foresight and domain knowledge to assemble.
Management of scope creep. This is a sensitive issue. Supervisors and clients often request adjustments that might increase the scope of a project considerably. PMs who can strike a balance between satisfying the stakeholders and keeping the project on time and in budget by accommodating only truly relevant changes are rare individuals who will be able to command more compensation for their abilities.
The best way to optimize project manager salary is to follow the precedents set by PMs who are already in the top percentile of high earners. These suggestions have been compiled from interviews of managers who have aced their respective fields.
Master the Project Management Body of Knowledge (PMBoK): Most PMs work with only a handful of better known techniques and strategies. But the PMBoK is a gold mine of approaches for all possible management deliverables and contingencies. A project manager who can choose the most effective techniques and weave them together to create a strategy is someone who is bound to be a company asset.
Earn Supplementary Certifications: Apart from the university education, it is important for a project manager to keep improving his profile and his skills through additional certifications like CAPM (Certified Associate in Project Management), CAPM (Certified Associate in Project Management) and the PgMP (Program Management Professional) for swift promotions. Any degree that is globally recognized and helps you get closer to the abilities your seniors possess is a good choice.
Ensure That you are Always Up to Date: What does this mean for a project manager? It refers to following the new paradigms of management that are producing good results in your sector or niche and picking up the best practices for implementation in your own day to day work. For example a PM who is proficient at the agile methodology or well versed with lean management principles can earn up to 20% more than peers with the same experience.
Carefully Choose the Industry You Want to Work In: This is a decision that you should ideally make as soon as you graduate college and start preparing for your Master’s degree. Some sectors like Finance and IT pay project managers more. But the caveat here is in the form of competition. If the pay is better professionals are motivated to join the industry resulting in saturation.
A project manager’s salary is not something that is randomly determined by the company. There are definite guidelines to follow and aspiring PMs can leverage the differentiators discussed here to earn more than their competitors.