The Real Value of HR Certifications
For the second installment of our Newton Recruiting Insights*, we wanted to explore trends related to professional HR certifications. Specifically, we were curious as to what percentage of our users actually have professional HR certifications, and for those that do, we wanted to discover which certifications are the most popular.
From our survey of over 846 Newton “powered” applicant tracking system users, 22% responded that they currently hold some form of professional HR-related certification. As to which specific certifications our users held, the breakdown follows below (many of our users hold multiple certifications, so the percents add up to over 100):
- -PHR – 55%
- -SHRM-CP – 44%
- -SPHR – 28%
- -SHRM-SCP – 19%
- -Other – 4%
Furthermore, we discovered that of our users that do hold certifications, 55% hold dual certifications:
- -SHRM-CP & PHR – 37%
- -SHRM-SCP & SPHR- 18%
Are Certifications, Certified?
While considering these findings, we began to wonder about the perceived and real value of these certifications for recruiting and HR professionals. Sure we see them on email signatures, business cards, and professional profiles, but do these credentials provide a significant return on investment for those that obtain them, as well as for the employers that seek out and employ these certified pros?
Acceptance and Approval of Certifications
To help answer these questions, and to provide a better measure of the ROI for these certifications, we took the time to aggregate some additional research. In the US currently, 12% of those professionals operating in the fields of Talent Management (including recruiting) and HR hold a certification (145,000 from HRCI and 92,000 from SHRM).
Although this number is not exceedingly high, research carried out by the HR Certification Institute found that professionals view certifications as the, “best performing credential in many different dimensions such as learning, career advancement and value.” In fact, the only credential ranking higher than a professional certification was a Graduate degree.
So it is clear that HR and Talent Management professionals place a high value on these certifications. The question is, where is this value derived from and is this value real? To find out, we picked several criteria to assess the real value of these certifications.
1. Job Qualification and Progression
To us, the number one question when assessing the value of certifications is, do they promote career advancement? Many job postings list different certifications as a prerequisite for the job. However, will getting that PHR or SHRM-SCP on your resume really help you land that next job?
According to Deborah Gutman, the Human Resources Manager at Sierra Nevada Brewing Co., the answer is yes:
“Certifications definitely hold some weight. I would select a person with a certification vs. somebody who doesn’t have it. Basically, it means you have gone through a process and you have taken steps to gain a foundation of knowledge that is applicable to the field. It adds a level of credibility.”
- -96% of employers believe HR certifications to be important and would favor a certified job candidate over a non-HR certified candidate
- -58% of employers believe HR certifications to be extremely important
- -56% of HR department heads believe that having professionally certified employees has a positive impact on the profitability of their organization
- -95% of employers believe that an HR certified consultant would have a significant advantage over a -non-certified consultant
- -46% of US employers actually require certifications for HR positions
- -90% of people with PHRs and 87% of those with SPHRs were employed full time, compared with 69 percent of their noncertified peers
From these statistics, it appears that certifications may in fact play a rather large role in landing a job. Furthermore, beyond just getting a job, studies are beginning to uncover a strong positive correlation between obtaining a professional certification and career advancement rates. In the same study from above, 91% of employers indicated that certifications provide an advantage in getting a job promotion.
Payscale, a company that evaluates salary and compensation information, has carried out a series of studies supporting this. Through one study, Payscale found that having a PHR or SPHR significantly opens the door for career advancement. Below is the percentage of HR professionals receiving a promotion within 5 years, broken down by title and separated for those with certifications and those without. From the numbers, it is clear that those professionals who have obtained certification are far more likely to receive a promotion.
- -HR Assistant – 70%
- -HR Administrator – 57%
- -HR Generalist – 48%
- -HR Manager – 27%
- -HR Director – 12%
- -HR Assistant – 33%
- -HR Administrator – 27%
- -HR Generalist – 30%
- -HR Manager – 16%
- -HR Director – 8%
On top of this, Payscale found that those employees with certifications are far more likely to hold higher roles within their organization. Below is the percentage of professionals, at each title level, who hold some form of certification:
- -HR Assistant 5%
- -HR Administrator 11%
- -HR Generalist 28%
- -HR Manager 30%
- -HR Director 39%
- -Vice President, HR 42%
2. Pay Level
Another indicator that we used to gauge the true value of professional certifications, is their impact on the pay level of those people that have been certified. According to a separate study by Payscale, there is a significant pay difference between certified professionals and non-certified professionals across all industries, title levels and company sizes. Those with either a PHR or SPHR certification earn a median income of $64,700. Those without these certifications earn a median income of $45,600. This wage difference is especially noticeable in large metropolitan areas where the average percent increase in salary with one of these certifications is 41%!
3. Personal and Organization ROI
Lastly, we wanted to take a comprehensive look at the ROI of these credentials, both for the individual professionals who hold them, and for the organizations that employ certified workers. Based on the research that we could find, certifications do appear to have a significant ROI for both parties.
In another in-depth study, based on formula and score that they calculated, the HR Certification Institute found that professionals:
“Attributed a personal ROI of 253% and an organizational ROI of 216% to professional certification (281% and 241% among those overall in charge of their HR department). Among total respondents, over one-third believed that the benefits of professional HR certification were worth more than five times the costs, ascribing a personal ROI of 476%. Perceived value of professional certification increases proportionately with level of experience.”
Additional research from the HR Certification Institute and the Top Employers Institute, revealed several specific organizational benefits from employing certified professionals. According to the findings, those organizations that place a premium on certifications:
- -See their stock price outperform relevant stock indexes by 51% over 5 years
- -See a compounded revenue growth rate that is 14% higher than the relevant industry average over 5 years
Furthermore, those companies with 5+ HRCI-certified employees performed even better:
- -Stock price outperformed relevant stock indexes by 57% over 5 years than
- -Compounded revenue growth rate is 25% higher over 5 years than the relevant industry average
Lastly, the study also found that those companies with HRCI certified professionals, receive significantly higher approval ratings from their employees overall. On Glassdoor, companies with HRCI certified employees received an average rating of 3.46, compared with the platform average of 3.2.
But Not So Fast
Despite the research presented above, there are still skeptics of certifications. Obtaining one takes a significant investment of time and money, and many believe that real value of a certification is just too vague to justify this spend. Although there is some initial research attempting to quantify the real value of certifications, the bulk of that which is available has been conducted or sponsored by the same bodies that issue the certifications (some of which is referenced above). You would like to think that this research is unbiased, fair and accurate, but business interests do raise a flag for concern.
A large amount of leaders in the industry still believe that the most effective learning and professional development comes from actual experience on the job, not from studying for and passing a few examinations.
One such leader is Tamar Elkeles, Chief People Officer at Quixley. Elkeles asserts that she ignores certifications when vetting candidates for a job, stating:
“Most learning does not occur in a classroom within a few hours. It takes place on the job over longer periods of time. Certifications, other than perhaps in the benefits and compensation field, have nothing to do with real-world business skills. For 20 years, we’ve been hearing about how HR has to become more business-focused, and it still hasn’t happened.”
This is a good point that Elkeles brings up and one that I think many of us can agree with. No amount of studying and test preparation can compare with the real world experience of actually working in a given role.
So What’s The Verdict?
It is clear that getting certified offers some benefits to HR and Talent Management professionals, but are these benefits worth the investment of time and money? Based on our findings above, the verdict is still out so help us develop a clearer picture!
Let Us Know What You Think!
Share this article, engage with us on LinkedIn, Twitter and Facebook, or leave a comment below. This is a topic that we are genuinely interested in so we want to hear from the professionals in the field!
*Newton Recruiting Insights.
At Newton, we believe that the best data and insights can be pulled directly from our customer base. After all, what better way to get a pulse for the space that we operate in than directly from the passionate professionals which we serve, who are working on the frontlines every day? For this reason, we have begun our research, and over the course of the next few weeks, we are excited to begin unveiling our Newton Recruiting Insights*. Newton Recruiting Insights are made up of statistical data that we have compiled through surveying a total of 846 Newton users in the month of March 2016. These insights will allow us to analyze significant trends, themes, issues, and developments in the worlds of corporate recruiting and human resources management.