Hi there! Are you are developer thinking of becoming a business analyst? Or a business analyst thinking of getting into development?
I find that many of my readers ask about becoming a BA starting from a system development or programming background.
And rightfully, many are concerned about pay. What's the difference between a business analyst vs. a developer's salary?
Well, that's the topic of this article and I hope to shed some light on this. We'll take a look at BA and developer salaries in a bit more detail, and also understand some of the driving forces behind these jobs (e.g. location, solution, industry, offshoring, firm size).
How do the salaries of business analyst and developers compare?
Before we delve further, let's put some things into context. BA and developer salaries will vary based on a number of factors:
Let's look at these points in turn.
Similarly for developers - if you have skills in a specialized ERP package such as SAP, Oracle or one of the banking solution packages - expect your pay to be higher.
If you're skilled in COBOL programming, expect to get a higher pay compared to those developers who focus only on C++ and Java (which are more common IT programming skillsets).
For developers, they tend to get paid less than BAs in banking and insurance. For other industries like government and healthcare, their pay should be quite similar to those of BAs.
Right! Now that we understand some factors that may affect business analyst vs developer salaries, we should look at the numbers themselves.
Look at the table below which I've put up.
A table comparing business analyst vs. developer salaries
The data speaks for itself, but we can observe a key highlights (in red text).
Developer salaries tend to be higher in banking and insurance. A mid-level developer in banking can expect to get $50,000 to $120,000 a year. A mid-level developer in insurance can get $40,000 to $80,000.
But these are LESS than a BA in the same industries. The reason is that (my gut feel) banking and insurance place a higher premium on BA skills (e.g. industry knowledge, ability to facilitate and gather user requirements) than on pure development and programming skills.
Mid-level banking developers earn a bit less than mid-level banking BAs. At the junior and senior levels, banking developers tend to earn the same as banking BAs. However, at mid-levels, they earn a bit less, only about $50,000 to $120,000 compared to $70,000 to $140,000 for BAs.
Why? The reason (again, my gut feel) is that mid-level banking developers' skill sets are not as in high demand as mid-level BAs. Remember, in banking and insurance, the distance between BA and developer pay is higher, as BA skills (e.g. user and stakeholder management, facilitation and strategic analysis) are in higher demand in these environments.
Legacy System Programmers. Another point to note is that very specialized COBOL or AS/400 programmers are in high demand out there. They are very well paid. The reason is that these skill sets are now very rare - most youngsters pick up things like C, C++ and Java.
COBOL and AS/400 are used in mainframes of the 1960s to 1980s and now companies like banks and insurance companies can hardly find anyone who can help improve their old mainframe programming code. As a result, they're willing to pay top dollar for people who can do it.
Geography. With regards to location, my feel is that in less developed countries like Vietnam, Myanmar and Laos - the pay for developers tends to be less. BAs, especially English speaking ones who are also conversant in the native language - tend to be paid better.
I'll also list down a couple of other points with regards to business analyst and developer salaries (and these jobs in general).
Offshoring. With many jobs moving offshore, one has to bear in mind that development jobs (especially those in more common IT skills like C, C++ and Java) are being outsourced to India, China and the Phillippines.
Business Analyst jobs - by virtue of their need to interact with stakeholders, with the running and facilitation of workshops - tends to be less likely to be "offshored".
Case Study: Take my personal example. There was a point in my career where I had to decide if I wanted to be a BA or a developer. I chose the BA path because I always, always believed that stakeholder interaction, communication skills and the ability to present / facilitate workshops was a more important skill than programming code.
As a result, I chose the BA path and then later moved to project management. I never regretted that decision.
Of course, that being said, some of my ex-colleagues chose the IT developer path and many have gone on to become very successful IT architects. It depends on what you really enjoy and want to do in your career.
Career Path. One word about career path too. Business Analysts tend to be promoted or hired into more "management" type of roles. That is by virtue of their ability to foster relationships with stakeholders, perform change management and otherwise get people to find consensus on issues.
You'll have to admit these are very important management skills. As a result, BAs have a lot of "upside" in their career path. They can go on to become project managers or senior BAs. Other BAs take MBAs and transition into senior management. They can become C-level executives given the right opportunity. And in such cases, their pay will be way ahead of developers.
Developers, on the other hand - particularly those who choose to stick with a programming career path - tend to like doing IT. They may become development team leads, or IT architects.
These roles do pay well, and can easily surpass BA salaries, given the correct demand and environment. And in my opinion, at the most senior levels, developers tend to "max out" at the architect level and don't go on to become C-level executives.
The Singapore Market. A word on the Singapore job market for BAs and developers. From what I see in the Singapore job market, at the junior levels, there is little difference between a BA and developer.
Most of them tend to earn between $30,000 to $60,000 right out of school.
However, the most important thing is to be able to rise up and lead. If you can take leadership - starting from small teams, then bigger teams, and displaying business acumen and ability to work with others - tend you will climb.
This is regardless of whether you choose a BA or developer path. The reason, of course, is that companies place value on folks who deliver results. And in the corporate world today, results depend on people working well together.
So if you're good in that department - I think there'll always be a good for you - regardless of what job role you choose to be in.
Small Firms. One final point on BAs and developers, in terms of firm size. If you look at large companies, the BA and developer are considered separate roles.
But in a small, upstart firms, the BA and developer role are often the same. In fact, some software vendor companies which are quite significant in size also combine the two roles together.
If you think about it, it sort of makes sense that the BAs who gather requirements are the same ones who configure / program the solution - up to a certain point. If the scope of the project becomes too big, then you MUST separate the two roles out.
I hope the above has given you some good insight into business analyst vs. developer salary. Remember, if you're thinking about which path to follow for your career - it's important not to just base it on salary.
Give due consideration to other factors like job satisfaction, location and the impact it has to your family. These are all important too and you should think about them (e.g. for myself, I could earn more by being a BA in a bank - but I choose to remain in a consulting firm for special reasons).
That's all I have for now. Until next time, good luck in your job search for a BA or developer role!
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