(US & Canada) | AI Skills Command a Premium Over Core Data Science — Burtch Works CEO

Michael Butts, CEO of Burtch Works, speaks with Robert Lutton, VP of Sales and Marketing at Sandhill Consultants, in an engaging video interview about the evolution of the hiring landscape in the data science, AI, and data engineering sectors and its impact on salary structures, the hiring and retention of talent, the evolution of skill categories, the rise in demand for contract staffing, the advantages of contract positions versus full-time positions, and partnering with Women in Data Science (WiDS) Worldwide.

Burtch Works is a specialized staffing and recruiting agency for data, analytics, and technology professionals.

Butts begins the discussion by stating that in a span of 15 business years, Burtch Works has specialized in statisticians, operations research, analytics, data science, AI, and data engineering.  In addition, the organization supports numerous Fortune 500 companies, small to medium-sized businesses, and private equity firms with executive search solutions.

Burtch Works executive search solutions include both part-time search and full-time placement, contact-staffing, and fractional executives, wherein senior leaders are placed, typically through private equity, says Butts.

Next, he acknowledges the massive evolution in the hiring landscape in the data and analytics space over the past five years. Butts affirms witnessing more job switches in the years 2021 and 2022 than in the previous 12 years. He states that the said years saw heavy hiring in the data science skill category.

According to Butts, the spike was driven by the pandemic, and as the demand for data professionals increased, so did the salary. He elaborates further that Burtch Works has three categories of individual contractors based on years of experience and a leadership category.

After monitoring the salaries of data professionals both from an individual contractor perspective and a leadership perspective, it was found that within all six skill sets — the base salaries had seen an upwards of 15% to 20% increase year-over-year.

However, this trend began to slow at the start of last year due to significant layoffs in the tech sector, which impacted the accelerated demand of 2021 and 2022, says Butts. Notably, the most salary reductions were seen last year in the AI and data management categories (MG 1, 2, and 3).

Interestingly, salaries for individual contributors in data science and AI remained relatively stable with some growth. However, the rate of job changes decreased significantly, indicating less demand. Moreover, the principal individual contributor category (IC3) also faced a salary reduction, driven by the heavy layoffs that primarily impacted the technology industry first, while other verticals followed.

Stressing whether or not the layoff cycle will end, Butts states that the organization is currently preparing to publish the 2024 Data Science and AI Salary Report. He reveals having a data community talent of over 150,000, and the customers are still in the “wait and see” motion.

Hiring is on for project-based work, and while some projects have been shelved or paused, other CapEx or OpEx-funded projects now require skill sets that the company does not have, says Butts. He adds that instead of hiring full-time practitioners, there is an increased demand for contract labor.

“There is an increased demand for contract labor.”

Summing up, Butts affirms that although the organizations are not fully out of the economic downturn, hiring is still happening in different pockets. He notes that fractional hiring has been prominent over the past 18 months and is being driven massively by the private equity partners that Burtch Works supports.

Highlighting how the demand for new skill sets has impacted the salary structures within the data science and AI industries, Butts circles back to when analytics, technology, and business birthed data science.

Although, he says, the nomenclature of data science is still used quite broadly, encompassing various fields including operations, research, statistical analysis, quant, and computer science-driven data science.

As the data science role takes up a large share of the market, Butts breaks core data science into two categories, wherein he considers the use of AI as an unstructured skill set and data modeling as a structured skill set.

According to Butts, AI skill sets command a premium over core data science skills, which reflects in higher on-target earnings (OTE), which include base salaries and, for some organizations, long-term incentive plans (LTIPs).

Commenting on the evolution of skill categories, there is a heightened demand for MLOps, says Butts. MLOps continues to be a solid driver in the market for the skill set evolution category. Apart from that, he mentions the large demand for data product management. Adding on, Butts states that with data product management, organizations are leveraging data to build more data products.

Moving forward, Butts discusses contract positions versus full-time positions in the data science and AI sectors. He believes that project-based initiatives will have the opportunity to leverage more contract labor versus hiring full-time, especially since the skill set might not be needed upon project completion.

Shedding light on the current dynamics of managed services, Butts says that many consulting firms leverage contract labor partners like Burtch Works to bring in talent.

For instance, it could be a “Big 4” firm and a premium that comes with the resources because they are sourced through two layers. In this scenario, there is a growing demand for Burtch Works to provide high-quality talent directly to customers. The direct approach benefits everyone, he says because there is a price benefit, contractors have a better experience and the firm provides resources across the project lifecycle.

Furthermore, in SMEs, there is a stronger demand for fractional leadership, also known as CXO practice, apart from the contract staffing demand. Regardless of who drives the need, it turns out to be highly effective to get specialized resources and thought leadership to companies that did not have such access before. This helps such companies make strategic decisions that increase enterprise value and provide assessments that enable them to reach their goals.

Emphasizing the advantages and disadvantages of contract versus full-time employment, Butts remarks that certain practitioners want more stability and do not prefer contracting. As this is a huge decision criterion, Burtch Works places many full-time practitioners and leaders because they either come from a full-time position or have never contracted.

On the contrary, from the contract perspective, the individual practitioner likes the contracting nature as it makes them more marketable, exposing them to more technology rapidly. Butts states that many customers avail themselves of the opportunity to “contract to hire.”

With this option, customers hire a contractor from Burtch Works, and post the required period, the organization has an FTE headcount. Further, if the organization gets accustomed to the contract resource, there is a mechanism where customers can convert the resource to full-time.

Thereafter, the contractors working with Burtch Works also like the hourly nature of it, in which they are provided with best-in-class benefits. These include medical dental vision, short- and long-term disability life insurance, and a Roth 401(k) matching scheme. These contractors are also entitled to take a couple of months off to travel or spend time with family before engaging in another project, enabling flexibility and competitive compensation.

Then, Butts pivots to discuss the partnership with Women in Data Science (WiDS) Worldwide that started five years ago. He states that WiDS was from Stanford University, and Butts worked with one of its Co-founders to provide market data on gender participation and compensation discrepancies in the data and analytics industry.

This led to contributing to a couple of whitepapers and finding out different areas where gender participation drops or lacks across the industry in general. He asserts that he sees less than 30% female participation in both individual contributor and manager categories in the data and analytics sector.

Butt states that there is a significant drop in females moving into leadership roles, and therefore, Burtch Works supports WiDS on the mission to drive 30% representation of female data and analytics leaders and practitioners by 2030.

Concluding, Butts shares that to do that, the Burtch Works team has put data into action by launching a dynamic product called Uplink.

Uplink is a career advocacy workspace where WiDS members can access Burtch Works’ salary reports and curated content. This would allow them to navigate their career, upskill, and create a better website or resume.

​ CDO Magazine appreciates Michael Butts for sharing his insights with our global community.