How Much Do Business Analysts Earn?

What does a business analyst do, and why are they essential to their companies’ success? What skills do you need to become a business analyst? How much can you expect to earn? We’ll answer all those questions in this article.

With our dependence on digital systems increasing by the day, IT and IT related jobs like business analysts are seeing a continuous boom in opportunities. Did you know that IDC estimates around 60% of the global GDP will be mostly impacted by the introduction of digital tools by the end 2022?

The demand for tech talent remains high, and yet most countries are experiencing a shortage. Among these skill shortages, business analysis occupies one of the top spots. According to data published by Deloitte, the demand for ‘Analytical’ jobs has outpaced core ‘Engineering’ jobs. No wonder analysts are in such great demand!

Source: Deloitte

If you are looking to make a career as a business analyst, read on. And if you’re interested in getting a head start in acquiring the necessary skills, check out our SQL Basics course. It’ll introduce you to SQL – one of the most important skills for a data or business analyst. The fact that 275K+ users have already enrolled and rated it 4.82/5 stars testifies to how great the course is.

But before we jump into how much you can expect to earn as a business analyst, let me first take you through the typical job responsibilities and skills for this position.

What Does a Business Analyst Do?

The main responsibility of a business analyst is to understand what data is available to a company or business and how it can be used to track progress, measure business performance, and derive insights that can unlock growth.

Sometimes business analysts are assigned to a certain business function or department, such as marketing, finance, HR or operations. And sometimes they serve in a central IT team and may be shared by different business units.

For example, say you are an analyst working with the finance team. That team is responsible for making sure that the business investments bring in maximum return. As an analyst, you may help build views demonstrating how much money is generated by each asset. This may take the form of a dashboard built in Tableau, Power BI, QuickSight, etc. so the various business users can track their metrics. Most organizations would also expect reports of these metrics, which an analyst helps design.

In addition to that, analysts also support ad-hoc analysis. For instance, suppose the finance department now wants to understand which assets don’t have the expected return and why. You may create an analysis of various kinds of data related to revenue, product lines, geographies, etc. associated with those assets to find patterns that can explain the shortfall.

Of course, this is a small example. In reality you can add value to any domain that works with data.

Why Is Business Analysis Important?

Every company today needs data analysis to grow consistently. Gut-based decision-making won’t be successful every time, so businesses need to have a data-centric mindset.

And with the increasing amount of data becoming available, every company tries to use it to create an edge. A good analysis is critical to achieving this edge, which is why a well-established business analysis culture can do wonders for a company. This is what makes business analysts so valuable. It is a high impact and high reward position. Your ideas and insights can unlock millions in dollars, increase market share, decrease costs, and do a lot more.

So, what skills does a business analyst need to make this a reality?

What Skills Does a Business Analyst Need?

A business analyst works a lot with data. Therefore, general data and business understanding is the most basic skill.

When it comes to tech tools, the top skill needed for a business analyst is SQL.

Every company relies on databases to store their data; SQL enables you to interact with databases to retrieve and manipulate data. Therefore, understanding SQL queries in great detail is a must.

Second, you should know at least one programming language like Python or R. A programming language helps you automate analysis as well as take more control of data manipulation. Programming also enables you to stitch various tools together, since you can use it to connect to other systems and libraries for a more advanced level of data analysis work. If you want to learn Python in an interactive environment designed for all experience levels, check out our sister platform, LearnPython.com.

As mentioned earlier, visualization tools like Tableau, Power BI, or QuickSight (which help you create and present reports) also play a big role in business analysis.

Many companies today are moving from MS Excel to SQL, since it offers more flexibility and works with terabytes of data seamlessly. However, you still need to know Excel, since some of your stakeholders may not have advanced to SQL.

To summarize business analysis skills, these are the things you need to know:

• General data and business understanding.
• SQL.
• One or more programming languages like Python or R.
• Visualization tools like Tableau, PowerBI, QuickSight, etc.
• MS Excel.

I hope this clarifies what makes business analysis so important and what kind of tools and skills you need to have in your arsenal to thrive in the field.

Here are some of the courses you can take to improve your skills.

Let me now take you through how much you can expect to earn as a business analyst and – if you work in a corporation – what will your typical career path look like.

How Much Can You Earn as a Business Analyst?

According to Glassdoor, the entry level annual salary for a business analyst in the US is around $98K, which is just $2K short of a six-figure salary. This includes a fixed component of $71K and around $27K of additional bonuses (or sometimes stock options). The number is around 81,000 CD in Canada and around 71,000 AUD in Australia.

Source: Glassdoor

For top companies, this could be as high as $120K+ annually. That is an awesome amount of money to get started with!

Source: Indeed

If you are interested in the field but don’t know if you will like doing it for the long term, you can start as an intern and then figure out if this is work you will really like. Check out this article to understand where you can find such opportunities. Or if you are looking for a job already, then you may find this link handy.

Career and Salary Growth for Business Analysts

Most companies will offer you two different kinds of paths: as a manager or an individual contributor/ specialist.

For instance, let us say you join as a junior business analyst or a business analyst in a company. You are a great performer and grow into a senior business analyst position in a few years. Companies would allow you to then choose: 1) to become more of an expert on data analysis by going deeper into the technical or business aspects, thus becoming a senior individual contributor, or 2) move into a more management role in forming and developing teams.

Typical titles for individual contributors at senior levels are principal business analyst, senior principal business analyst, or specialist – business analysis. For managers, titles can be manager, senior manager, director, and so on. Of course these job titles and levels can vary from company to company, as some tend to be more hierarchical while others are relatively flat.

At each level you move up, you can expect to get a 10-20 percent increase in salary. If you start at a $98K annual salary, your first promotion will land you at $110K. This may eventually rise to $150K+ with 2-3 more promotions.

At senior levels, your paycheck is typically tied more to performance based bonus, which is linked to both individual and company performance. Say your typical base salary-to-bonus ratio is 80/20. As you grow, this ratio may shift to 50/50. Keep in mind that this ratio can vary from company to company, depending on the industry and stage. The total payout above director levels could be $300K or more.

Your individual experience and expectations can have a bearing on your income as well. These days, employers are ready to negotiate and create a compensation structure that can suit your requirements. Share your needs with the employer politely and they may be responsive. Obviously, your negotiation leverage will increase with skill and experience.

Freelancing as a Business Analyst

Maybe you don’t enjoy a fixed 9-5 life working in a corporation; you prefer being on the road while working as a freelancer. Some people also do some freelance work on the side to make a few extra bucks. Either way, freelancing can be a good source of income for a Business Analyst.

According to Upwork.com (a top freelancing website), business analysts earn between $25-$60 an hour. If you work for 6 hours a day at $40 per hour, working for 20-22 days a month can easily get you around $5,000 per month, pre-tax.

Source: upwork

Finding work initially as a freelancer can be challenging. But once you have done your first few projects successfully, finding work gets easier. I know people who started out as a freelancer and found so much work that they formed a small team. Some of these folks make as much as $200K a year.

Ready to Start your Career as a Business Analyst?

The above section should help assure that you can make a more than decent living as a business analyst. But how high you will rise is up to your own effort. Skill and experience will set you apart. While experience grows with time, you can control how much skill you muster.

In terms of tools, SQL should be the first thing you should master. I recommend taking our SQL from A to Z SQL track. Its 84 hours of interactive learning time will equip you with enough practice to get started with your data analysis career.

Once SQL learning is sorted, focus on learning programming languages and visualization tools. At the same time, try to understand how you can solve business problems using these tools.

I wish you all the best in your learning journey and your career as a business analyst. You’ll see that your hard work paid off when  you get your first paycheck!