Skill drain in SAP consulting – the loss of senior consultants from the market
With the ongoing slump in SAP opportunities since the economic meltdown many SAP consultants have been out of work for a long time now and many are returning to their previous professions for their trade to support themselves and their families financially.
Senior SAP consultants who offer a tremendous amount of experience and knowledge to their clients are leaving the industry leaving a massive knowledge gap, there are many causes of the out flux of these experts:
With the recession causing fewer opportunities within companies, with their IT budget being slashed there has been a reduction in the overall number of positions available at any level.
SAP customers are usually reliant on a set preferred supplier list (PSL) to provide them with any freelance consultants they require – however agents who are offering these also are looking to maximise their profits, from their point of view it is better to deliver a consultant who they can get more commission from – with PSL agreements there is a cap to the commission rate that can be charged however if a consultant goes through 2 or even 3 agents to get to the end customer that equates to 3 or 4 layers of commission – with many of the SAP agents having the same owners the margins are therefore improved – but that does not help the really senior consultants as they are naturally more expensive – even though they would be within budget if there was only one, low commission charged.
Consulting house staff are being laid off while their employer has no project suitable for them, leaving consultants on the bench is a costly option but sacking them leaves a void when a project is won – re hiring and retraining is both expensive, unreliable and time consuming – hiring these “on the bench” staff out on short term projects (as contractors) is now possible, but only through one solution - ConsultantBox.com and improves both ROI and staff retention and saves time. With the removal of all SAP agents to avoid head hunting – specifically done for this purpose.
Expectation – with a reduced budget SAP customers and even consulting houses are expecting to have a reduced level of experience, so there is no question that they have to reduce their own expectations so when they are not offered the senior consultants there is no surprise involved – while the seniors, they could hire stay unemployed.
Senior SAP consultants have worked hard to get where they are and generally would expect to be able to rely on their previous employers to recall them for more work – but with many companies rigidly sticking to their PSL they are now unable to hire directly. Some still have this as an option but these numbers are reducing monthly.
Perception – most customers believe that the rate they are charged is the rate that the consultant is charging and the commissions are small – this returns to the above point, but should not be overlooked – if a consultant is charging 70 Euro for their time and the PSL agent charges 15% then the rate is 80.5 Euro per hour however if the PSL agent advertises the role and an agent sends the CV – they will also charge 15% then the rate has increased to 92 Euro – even with only one layer involved the customer is then paying an extra 30% in commissions alone – if you expand the number of layers to two or three then it is easy to see why consultants are seen as expensive. Agents also have to eat, but unfortunately not at the expense of the SAP community and with tough budget constraints they can become an expensive luxury,
Cheap labour from certain countries, there are now many countries who provide cheap labour costs, after the off shore practice was found to be largely unsuccessful the SAP market has taken to hiring cheaper consultants – the quality of many are improving and some individuals are simply excellent at their work – but knowing who you can rely upon is still a very large problem in the industry today, but with companies watching budgets more than ever the quality issue is almost a side note. Until there is the same realisation as there was with the off shoring that quality of delivery determines the quality of the final product – plumbers, builders etc are usually hired based on reputation and references – SAP consultants also need to prove their worth to allow a rational choice to be made when hiring, this is the central point of the ConsultantBox ID number system – references of any SAP consultant is available free of charge to anyone in the SAP industry – including their personal references, experience and training – why would you hire without checking a persons reference, regardless of what job they will be doing?
Due to these, among other factors, more and more senior consultants are finding themselves out of work for long periods of time – stretching into years now. The reality is that SAP itself is pro-actively working to upgrade there products to react to the market situation but without working in the industry there is only a finite amount of time before skill sets become obsolete and retraining is needed and when that is combined with the above problems consultants are asking themselves some very tough questions which are leading them directly from the SAP market completely. This is not a healthy situation, though fresh faces are always needed there is always a great value in the experience earned through years of work which can not be replaced by budgetary solutions alone.
SAP consultants need to stay up to date and in a world of pro-activity they need to react or leave the industry permanently, ConsultantBox.com has been designed to deal with all of these problems and more – with direct search, select and contact being taken to the next level, SAP consultants prove their own worth and even their own rates directly to the potential customers who search there every single day, to save themselves considerable amounts of time and money, while assuring themselves that they are getting, not just the best rate but the best delivery.
