InsideSAP

01 Dec 2008

The Panel >>

Lauren Sharp SAP Recruitment Consultant Everjoy Consulting

Dawie Gerber General Manager Partners & Alliances, Extend Technologies

Alex Gomez Principal SAP Recruitment Consultant, Aurec

Iain Macleod National ERP Delivery Centre Manager, CSC

Alex Fitzgerald Partner, Clear Business Solutions

Costa Argirellis SAP Specialist Consultant, Genesis IT

Freya Purnell Managing Editor, Inside SAP

Peter Sertori Communications Director, SAP Australia and New Zealand

FP: Traditionally the skill shortage has had a cyclical effect, and looking particularly at issues like the FI/CO and HR/Payroll requirements around financial year end, is there any way from an organisational perspective that there could be a planning cycle so that recruiters and companies can be working together on this?

AG: Absolutely. I think you can be far more strategic. With the clients I deal with, we have strategy meetings once every six to eight weeks. I’m also in touch with the business development managers, so I can email candidates and I can map where they are for when the projects are coming up. It’s not always defi nite, but it certainly helps with the projects when they come through.

 AF: Basically there’s only a fi nite amount of resources and if you’re on the ball you’re going to be able to tap into those resources and secure them before the last minute and having a knee jerk reaction.

AG: I think also a key part of it is recruiters having access to the line managers as well, not necessarily for the entire process, especially for employers with HR, but they have to be involved so you’ve got somebody on the ground. Otherwise sometimes you’re looking for this resource, but not getting the full information. It can be a bit frustrating for both parties.

DG: Specifically HR/payroll is probably the biggest one that gets affected by a cyclical effect. So what you fi nd is that if you work smarter, it’s all about communication, it’s preparing customers for that, so they can get ready and they can request someone to actually support them. What we’d specifically do is a package service around offering that kind of service at that time of the year.

FP: Moving on to new technology developments, staying up to date in the SAP market can be difficult. How can we address the skill shortage in new technology areas and how can consultants be sure they are keeping their skills up to date?

AG: It’s a bit of a double-edged sword, because if they’re going to go away and study, then they may be missing out on opportunities, so that’s always a problem with the consultants in the contract market. From a permanent employee’s perspective, then of course it’s down to the organisation employing them to make sure that they’re at the leading edge all of the time. But again Australia seems to lag a bit in the technology, so it’s a bit difficult, because there are people here that have the skills already to be able to pass their knowledge on in an organisation.

 IM: I think the process or business knowledge is easy, because you find areas like GRC are an expansion of an existing skill set, so I think it’s a natural progression for consultants. I think technically it’s a bit more challenging, because quite often it’s a different skill set that’s required, for example, ABAP moving to Java.

DG: A bit of it is because Australia trails a couple of months or years behind. There might be one or two early adopters that are part of a ramp-up, but other than that there’s a huge gap or time delay before the numbers start adopting.

CA: A good way to counter that would be to be part of the process of talking to line managers and saying what’s happening next, and them saying we’ve got an SAP banking project coming up in six months, I’d recommend you start looking for people now. Just to give us more warning in order to search the right candidates.

PS: Are qualifications valued by employers?

AG: I think they are, however if you’ve got somebody that’s got a certification and then somebody that’s got ten years’ experience, then the person with ten years is always going to get preferential treatment.

LS: I do think experience outweighs certification and where that experience has come from.

AG: If you look at the average age of your SAP consultant on the functional side, they’re a lot older than the technical side. I think there’s a real shortage of people that are coming through.

PS: For someone with say ten years’ experience, they might still have never updated their skills, although they might be well skilled on the old versions, is that coming out?

AG: I think it’s just because R3 was always really, R2 and R3 were the core and now obviously it’s ECC or BRP. It’s just based on the project experience, not necessarily the configuration. It’s like riding a bike, it’s really knowing what to do and when to do it and the reporting line and looking to the right process.

FP: If you’ve got new people coming in and they do have those qualifications, but no experience, do you have trouble placing them?

 AG: I think so as a recruitment agent, because why are you going to pay for somebody who can’t hit the ground running? We charge a premium for qualified people that can do a certain job. Although I know most of the major consultancies have graduate programs, and you just don’t see those people coming through the ranks.

IM: You’ve got to make it attractive for the project to take them and once they’ve got that project under the belt, it’s much easier to get them out there again, but it is hard sometimes convincing customers who have got time and cost pressures to take on more inexperienced people than someone who’s got five or ten years’ experience.

 FP: So what could we do differently to get some of those people over that first hurdle? Is it combining project experience at some stage with their university education, so by the time they’re qualified they do actually have a bit of experience under their belt?

 PS: It is the classic catch-22 otherwise. The workforce is only going to get older and older and older.

AG: I think a buddy system where somebody is shadowing might work, and they’re not necessarily getting the hands-on

experience immediately. I think you’d have to incentivise your senior people to be able to do that for the more inexperienced guys.

LS: I think that’s great in theory, but then it comes back to Gen Y – their salary expectations when they walk out of university are up in the clouds. So trying to tell them to take $40,000 and shadow someone for a year, you might as well hit your head against the wall.

DG: And you’re paying that guy $150,000 a year to spend unproductive time. So that’s very expensive training.

IM: The other thing, if you put somebody on a project, it’s not a real return on value. They become almost a run-around for everyone else and unless you’re going to make them an integral part of the project with deliverables and outcomes, they don’t get the value either, because they’re not going to be driven.

FP: But is this a bit short sighted in the industry, given that everyone is complaining about the fact there are no resources, but nobody wants to spend any time bringing people up to speed?

 LS: I don’t think it’s that they don’t want to spend the time, I think they don’t have the time. Everyone is working ridiculous hours now to meet project deadlines, we work ridiculous hours trying to find people to meet those deadlines.

AG: If I come across junior candidates, I’ll put them in touch with the people directly, say speak to this person, but you never hear of them coming back to you and saying I got a great job.

DG: It’s also managing expectations. Have a real job fi rst for a couple of years before you get into an IT gig. Understand what business is about, understand how things really work. You can’t expect just to walk into an SAP job and everything is going to be hunky dory and you’ve got actually no idea what you’re talking about. You don’t know the technology either. We are running a program at the moment, just skilling up HR/payroll people because there’s just none. Our strategy is to go and hire people who have got payroll experience with another product, and training them up. It’s easier to train someone on new technology that’s got the business experience to back it up.

AG: A lot of the senior people that are around these days actually have been working on a site doing a shop fl oor job and then they’ve implemented SAP and that’s where they picked up their skills. And later they go to the top of the food chain.

FP: The maintenance of skills has traditionally been the responsibility of the individual contractor or the service partner. Is there a way recruitment consultants can further promote and support the development of the SAP skills in the market place?

AG: I think part of the success of a lot of the projects is how much money they have to spend on the resources, that’s the bottom line. It’s a shame that it’s like that, but it’s not necessarily us that dictate the rates, it’s candidates, and a lot of consultancies as well, because when people are absolutely desperate for somebody they’ll pay a premium rate. Unfortunately candidates know that, so it’s very difficult for us to be able to dictate what happens.

FP: Are candidates getting too greedy in this marketplace?

AG: Absolutely.

LS: Some of them have to be brought down a peg or two. You’ve just got to be honest with them, you just have to tell them that they’ve got their head in the clouds and they can’t demand these ridiculous amounts of money.

AG: A year ago permanent people that had been paid $120,000, some of them are earning $160,000 now.

 DG: If you stand on the other side of the fence, for some of you guys, this is a general comment. I feel that customers only have so much money to spend, so from our point of view when you do a project they’ve got a budget. We have got to make some money and our daily rates don’t go up, so what you’ve got to understand very clearly is that rates don’t keep up with salary expectations. So our margins become smaller and smaller. We have to do things ourselves to still stay in business. So the message you need to get out to the market is that our SAP daily rates aren’t going up. Your standard ABAPer only get so many dollars a day. They might have ten years’ experience, 15 years’ experience, you’re only going to get $1,200 a day for them say. If it’s an SAP IS banking expert, different story, yes you can get $2,500 a day, but it’s not across the board, it doesn’t fl y.

FP: Where is that message coming from?

AG: It’s like urban myths – occasionally clients will pay a certain extortionate figure for a candidate, whether it’s permanent or contract, and then all of a sudden, it gets out to the market and everybody wants a piece of that pie. And people are so transient as well, even in the permanent market.

AG: Also the thing is that with a lot of candidates these days they’re not looking at the bonus component. They’re just interested in the base and their super and that’s pretty much it.

LS: Not only that, there have been a few companies out there over the last few years who have had these wonderful bonus plans and no one has seen any of it, so they’re very wary. If it’s an annual bonus scheme people don’t even want to look at it. If it’s quarterly paid or even half yearly paid, they will consider that in their salary packaging, because they’re seeing the fruits of their labour a lot quicker.

AF: It depends on the visibility and their control over that. If they’ve got full control over X, Y and Z and tick these boxes, I’ll get my bonus then, people tend to be happier than someone sitting down in appraisals saying, ‘I’m sorry you didn’t meet with my expectations’ and it’s all a bit vague.

IM: I think it’s interesting, customers are still in 2003/2004 and have not realised - with all the talk about the skills shortage, the daily rates aren’t really going up, and I get a feeling there will be a watershed at some point where it’s just not manageable anymore, it’s not profitable to operate in this way. Customers and end users are going to have to recognise it. Maybe it’s by much more differentiated skills or some other standard skills are set at same rates… But I don’t get the feeling the customers are buying into this in terms of the costs.

LS: I think it comes down to the offshore model too, where a few of the overseas companies have come in over the last few years offering ridiculous daily rates and pushing everything offshore. People are wanting a local resource, but want to pay the offshore rate and they’re not marrying the two together.

FP: With an increasing number of mid-size companies implementing SAP, how do you effectively differentiate the service offering for the consultant organisation as opposed to a recruitment firm?

 IM: It depends on the market; in Canberra, the market is predominantly contract, so I think it depends on the location.

 AG: In places like Canberra you also take into account that you’re going to have more contract people than permanent on board.

IM: I think it’s making it more attractive to get people in and it’s doing things outside of just the financials. So it’s giving them access to opportunities overseas, maybe do a bit of interstate travel.

FP: Is there a way that recruitment and consulting partners can operate with greater transparency to allow both partners to engage more effectively in relation to both the tender process and the pricing structure for both parties?

AG: Again I think it’s not necessarily based on financial margins and so on, it’s based on what the market is doing. I think it’s really difficult to partner, but I’m transparent with a lot of my clients – a few because they’re transparent with me and we have very much a partnership. I’m involved in their business, they are with our business and they’re very honest and we share information. That works very well, but again I still don’t think that recruiter’s margins are the issue. We’re not putting 50 per cent margins on the candidates that we’re dealing with and if anybody is out there, then they’ll get found out.

IM: Usually when you get preferred suppliers, you know exactly what the percentages are and it’s really more both of us getting squeezed by project rates and customer rates, rather than any cartels from a consultant or recruiter.

FP: From a partner perspective, do you think there’s scope for recruitment partners to work together with consultants for a more cost effective solution here?

DG: Absolutely, at the end of the day it’s what our customers expect of us, it’s about adding value. For growing organisations, we hire a lot of people, we interview a lot, so once you’ve gone through ten CVs you might shortlist two people to interview and of those you might not hire any of them. So time is of the essence, so if you want to add value you’ll screen properly up front and if you put through the good quality people, you’ll get repeat business. Then you become a preferred supplier and there’s no questions asked. And I’ve got the comfort that my company is not the hunting ground for some recruiter to go and try and steal my people. Most consulting companies have got an internal recruitment section and it works at different levels of success, all of them. But we’ve got overseas relationships as well. Obviously everybody is aware of the UK and South Africa connection – people putting their hands up saying if you can sponsor my visa, you’ve got me for life. So we do go offshore to find people. Firstly their salary expectations are a lot more realistic, it brings in new blood into the market, it’s not the same people getting recycled, going from pillar to post and then all you do is up the salaries all the time. So absolutely how could you work with recruiters, there is a need for it, but understand we need to go through our processes first. As I said before, our rates aren’t going up; the pressure is on us to get our costs down. We’ve got five people on the rack in the office, so it’s all about costs, it’s all about managing our bench and retaining staff and making sure they do keep getting interesting work.

AG: I think what a lot of the major players should be doing is partnering with recruiters, rather than going we’re going to use 10 people and throwing stuff out to the market. You need to partner with people, have an understanding of each other’s business, communicate on a regular basis.

PS: With some of the other parts of the industry – Microsoft, .Net, Cisco, Oracle – are they having the same issues in terms of the shortage of people or is it purely SAP?

 AG: They are and they aren’t. I think it’s again very much based on what the market is doing and what projects are going on. Costs have gone up massively over the last three years or so. But it’s mainly the specialised areas – mid-range, Unix and .Net, any kind of development, Java. Again there are lots of people out there, but it’s identifying the quality people that are actually going to add value to your project. That’s the issue that we face at the moment.

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