Posted on July 2014 By Jack Bland
When hiring new staff, companies have several options in how to structure the terms of employment. For a long term ongoing requirement, a full/part time permanent placement is preferred, while for a short term requirement or a skills shortage, a contract position is often the best fit. Somewhere between the two of those lay fixed term contracts (FTC). FTC are part permanent and part contract; similar to a contract the completion date is fixed however similar to a permanent placement a FTC employee is paid an annual salary which can be pro rata to length of assignment, and has paid leave entitlements including holiday and personal leave and public holidays.
In the SAP market in particular, how the employment terms are structured can be largely dependent on the type of role being recruited. For example, skills high in demand might be harder to employ on a permanent or FTC basis when the lure of contract work (and its daily rate) is more attractive.
In this article, Account Manager Jack Bland looks at the current market and how it correlates to SAP consultant’s preferences for the structure of their employment terms.
As a whole the SAP market is currently rather strong with large ongoing projects in Melbourne at the likes of Medibank, MMG, CUB, SP AusNet and Orica, and potential projects also coming up in Toll and Honda. All government departments in Canberra are busy, Sydney has really picked up with NSW Transport and Lion. While there is still an ever-strong preference for contract work, overall we are seeing an appetite for both permanent and FTC roles, although this is largely dependent on the area of SAP.
Whilst it is possible to find people for most permanent roles with the right package attached, it is becoming extremely difficult to attract strong talent to FTC roles. The attraction of a permanent role for a candidate is the stability of full time work and the other associated benefits that come with permanent employment. A 12 month FTC comes offers little stability and a lower overall salary in comparison to a contract role. The result of this is that top SAP talent who are not interested in a permanent role are more likely to continue working on a contract basis rather than move to a FTC.
As there has been a culture to offshore technical work in the recent years, we are seeing large amounts of more technically minded people struggling to find work here in Australia. This means that in some technical roles such as ABAP and Basis it is easier to find full time resources as the amount of contract opportunities are limited. There are also certain modules of SAP that are in generally low demand in Australia where we are seeing a larger appetite for permanent/FTC such as ABAP, Basis, Security, PP Testers (depending on the area) HR and MM.
Where it is extremely difficult to find permanent resources are within the newer areas of SAP such as Hana, Fiori and UI5 and the Cloud based offerings such as SuccessFactors and Ariba. And while it wouldn’t be impossible to find a permanent resource for these roles, it would prove hugely challenging due to the increasing demand for such skills.
We believe that contracting will remain the choice for the majority of the top talent in the SAP market, unless you are recruiting for the “quieter” SAP areas outlined above. If recruiting for those busier areas, where demand is high, and in particular the newer ones surrounding the Cloud where resources are limited, offering a competitive contract would ensure securing the top SAP talent. However, if companies are willing to pay at least the market rate for salary and attach attractive benefits, it is possible to find permanent/FTC resources, but be mindful that it would be largely restricting options for those attracted to the benefits of contracting.