SAP workers in high demand

The average salary for certain high-level SAP professionals rose 15.6% in the past year

A shortage of skilled SAP workers is making it difficult for IT departments to fill open jobs and caused the average salary for certain high-level SAP professionals to rise 15.6% in the past year, according to Foote Partners, a consulting firm in Connecticut that studies IT workforce and compensation.

Foote Partners says the average base salary for directors of SAP program management rose from $115,468 to $133,500 in the calendar year that just ended. This increase of 15.6% dwarfs the typical increases in IT salaries of 3% to 5% a year, says David Foote, CEO and chief research officer.

"That's a monster figure," Foote says.

Overall, pay for 143 leading IT certifications averaged a loss of 0.1% of their value in 2006, while pay for 127 noncertified IT skills rose nearly 8%, Foote Partners reported Monday.

SAP, the world's largest enterprise software company, has 12 million users across 100,600 installations in North, Central and South America. The demand for employees who can deploy and maintain SAP software is fueled by the company's numerous products, from customer relationship management tools to governance, risk and compliance solutions.

SAP's NetWeaver platform, which helps companies deploy a service-oriented architecture, is one of the latest factors requiring companies to have a fleet of skilled SAP employees, Foote says. "SAP is obviously a juggernaut and they have a huge install base," he says.

Companies have largely failed to develop SAP talent in-house, and a shortage of skilled SAP workers on the open market is forcing IT departments to pay premiums to get those few that are available, according to Foote. It's not uncommon for SAP jobs to stay unfilled for nine months, he says.

"What they're telling us is ... when hiring developers, analysts and configurators, it's not unusual to be faced with having to pay 20% more to attract them than the people [they] currently have in those jobs," Foote says. "That's the price you pay for not having staffed adequately for your needs."

There are shortages in other areas of the IT workforce, such as project management, database management and storage-area network (SAN) administration, Foote says. But the challenges in hiring employees seem to be most prevalent in the SAP worker field, he says. Foote Partners has confirmed this in interviews with IT executives as well as with empirical research and statistical analyses.

"As a category, SAP seems to be where we find ... the most complaints, the largest number and the widest geographical distribution," Foote says.

Like the companies in Foote's survey, the Massachusetts Institute of Technology is having problems finding SAP professionals.

MIT has a staff of about 70 SAP workers and has three or four open jobs right now, one of which has been unfilled for more than half a year, says Allison Dolan, director of human resources and administration for information services and technology at the college.

Hiring full-time employees is difficult because many SAP workers prefer to work as contractors or consultants, Dolan says. They like to be involved in development and initial deployment but are less interested in ongoing support of SAP systems. Dolan says she has the same problem in finding employees to manage MIT's Hyperion systems.

"People who have that skill are fairly scarce and many of them are contractors or consultants," she says. "There's got to be some shortage because if there were ample people, you would see more [contractors and consultants] moving into employee ranks."

Nearly every time MIT hires an SAP professional, it is forced to offer salaries higher than the college originally budgeted for, Dolan says. Typically, salaries exceed the initial budgeted amount by 10% to 20%, she says.

SAP professionals have been able to command higher salaries than other IT workers for at least a few years, Dolan noted, pointing to research completed by Hewitt Associates in fall 2004.

SAP work was the most lucrative in IT at that time, exceeding systems administration salaries by 25%, the survey found. SAP work also paid more than systems integration, data warehousing, information security, Web infrastructure and network engineering.

While the laws of supply and demand are driving up the price for SAP workers, applying the term "shortage" to this situation may be misleading, says Herbert Lin, senior scientist at the Computer Science and Telecommunications Board of the National Research Council.

"This is sort of basic economics of labor supply. There's a shortage at a given price," Lin says. "If the salaries were $10 million a year, there wouldn't be any shortage at all. ... What employers mean is 'I can't find enough people at the wages I want in order to hire the people I think I need, so I'm going to have to raise wages.'"

According to Foote, though, some employers cannot find workers even when they are willing to raise salaries. This is true in SAP, as well as SAN administration, he says.

"That's another area where we have people saying 'I've got the money; we can't find the people,' " Foote says.

This story, "SAP workers in high demand" was originally published by Network World.

Copyright © 2007 IDG Communications, Inc.

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