Workforce Cuts In The IT Services Industry

During last week’s financial report for the 4th quarter and full year of 2022 SAP CEO Christian Klein announced that the corporation would be carrying out “very targeted restructuring”: laying off 3000 employees, or 2.5% of the global workforce.

This move comes after a period of dramatic change to SAP’s business model as it moves to become a “true cloud company” with the majority of its earnings eventually coming from cloud-based software services.

The change to the structure of the SAP workforce is not solely due to this change to a new business model as it also reflects recent layoffs by other large technology corporations.

Other big tech businesses including IBM, Salesforce, Microsoft, Alphabet/Google, Meta, and Twitter announced reductions of their own workforces in reaction to an expected upcoming recession leading to a consequent slow down in consumer and business spend.

IBM announced that it is to cut nearly 4,000 staff, Salesforce is cutting 8,000, Microsoft 10,000, Meta 11,000, Alphabet/Google 12,000, and Amazon as much as 18,000. So compared with the wider trend SAP’s cuts are fairly reserved.

Though the macro trend of ever-increasing expansion of the tech industry and the IT services industry is going to continue in the long-term, many corporations are choosing to consolidate their existing businesses with a temporary period of job cuts before a fresh round of hires over the years to come.

All businesses go through periods of expansion and contraction as they develop, but the IT services industry, because it has the added dimension of technological change, is particularly prone to sudden structural change.

This degree of change is not altogether bad for those who are employed to implement SAP systems for businesses because their own role is made necessary by change itself. Many of the macro economic events of the last few years have in fact contributed to the need for businesses to digitise their operations so that they are more agile and able to adapt to changes in consumer behaviour and in the wider economy.

We are going through an unprecedented era of volatility in the global economy and in the world of IT services, so this week IgniteSAP is going to discuss a few strategies and habits that an SAP consultant can adopt to ensure they become, as far as possible, indispensable to their employers and extremely employable in the event that they have to find a new role.

Become an Indispensable SAP Consultant:

The Value of the Workforce

The workforce is one of the most expensive operational costs of many businesses. A poorly deployed workforce is a huge cost but a well managed workforce is one of the primary assets of an enterprise: particularly if that group is highly skilled.

It costs a business far more to onboard and train a new employee than retain an existing one, so even from a financial perspective it often does not make sense to make any sweeping workforce cuts, but rather to improve or even retrain existing team members for a new role.

Smart business managers will always seek to retain an existing workforce when they can, but sometimes this is not possible, so when cuts are made then it is best for the business if they are as targeted as possible.

It is important to emphasise here that the value of the individual employee to a company is based on the added-value they bring to that business after their salary has been taken into account. This can sometimes be difficult to measure accurately and objectively, but self-awareness and awareness of the needs of the business can help employees ensure their daily activities are always bringing more value to the business than their cost of employment.

The Value of Team Work

Because most roles in a larger businesses are usually working as part of a team, the value of an employee often resides in what they contribute to that team’s work. While it is true that sometimes employees are compared to each other in terms of productivity it is not appropriate to openly compete with one’s co-workers, but rather help the team towards a common goal.

The business should be competitive but if every employee is competitive among themselves then that can be counter-productive. Rather than comparing oneself with colleagues and aiming to achieve more than them, a useful employee should look to motivate themselves along the lines of self-improvement rather than competition.

Attaining and Maintaining Employment

If you want to maintain your position in your current role in the SAP ecosystem, first look at what makes a great SAP consultant, then consider if you are applying these principles in your implementation work.

Then you will be able to act with confidence, improving the degree of value you add to your current employer’s business, and also find a new position more easily when you need it.

SAP Consultant Skills

You may already have attained global certification in some modules areas of SAP, but take a look at your skills and ask yourself if they align with what your current or ideal potential employer needs. Perhaps even approach your employer and ask them to fund further training and certification in SAP.

Even if you cannot be sponsored to train you should still engage in a process of lifelong learning, setting aside time to expand your skills and get new qualifications. This investment will pay off.

Apart from the obvious benefit of an ever-increasing pool of knowledge to your daily SAP work, it demonstrates to your current and future employers that you are constantly improving and will therefore be a more valuable asset to them in the future than you are already.

Study S/4HANA and S/4HANA Cloud, if you are not very familiar already. Preferably get yourself involved on projects implementing S/4HANA and you will become fairly indispensable as most SAP projects require a good understanding of the database.

Have another specialty under your belt that you know inside out and back to front. The finance modules are a good place to aim for if you want to ensure your usefulness in any business context, but you need to make a decision in what business sector will you be applying your SAP skills in your career as the SAP modules are defined according to their business function: finance, production planning, sales and distribution, supplier management, customer relationship management, human capital management and others.

Experience of implementing SAP in any business context is useful but if you specialise in one area you are more likely to achieve some level of mastery. At the same time, having a little experience in as wide a variety of applications of SAP is useful so you can understand the needs of other team members on integrations and other projects. This will also help you if you want to work as an SAP system architect.

Because SAP is constantly being developed it is best practice to stay current in your SAP specialism by checking the new features with each new release of that module.

Think about your future career, even during periods of steady employment. Consider your own long term goals and whether they align with those of your employer. Maybe you want to become a system architect. Maybe you want to create your own independent consultancy once you have enough experience.

Business Skills

SAP practitioners have to understand the fundamentals of business, and preferably in some detail in the area that coincides with their chosen SAP module. Every SAP project is an IT project for the purpose of improving business operations and processes. It is not an end but a means to achieving something else: for example, more efficiency in operations and greater revenue for the business at the end of each quarter.

Understanding the needs of the business is part of the initial project scoping exercise that is carried out before an SAP project begins. Focussing on the needs of the business will go a long way to guaranteeing the success of the project according to the criteria of the customer.

Some skills which are common to both the business and the IT aspect of SAP projects are the SAP consultant’s ability to think abstractly. To analyse a system and to be creative in proposing alterations. Once those recommendations are accepted the SAP consultant should be able to manage a project, or the part of it which is allocated to them by scheduling milestones and managing their own time so they are achieved without unnecessary delays.

Inter-Personal Skills

One area which can sometimes be overlooked by even the best SAP consultant is making an effort to communicate with and understand the point of view of colleagues, managers, employers and customers.

Maintaining a positive attitude will always be appreciated with all of these people, but do not underestimate the benefit of actively listening. Listening will help team members to feel valued and more positive but also leverage the group’s ability to solve problems which would be beyond the power of any one individual.

Even if you are working at some distance form each other you and your team members will benefit from contact and communication. The resulting social cohesion will lead to more productive outcomes and you will be happier in your work.

Building and maintaining rapport within a team and motivating that team, are fundamental management skills and your employers will appreciate your ability to create a productive social environment.

If You Think You May Be Laid off

Sometimes businesses need restructuring because of economic circumstances beyond the control of even the executive level managers. If you are laid off it may be nothing to do with your SAP, business or inter-personal skills.

Losing your job causes a knock to your self-esteem but it does not have to be that way. There may be a change in how you view yourself and your personal career narrative, but reframe the event as an opportunity to assess your decisions and address your career goals more directly.

One of the criteria for a successful SAP consultant is adaptability: how well they can adapt to the demands of each new project, as well as how well they can react to changes in the SAP consulting market.

If you are made redundant or have just reached the end of a long contract don’t panic or let your emotions cloud your judgement at this time. You need to make some objective financial decisions so gather as much information as you can about the current SAP consulting jobs market and act according to facts not feelings.

Maintain a high degree of engagement in the business: keep good relations with your employers and co-workers as this may not be the last time you work with them. You might even be re-hired in a year’s time so don’t burn your bridges.

Even if you are currently in long-term employment always keep an eye on what other options and opportunities are out there so you can be confident that you are getting compensated for your skills appropriately. Maintain an up to date CV and make contacts among recruitment consultants who specialise in SAP.

If you want support finding a new role in the SAP ecosystem our team of experienced recruitment consultants can help you and negotiate a competitive salary on your behalf so join us at IgniteSAP.