Oct 9, 2024
Market Overview: The ‘Thinking Phase’
A recurring theme in Q1 2025 is what we’ve come to call the “thinking phase.” Many organizations are in a holding pattern, awaiting clearer economic signals before committing to large-scale SAP projects. This is not to say there’s no movement—industries like mining are actively advancing SAP programs. However, in most sectors, uncertainty prevails as clients weigh the best path forward for their SAP S/4HANA migration, whether through Brownfield, Bluefield, or Greenfield approaches.
Although some companies face frustration with backlogs and budget constraints, there’s a growing sense of confidence that 2025 will be a pivotal year for project approvals. Businesses are increasingly requesting RFIs (Request for Information), indicating a willingness to invest resources and time, even if final decisions take longer than usual.
The Impact on the SAP Market: A Welcome Correction
The current SAP market has shifted in favor of clients, a correction that many anticipated after the boom of 2022. During that period, salary inflation and resource movement reached unsustainable levels. Now, organizations are scrutinizing every cost decision, and hiring processes are more prolonged. Some SAP vacancies are taking up to six months to finalize, reflecting the more deliberate pace of the market.
However, this correction is not necessarily a negative development. It has created a more sustainable landscape for both clients and candidates, especially those with niche skills. The increased availability of senior SAP professionals presents an opportunity for businesses with the resources to hire now, as competition for top talent may intensify in the coming months.
Contracting Rates: A Rebound in Niche Skills
Contracting rates have seen a 12.8% increase from Q4 2024, following a dip in the previous year. This rebound is driven primarily by niche, hands-on contracting requirements, which remain hard to find. However, senior candidates are showing more flexibility in their rates, reflecting the increased competition for jobs.
Client Activity: The Pathway to S/4HANA
In Q1, the Precision Sourcing team attended over 300 client visits, where a clear narrative emerged: while clients are convinced that projects will eventually materialize, the specific nature and timing of these initiatives remain uncertain. A key discussion point is the best approach to S/4HANA, with many organizations debating between Brownfield, Bluefield, and Greenfield implementations. This uncertainty, coupled with economic pressures, is causing a cautious approach to project approval.
Tips for Candidates
- Be patient and proactive
- Consider short-term contracts
- Prepare thoroughly for interviews
- Partner with a trusted recruiter
Tips for Clients
- Hire now if possible
- Be decisive
- Consider contractors for short-term needs
Conclusion: Seize the Moment – Position Yourself for Success in 2025
While the SAP market remains in a state of flux, there is growing optimism for 2025. The influx of senior talent and the “thinking phase” among clients suggest that, while patience is required, those who act swiftly will be well-positioned to capitalize on the opportunities ahead. We’ll be watching closely to see how the market evolves in Q2 and beyond.
For a deeper dive into the latest market trends and insights, click below to read the full Q1 2025 SAP Market Report and stay ahead of the curve!
