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Author's profile photo Jon Reed

SAP Salary Outlook in 2010: Panaya SAP Salary Survey Analysis

I have been studying the SAP skills marketplace since 1995, but have never had the chance to help organize a comprehensive survey on SAP salaries – until now! Recently, I collaborated with Panaya on their SAP Salary Survey 2010. The results of that survey are now out, and show some “cautious optimism” for SAP salaries in 2010. The survey also brought to light a number of revealing stats pertaining to SAP salaries by gender and education level.

In this blog post, I’ll analyze some of the significant survey results and also share a few of the graphics that bring the data to life. This was my first SCN post with screen shots – hopefully it looks all right! (Before I go further, you can get Panaya’s full 18 page SAP salary survey for yourself with a (free) sign up form). A couple of times, the results were surprising enough that I’m not sure what to make of them either, so feel free to comment on this post!

Setting the stage: The survey compiled 430 responses, 71 percent from SAP customers and 29 percent from systems integrators. Almost half (43%) of the responses were from North America, with Europe providing 37% and the rest of the world 20%. This is a pretty diverse group of results, and 430 is a decent sample size to work with. With that context in mind, let’s check out some of the most interesting results from the survey.

Survey result: “SAP professionals working with ERP 6.0 earn 5 -9% more than respondents working with other versions.”

My take:  This is not a surprise – salaries and rates are a function of supply and demand, and there are less experienced ERP 6.0 people than those working on previous releases. I will admit that I’m not 100 percent certain why the 4.7 pay rates came in lower than 4.6, but I’d say two things: first, the discrepancy between 4.6 and 4.7 rates is not large, and also, we do see a phenomenon sometimes in IT where those professionals who remain on older releases after others have moved on can see a temporary bump in pay. So lingering on 4.6 projects can may pay off for a short period of time for some SAP professionals, but in the long run, it’s better to pursue the most advanced release exposure rather than staying on older releases for rate reasons. Call it the lesson of the Cobol programmer.

We know that in general education levels affect salaries. But how does this work in the SAP world, where, in theory, you can go pretty far without a degree if you get the right hands on skills? As it turns out:


My take: I’m not surprised to see that MBAs in general are the most powerful degree in the SAP field when it comes to salary. That may be a function of position – those survey respondents with executive saleries (like SAP Directors) are more likely to have MBAs than hands-on programmers. So before you go seeking an MBA degree for a salary bump, keep in mind that you’ll probably also need to be willing to climb the management “food chain” in order to see that pay raise!

Also: don’t assume that because those taking management classes in this survey are making higher salaries, that adding a management class from a local community college will do the same for you. I would guess, if we peeled back these results, that management classes in this context reflect a general climb in management level and management-level pay.

If anyone is surprised to see doctorate-level degrees having less impact on salary, don’t be! I have been involved in SAP pay assessments since 1995, and I can tell you that the SAP field in general does not really have a clear place, salary wise, for doctorate-level achievements. This is not to say that such degrees are irrelevant to SAP work, but the connection from a pay and business relevance standpoint has never been super clear. This survey bears that out.

Now, onto some controversial and important data: the SAP salary breakdown by gender:

My take: It was discouraging to see that as women in this survey advance in the SAP field, the pay discrepancy seems to increase. Things start out well, but the pay does not seem to keep pace with male colleagues as careers progress. This is only speculation, but I am assuming that part fo the issue here is that women are still facing more roadblocks advancing within the field, so the deeper the experience level, the more the gap in pay kicks in due to lack of executive advancement. But please note, this is my speculation. What is NOT speculation is that this survey pointed to some SAP gender pay discrepancies.

But there’s another interesting factor – the gender pay differences varied greatly by region:

Perhaps one of the messages here is that the “rest of the world” has a thing or two to teach North America and Europe about gender pay. But here, I think we need to be cautious and say that to truly get a handle on SAP gender pay variations across the world, more research and a larger survey sample size would be needed. I would view this survey not as the final word on this issue, but as an indicator that more research is needed. I’m sure no one is surprised that the gender gap in SAP pay is not resolved, but before the women in SAP march on Walldorf, or for that matter before we all march on Walldorf, it’s good to remember these issues are hardly unique to SAP.

In fact, as Panaya points out in the survey results, the gender pay gap in their SAP survey results is actually less than the overall averages tracked by the Organisation for Economic Co-operation and Development (OECD):

“Women [in this survey] earn 8-12% less than men in Europe and North America, while salaries are basically the same for both genders in the ‘Rest of the World.’ These gaps are lower than the gender gap reported for the general working population in the 17 OECD countries, which was an average of 17.6% in the latest available survey.”

Good food for thought/action at any rate!

Finally, the survey has some good information on how SAP professionals are viewing their skills development in 2010. Since this post is already pretty long, I’ll save some of this information for a future post on one of my blogs, but here’s a survey graphic that breaks down some of the skills goals by SAP role:


Obviously, the Basis and development role are distinct enough that it would be useful to pull out more data on how the two roles view their skills outlook, I”ll see what I can do to pull that out, either on this survey or in a future survey of my own. Nohuge skills surprises here, with upgrade and BI skills topping the list, and Solution Manager making its presence felt. There is more skills advice in the survey I’ll cover in detail at another point.

Meantime, I would be remiss not to note that the impact of the economic downturn was clearly reflected in the survey results, not the least of which was the indication that SAP professionals are being asked to take on more duties without necessarily seeing a pay bump.

Here’s how Panaya summarized this aspect of the survey:

“The economic downturn during 2008-2009 seemed to have a number of impacts on the respondents’ jobs.

1. The most common change noted by the respondents is more responsibility. In many cases, this is cited as a result of the need to do more with fewer resources.

2. Competition on jobs has intensified, so increases in responsibilities, hours, and skills have not necessarily resulted in higher compensation.

3. Companies are putting greater emphasis on better utilizing their existing systems and resources, more efficient processes, and tighter controls over system changes.”

I would close by saying that point number three looks like a fruitful one for skills development (can you help SAP users make their systems more efficient, compliant, sustainable – the “greening of SAP skills.”) Oh, and what about that “cautious optimism” I referred to in the opening paragraph? There are several indications in the survey along those lines, but one I can mention in closing is that over half the respondents (52%) are expecting an increase in salary in 2010. Let’s hope they are correct!

Well, there’s a lot more in the survey I didn’t get a chance to cover here, including more detail on bonuses, current pay and 2010 expectations, as well as differences in pay between end customers and implementation partners, but you can check that out at your leisure. Meantime, I hope this blog post shed some light on some key SAP pay questions. Thanks to Panaya for funding this useful survey.

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      Author's profile photo Former Member
      Former Member
      Thanks Jon and Panaya for this info.

      While I was kind of aware that women tend to make less money compared to men in SAP, I did not realize they start at a significant higher salary than men. So then what would be the reason to not keep that margin? I guess gender bias in a male dominated organization is the number one reason, but I also know several women who take mid-career breaks to start a family, and this could be the reason that men catch up and eventually overtake. Also - as we go up the chain, it becomes harder to catch up with pay disparity - so probably missing a few years in between is costing them dearly. That is such a terrible price to pay.

      Doctoral degrees and MBA makes an interesting point. In SAP labs, there are plenty of PhD holders and I wonder if their salaries follow the trend of this survey or not. MBA is a definite plus. It helps get you more $$, and also gives you an edge of promotions. However, your school matters a lot.

      I think it is the sample size that skewed the ERP 6.0 salaries - This trend would make sense to me in contractor pay, but not in salaried employees. I honestly don't think anyone drawing a salary got a big boost because their company went to ERP 6.0, and I know for a fact that SI companies don't give a premium salary to an employee because he is working on a 6.0 project. However, if contractor pay is merged into this - then it would make perfect sense. maybe Jon can clarify.

      Apart from generic "architecture" - I did not see any specific mention of SOA, BPM or BPX for that matter. Is that because the questions in the survey didn't specify those or because no one really cared for them last year?

      Author's profile photo Jon Reed
      Jon Reed
      Blog Post Author
      Vijay, thanks for some good comments there. I'll clarify a few answers for you soon, but since you asked some hard (and good) questions, give me a few days on this.
      Author's profile photo Former Member
      Former Member
      Very well compiled, Jon. It serves as a great benchmark to future salary comparisons for SAP Consultants.
      Will it be possible to debate on the predictive compensation benefits one can expects if one is absolutely new to SAP (0 to 1 years experience)
      As we all know, an SAP career is one of the rare breeds that openly permits people with very strong functional domain experience in a non SAP environment to switch careers. So when the switch is made these so called individuals have no experience with SAP. It will be great if this can be touched upon in your next blog or may be in my next podcast with you.

      Kudos to your efforts!

      Author's profile photo Jon Reed
      Jon Reed
      Blog Post Author
      Thanks Muhammed. I find there is always interest from those new to the SAP field in terms of what kinds of salaries they can expect if they break into SAP. These are difficult questions to answer right now, because the SAP field as it stands currently is much more friendly to experienced SAP folks than it is to so-called "freshers."

      I get asked for this kind of information frequently. I tend to discourage the question, not because it isn't a valid one, but because I think those who enter the SAP field with money as their primary motivation are in for a big disappointment. Not because there aren't some good rates out there from time to time, but because success in a field as challenging as SAP requires a sustained passion in the subject. SAP still has a reputation as a walk along a gold money path, and I do my best to change that perception. 🙂

      Having said that, I'll be glad to see if I can compile more information on this topic and share it. Maybe we can even talk about it on one of YOUR podcasts. 🙂

      - Jon

      Author's profile photo Former Member
      Former Member
      Vijay:  I liked your fair and interesting analysis of the male-female pay discrepancies. There are so many reasons that play in. Being a woman, I wonder why we get paid more initially? That seems odd.
      Also, as many studies show that groups with all men are less effective than groups that include a mix of genders, hopefully we will see more women in leadership positions, maybe even on the board, in the future. That would help average out the pay differences :-).
      Author's profile photo Martin English
      Martin English
      I'd like to take up your point that groups with all men are less effective than groups that include a mix of genders.

      I have found that homogeneous groups tend to be less effective at pretty much anything except rote work.  The wider the background(s) of the group, the greater the scope for creativity and innovation.  At a more personal level, this makes the group more interesting to work with as well.

      Author's profile photo Jon Reed
      Jon Reed
      Blog Post Author
      Vijay, thanks for your comments. Sorry for the delay responding, you kept me on my toes and wanted to dig into your comments when I had time to reflect.

      You raised several points. "So then what would be the reason to not keep that margin (as women advance)?" You offered one possibility in terms of mid-career breaks, but I believe the reason points back to the one I offered in the post - that women still have a tougher time climbing into upper management, and this skews the salary averages at the higher levels. However, this survey doesn't provide a definitive answer to this question.

      "In SAP labs, there are plenty of PhD holders and I wonder if their salaries follow the trend of this survey or not." Perhaps one of them will chime in here. 🙂 My assessment would be that the more relevant the PhD, the more it will be reflected in salary. Since PhDs are rarely required for higher level SAP work, it would make sense that a doctorate in another field would have little impact on salary. However, for advanced work where PhDs are relevant, such as SAP Labs, perhaps the salary levels would be higher in that cases.

      "MBA is a definite plus. It helps get you more $$, and also gives you an edge of promotions. However, your school matters a lot." Agreed on all counts. However, I do think that the real value of an MBA is the edge in promotions you refer to, or to put it another way, an MBA becomes almost mandatory of your SAP career goals involve moving into executive level positions with large companies. But if you are clear that you want to remain in a hands-on capacity, or perhaps start your own firm, an MBA has less impact. Still, it is there, and is much more relevant to salary than most other advanced degrees.

      Your last two questions require a bit of double checking for me on the back end of the survey. That is in the works now.



      Author's profile photo Former Member
      Former Member
      Thanks fo responding promptly, Jon.

      I agree that women generally have a hard time breaking into upper management in a male dominated industry. However, I thought maybe not many people in upper management would have responded to this particular survey to affect it like this. That is why I was looking for an alternate explanation.

      The PhD thing fascinates me - many of the PhDs I know of in labs are not majors in computer science or related disciplines. One is in fact a biology major, and I keep teasing him about that :). I have forwarded this blog link to a few of them - but not sure if they will comment.
      I think the thought process is that a PhD would have command over a disciplined analytical process to solve problems, and that this can be extended to computing even if the person majored in something else. Of course, I am just guessing here.

      Maybe SCN career center can sponsor a more extensive survey on this topic? I am sure this topic is of wide interest to a good majority of SCN readers.

      Author's profile photo Former Member
      Former Member
      Hi Vijay,
      It's great to see a lively discussion around careers. We launched the Career Center just last August, and we are still gathering feedback on what career topics SCN members are interested in, so this is helpful. I would image that if we do a study it would probably be pretty broad in scope, but I agree with you that the PhD dynamic in the Panaya survey is pretty intriguing.  Best,
      Author's profile photo Jon Reed
      Jon Reed
      Blog Post Author

      Thanks for your patience on the final answers to your remaining questions - I needed to do some back-checking on a couple of them since you asked such good ones.

      In terms of your comment about ERP 6.0 experience impacting salaries, I'm not surprised to learn that this is the case. Fundamentally all IT and ERP salaries are impacted by skills supply and demand. Given that there are fewer SAP professionals that have ERP 6.0 skills, I'm not surprised to learn that they skills command a bit of a premium. Of course, some companies will handle this based on skills premiums that are added to the base compensation.

      However, I do think your point is well taken that most people who obtain ERP 6.0 exposure while working for an employer won't receive a raise from within for obtaining their skills. But I like their chances on the open market better with ERP 6.0 skills, both in terms of winning an interview and maximizing their salary. I'm not surprised that these survey findings supported that. To address your question on the hourly contractor element, I checked with Panaya and the amount of contractors in the survey was negligible. There were, however, a fair amount of full time consultants who took the survey, and those numbers were 29% of survey respondents, as noted in Figure 1.

      As for this question:

      "Apart from generic "architecture" - I did not see any specific mention of SOA, BPM or BPX for that matter. Is that because the questions in the survey didn't specify those or because no one really cared for them last year?"

      In this case, neither question was really in the final skills questions respondents answered. While on the technical side, SOA was theoretically included in the Enterprise Architecture skills you can see in the graphic directly above, BPM and BPX skills were not on the final functional user survey. I agree that it would have been interesting to ask about those types of skills. You and I have discussed the BPM/BPX skill emergence quite a lot, and I think we both agree on its importance but have questions about how these skills manifest into dedicated project roles.

      I think that's the same for many functional SAP professionals - strong interest in these skills but perhaps trailing areas like BI where there is more immediate project demand. These will be good topics to explore further, in fact, if you want to send me a short list of skills you'd like me to poll users about, I'll put up a reader poll on right away to gauge interest.

      Author's profile photo Former Member
      Former Member
      Thanks for clarifying Jon. Lets chat a little offline about the skills poll. I love the idea - just need a little time to organize my thoughts around it.
      Author's profile photo Clinton Jones
      Clinton Jones
      I found this a fascinating survey and wonder how it compares to surveys conducted by others like which are admittedly done on a company by company basis
      Author's profile photo Somnath Manna
      Somnath Manna
      Thanks for sharing highlights of the SAP Salary survey in the blog. I have not gone through the full survey but feel the results represent a skew. Considering close to half of the respondents are from North American market, is the salary for different experience levels for consultants / employees working in North America (US and Canada)? What about Offshore resources - a significant amount of SAP work (both functional, technical) in US originates or actually gets done from Offshore Development Centers at much lower median salaries even when converted in dollar terms. The same might not be the case in Europe where still most of the work is done onshore / near shore which results in a much lesser salary skew. I assume European salaries were converted suitably to USD terms. As for rest of world (assuming Asia-Pacific region) the salary can vary quite a bit due to cost of living differences and multiple currencies.
      Another way of breaking the salary would be the nature of work not just by traditional technical and functional disciplines but Testing and Application Helpdesk which are two key aspects of Large-scale Implementation / Rollout and Support projects respectively.
      Author's profile photo Jon Reed
      Jon Reed
      Blog Post Author
      Somnath, thanks for your comment. I don't disagree that offshoring can impact salaries and make "apples to apples" comparisons difficult. This has proven to be a problem in all kinds of IT salary surveys, including a much bigger one done by where I felt the ABAP salaries came out very high.

      The way I look at this kind of exercise is that is sheds some light and raises some important questions, and warrants further research. Some of the information, such as which skill areas respondents are looking to move into, or the differences in salary between SIs and end users (which are in the survey) are useful to note. The educational levels and SAP salaries is not something I had seen before in other surveys either.

      The kind of comprehensive survey you are talking about, which would somehow weed out the impact of the offhsoring on the reported results, is a little beyond the current JonERP scope, but if I can do this down the line I will definitely publish it and share it.

      Author's profile photo Former Member
      Former Member
      The gender survery is intesting
      i think the heigher salary of women of 1-3 year because of their Attractive age and as their experience goes heigh salary goes down becasue of less Attractive age.
      Author's profile photo Former Member
      Former Member
      Nisar, while I completely respect your right to voice your opinion - I am very disappointed that you hold such an opinion. SCN team is rather liberal - in a lot of other communities, your comment might have been censored.

      Author's profile photo Jon Reed
      Jon Reed
      Blog Post Author
      Vijay, I would tend to agree with you. This is an open forum which is good, but I appreciate you pointing out that it's valid for all of us to rethink our opinions, especially when there is ample data to support us rethinking our positions.
      Author's profile photo Former Member
      Former Member
      Nisar, how do you define "attractive"? Are you actually talking about physical appearance or how are women less attractive with age? I am laughing, as I think Jon and I must have misinterpreted what you said.
      Author's profile photo Jim Spath
      Jim Spath
      Google "diversity training" and "sensitivity".


      Author's profile photo Former Member
      Former Member
      Thanks for sharing your analysis, Jon! I went through the survey to read up on the disparity in pay between men and women. The survey serves as a reminder for women to be pro-active in managing their careers and to always negotiate their salaries. I'm curious if the gap in pay between experienced men and women is the same, higher or lower than it was 5, 10, 15 years ago. The survey did not say. It did say, however, that the gap in SAP related employmnet is less than in other fields.  "These gaps are lower than the gender gap reported for the general working population in the 17 OECD countries, which was an average of 17.6% in the latest available survey."
      Author's profile photo Jon Reed
      Jon Reed
      Blog Post Author
      Thanks Claudine. I was careful to note in the analysis your point about the OECD disparities and how SAP salary disparities in this survey are less in comparison. A true study of the historical SAP gender pay comparisons would be interesting, and was beyond the scope of this project. I thought what we came out with were talking points that these gender pay issues remain, and deserve further examination, ideally in a more comprehensive manner.