Solving the Pharma Talent Crunch
Addressing talent shortages in today's pharmaceutical sector
Contract PharmaTo review the original article click here 31st May 2017
The pharmaceutical sector is in the midst of a turbulent and challenging period. Cuts to government spending, patent cliffs, stalled product development, and the ongoing uncertainty over healthcare in the United States have all conspired to give pharmaceutical CEOs more than a few sleepless nights.
But where there’s turbulence, there’s also opportunity. Companies that are able to innovate effectively and instill the kind of agility they need to ride out the bumps in the market will be the winners. To get there, however, they need the kind of talent it takes to turn opportunity into reality.
According to the Pharmaceutical Research and Manufacturers Association (PhRMA), the US accounts for about 35% of the global pharmaceutical market. About 850,000 people work in the US biopharmaceutical sector, supporting more than 4.4 million jobs directly and indirectly. It also pays salaries far above the national average.
Until recently, it’s not been difficult for pharmaceutical companies to entice high quality candidates with the right skills. Companies could address talent shortages by offering attractive financial packages.
But the sector is under pressure. New drugs have always faced long odds, with the average drug taking over 10 years to develop. Less than 12% of drugs that enter clinical trials result in an approved medicine. The sector has directed profits into drug discovery and R&D, resulting in job losses as the industry sheds staff to maintain profitability.
Pharma companies must find smarter ways to find, engage and retain talent. In non-scientific roles like sales and corporate management, they’re running into stiff competition from well-known brands in technology, management consulting and financial services that offer strong compensation packages themselves.
In this challenging employment market, it’s vital to develop an effective strategic workforce planning (SWP) process. SWP is the alignment of the people across an organization to its long-term commercial strategy. In other words, ensuring that the right people are in the right place at the right time.
Although still not widely used in the pharma arena, there are few industries where this strategy is more important. Based on their pipeline of products, companies must effectively plan the types of skills they need to hire for, and when they’ll need them.
Tools now exist to collect and analyze data from across the enterprise—from finance and R&D to sales and supply chain—which can enable a company to draw an accurate picture of what its workforce looks like today, and predict what it should look like one, two, five or even ten years out.
Redeploying staff where a business needs talent most is much more efficient than hiring and firing as markets ebb and flow, or drugs move in and out of the pipeline. Even relatively basic workforce analytics tools can provide a dynamic, scenario-based picture that shows the possible movement of staff up, across or even out of the business over time.
According to LinkedIn, companies with strong employer brands are able to hire employees at a cost that is more than two times lower compared to companies that don’t have a strong brand. Pharma companies must develop and communicate compelling Employee Value Propositions (EVPs) in order to appeal to high quality candidates, and to keep them engaged once they’re in the company.
While the pharmaceutical industry tends to have a lower turnover rate than others, the cost of that turnover is much higher. A study by the Center for American Progress found that the cost to replace a highly trained position can be as high as 213% of their salary. If you lose a PhD neurodegeneration and repair research director who earns $200,000 a year, you could be looking at a potential $400,000-plus cost to replace. Losing a successful sales rep can create a similar hit—not to mention the opportunity cost of losing their valuable network of contacts.
Staff retention should therefore be a top priority for every pharmaceutical company. Analytics tools can help talent managers understand why and when target individuals, both inside and outside their business, are likely to make career moves. This leads to more effective recruitment strategies and an ability to pinpoint potential areas of retention concern.
Offering employees customized career development programs, training (and cross-training) and redeployment is vital when competing for talent with other high-skill industries. By providing better and more attractive career options to staff, they’ll reduce those costly attrition rates and become more effective at finding the kind of people they need in a highly competitive talent marketplace.
The pharma sector is, by its very nature, a rigorous collector, assessor and user of data—so it shouldn’t abandon its analytical strengths when it comes to its most valuable resource: people.
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