Recruitment bounces back
pharmafile | December 8, 2003 | Feature | Business Services |Â Â recruitmentÂ
News for the pharmaceutical and biotech sectors may be pretty glum at the moment, but recruitment into both sectors is provoking excitement. "It's still very early days, too early to claim complete success," says Vernalis HR director Ted Smith, of the company merger with British Biotech.
As a recent Ernst and Young report showed, Vernalis and British Biotech are part of a dying trend, with merger and acquisition (M&A) activity within the arena dropping to its lowest level since 1998. The report also highlighted a drop of 6% in the number of employees combined with falling revenues and investment and markedly less biotech IPOs.
Mr Smith admits that "employment in the sector was hit by an exceptional number of redundancies in 2002/3 as companies reduced their spend or closed sites as money was tight.
However, he believes that "things now appear to be improving with new, smaller companies quickly absorbing those made redundant by the bigger companies" and a number of people moving to the US, where the biotech revival has been stronger than Europe.
During the merger Mr Smith says it was important to manage the changes to avoid losing key people."The key is to resolve who will have which jobs at a senior level in the organisation and clearly define the strategy for the company going forward so that everyone quickly knows their role," he explains. "Reducing the uncertainty and unproductive down-time was a priority."
The organisation quickly offered key people roles in the new company, granted staff new share options and made all-employee presentations.
Patrick Banks, chief financial officer at Inpharmatica, also acknowledges a fall in employment in biotech. He believes the reductions reflect two factors: "The poor state of the capital markets which has in turn made VCs concerned about investing in early stage research and seeking to make cash last longer.
"The other factor is the major cut-backs in large pharma investment in early stage research that result from their need to shore-up pipelines damaged by product failures and patent expiry," a trend he believes is exacerbated by the large pharma mergers which have reduced the potential market for biotech products.
Financial freeze and cash conservation
"Without the research revenues that pharma partnerships bring and other sources of capital absent, job reductions are inevitable.He argues that mergers and acquisitions in biotech are "in a large part driven by cost savings."
This belief is echoed by Neil Stafford, chairman of Medpharma, who says: "Reduced access to capital either through the private or public routes has inevitably had a serious affect on staffing numbers within the sector. Today it's about cash conservation and ensuring product portfolio deliver. The biotech business model has changed and it's all about revenues and profitability.
However, he remains upbeat about the future saying: "From what I'm hearing early 2004 could be quite interesting on the M&A front particularly if NASDAQ opens to new admissions although tying two sinking stones together won't make them swim.
Given these market changes, as an employer, Mr Stafford, perhaps surprisingly describes the current biotech recruitment market as "excellent" and the qualityof people applying for posts and calling in on spec "quite simply outstanding" which is good for the industry. He also believes that the candidates are more savvy: "Many high-calibre candidates got burnt in the boom years and they are now far more selective and ask sensible questions regarding their role in the organisation. Career growth, training and opportunity are back in vogue."
Accordingly he believes companies can best manage staff turnover "by providing a great working environment coupled with security. Security of income is critical but often difficult for many companies to provide unless they can achieve profitability in the short to medium term." Likewise Inpharmatica are currently finding the market an excellent one in which to recruit, and Mr Banks believes rationalisation, disaffection and M&A within large pharma has increased the supply of professionals in the market, with the best candidates "attracted to biotech for as long as sufficient funding is available."
The company has been very successful in recruiting scientists from overseas in the last two years, while its other strategies to address personnel shortfalls include training and M&A. However, Mr Banks also points out that to ensure evolution and growth, a company must both retain quality staff and maintain some staff turnover. This will help to keep a company's edge and introduce 'fresh' ideas and impetus.
He adds: "In a difficult job market the former objective is far easier than the latter. In our experience staff morale is the key to retention, achieved through staff incentives and being associated with successful science. The latter needs to be managed properly through active counselling." This need for staff development also proves to be key in other companies within the sector. At Vernalis, Ted Smith believes in "keeping communication at all levels in the organisation as open and honest as possible, by ensuring that people get the opportunity to learn new skills and develop in their roles and by accepting that in smaller companies people will need to move on elsewhere to gain experience."
Collaborate and outsource as needed
To introduce expertise he believes the industry makes much use of outsourcing in areas such as clinical development and specialist contract research, where robotic machinery can prove too expensive for small firms to invest in alone, and through collaborations within the industry and with academia.
Madeline Poulton, group resourcing director at Serono, explains that the company proactively manages its candidate pool by sharing talent across functional and geographical boundaries, with its on-line recruiting system, which can notify registered candidates as suitable positions come up.
She believes candidates are attracted to the company because of its "fast-moving and dynamic imageand retains staff "by offering development opportunities in terms of improving expertise" and "internal moves, both lateral and geographical."
Serono, which itself acquired Genset within the last 18 months, also has an active programme of academic collaborations, which is designed to "access expertise they do not intend developing internally."
Same rules for pharma?
In the pharma industry many of the same patterns can be seen. Simon Heaton, AstraZeneca's (AZ) head of recruitment, believes the recent spate of M&As have seen people come onto the job market that weren't previously available.
But he also thinks the way in which such a change is handled can be important because it creates unease inside organisations. He explains: "There's a variety of factors in there. Movement of people to the new organisation who don't necessarily like what the new organisation is like. They find that the new organisation is a lot bigger than they're used to and find that they've got less autonomy and want to involved in a small organisation."
He adds that AZ has been successful picking people up from Pharmacia because they didn't want to move down to Kent with Pfizer, "so even location can play a part." According to Mr Heaton, AZ has been ery successful in attracting in the representative market,and has been "absolutely inundated with applications from graduates," pulling in some "brilliant people." But when it comes to the clinical research side of the business, AZ hasn't been as lucky, unable to find the quality or quantity of scientists it needs.
Mr Heaton explains: "I think it's a volume thing, because of where we're at, we have a need for a large volume of these types of people, and I don't know if there is that volume of people around. It's just because we've got a significant pipeline and I don't know if our ask is being met by availability of people in the market." AstraZeneca isn't just concerned with finding new talent, and is committed to internal training and promotion.
Mr Heaton points to the "very, very high amount of management appointments being made through our own internal sources rather than recruiting externally" and explains that the company practices a global management programme, which constantly reviews and looks for talent within the organisation and looks "for ways to give those people stretch opportunities."
He also has high hopes for a new way of working adding: "I don't think we do enough looking outside the industry. We're very good at hiring people from GSK and hiring people from competitor organisations but not very good at looking at people with more diverse career backgrounds with a diverse industry experience. I think there's a lot of learning to be done and the industry is very poor at bringing people in with different backgrounds." Instead, he encourages managers to look at the "wider talent pool," for those with transferable skills.
He also acknowledges that AZ has the advantage of "moving people across functions," something that is only possible in larger organisations, such as his post-merger.
He says: "We've had some success moving people across different functions; moving people from medical areas into the marketing area and people from finance into sales, resulting in the staff being offered more diverse careers in a UK or a global setting. It's smaller companies that do suffer because they can't afford to send people to different countries for their development."
Abbott Laboratories UK also concentrates on staff retention. HR director Amanda White says: "I see investment in training and developing excellent leaders as key to this [retaining good people]. People leave managers not companies.
"Other retention methods include providing flexibility, making people feel valued and providing an environment where people can see possibilities for career development." She also believes that "offering flexible working practices and benefits will become increasingly important if companies are to attract high calibre people".
Simeon Saunders, who led led the commercial integration of Knoll in 2001 and is now Abbott's primary care division commercial director, also believes retention is important. He is proud of the fact that during the year after integration Abbott integrated sales force turnover was the lowest in five years.
"Clear and honest communication is the key on both sides. Decisions need to be made as quickly as possible, so that people know where they stand," he argues. "This can be difficult in situations where the legal requirements for consultation lengthen the process. Keeping essential staff is paramount, especially over the integration period and talented people must be courted early."
Personality plays its part
Strong candidates do not always turn into perfect employees, however. Pauline Dunn, Shire's HR director for Europe and the UK, believes very much in matching a candidate to a company culture.
"Shire has got a very particular culture, that not everyone does well in, a certain dynamic," she says, describing the organisation as one that gives "lots of accountability, lots of responsibility and you're allowed to get on with it.
"We recruit by assessment centre and that's a fairly rigorous proces," she continues. "It is very important for us to get the right mix in terms of the personality as well as experience." Even when quality employees come onto the market following down-sizing, Shire is still "very careful about the fit."
Accordingly the company runs staff centres and tries to "grow internally as best we can." She outlines the role of field trainer within Shire, individuals who go out and "spend a lot of time with our staff" and says the Shire way is to train by use of a recruitment and development manager. "The whole idea really of bringing someone into the organisation is to develop them on the job, and get training and development that way," she says.
Part of a winning team
Certainly, promoting from within is cheaper, but AZ 's Simon Heaton also says there's the advantage of knowing what that individual's strengths and development needs are. "Our aim is to try and grow as much of our talent as possible and we've introduced the leadership college, and places of development for our people to develop internally."
As well as the training and development opportunities, Mr Heaton also argues that AZ also offers a flexible reward strategy, performance bonuses, recognition through the sales academy and other incentive schemes plus global career opportunities and perhaps most importantly quality of products that "makes AZ a great place to be at the moment."
Despite companies like AZ putting these policies in place there is no room to be complacent within either the biotech or pharma industries as the biggest mistake is treading water.
Mr Heaton sums up the importance of recruitment when he says: "We're never sitting comfortably thinking we've done that now, we've got the best policies. We just can't sit back and relax ever."
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