Turn your people into your competitive advantage
pharmafile | April 27, 2010 | Feature | Business Services | careers voice, rsa, talking careers
Nick Stephens, chief executive of RSA, outlines and analyses the major HR and people management issues global life sciences executives’ are focusing on to deal with their rapidly changing markets.
He introduces RSA’s new Talent Lifecycle Services, which offers strategic consultancy to life sciences firms looking to manage their talent and identify the leadership skills and competencies necessary to remain competitive in the decade ahead.
Planning for the future is crucial at any time, but particularly when the market has changed and contracted. After 18 months of downsizing, headcount reviews, and hiring freezes, have you stopped to consider what your organisation will need to look like next year or in five years time so that it continues to thrive and remain competitive? In RSA’s recent talent management survey, nearly 400 leading life sciences senior executives and HR directors answered this very question, and what they said may surprise you.
Retaining talent during downsizing
As the global life sciences industry entered 2010 with cautious optimism, nine out of ten executives we surveyed identified talent management as a key strategic priority for this year. Following the last 18 months of recession, it is not surprising that businesses are beginning to look beyond short-term cost cuttings and once again focus on longer-term routes to profit. However, the results of our survey indicate that bouncing back from last year’s recruitment freezes and downsizing will be more challenging than some currently imagine.
Many executives we surveyed said they did not consider the company’s changing skills requirements when reducing headcount last year: 76% experienced downsizing at least once in the last 18 months, and of these, over a quarter (27%) identified employees for redundancy without first assessing them against the organisation’s future demand for skills. What’s more, 62% did not use formal talent assessment exercises to decide which employees would face redundancy or reduced working hours. This shows many businesses still approach headcount reductions virtually blindfolded – without a clear understanding of the skills or talent that will be lost as a result.
For a segment of the life sciences sector, the downturn seems to have signalled a return to this short-term approach to talent management. The problem is illustrated by senior managers in our survey, who commented about their most recent downsizing: “It was more a case of looking at how much revenue individuals and their functions/roles were adding to the business,” and “eliminating a position leads automatically to that employee’s departure, without regard to his/her skills or performance potential.”
These statements may represent the extreme end of the spectrum, but most executives are very aware of the risks of downsizing without a clear understanding of their future skills needs and the skill potential of existing staff. 69% of the senior managers we spoke to are nervous that they will lose valuable skill sets and competencies when their business makes redundancies. However, the sector must find ways to balance immediate pressure to keep costs down with the long-term skills needed to sustain competitive advantage. For such a rapidly evolving market, this continual pressure to up-skill is even more acute for life sciences companies, and is put at risk by short-term headcount reviews.
Preparing for an uncertain future
Following downsizing, the life sciences industry will face continued uncertainty caused by mega-mergers, shrinking R&D budgets and market access challenges. Each of these issues have major implications on future staffing demands, and some could even threaten the industry’s traditional business model. So as the sector looks to cope with this changing market environment, many businesses are doing so with depleted staff or under-resourced R&D department.
As executives prepare for this uncertain future, it is clear that they will have to work more closely with their HR teams to retain talent and maintain competitive advantage for the long-term. Asked to identify four key areas where HR and line managers need to improve in order to retain competitive advantage, executives identified:
• Leadership development (78%)
• High potential employee identification & assessment (67%)
• Performance management (60%)
• Succession planning (60%)
Executives’ comments further indicate their desire for a more strategic approach to people management. “Continuous training”, “active and focused management of top talent”, and “a complete focus on personal development, including succession planning and talent management” offer a representative mix of what senior managers said they need in order to remain competitive when faced with increased outsourcing, new market opportunities, and evolving models for delivering treatment to patients.
71% of the senior managers said that over the next five years they will rely on HR teams to redefine long-term skills and resourcing needs. However, of these respondents, 76% are not convinced their HR teams understand the businesses’ medium- and long-term strategies, or staffing needs. Having no knowledge of the Board’s strategic plan, it seems difficult for HR teams to develop job descriptions and plan future resourcing needs based on skill requirements that do not exist yet.
The true value of talent retention
More than 70% of the executives we interviewed have found that senior management vacancies can take six months or longer to fill, and half confirmed that their recruitment typically costs the organisation of 20-30% plus of the position’s annual salary. The immediate cost implications are one thing, but missing a vital Clinical Director to oversee the successful delivery of a trial could amount to millions in lost revenue opportunities if the drug then fails to make it to market.
Recruiting outside leaders is necessary and often valuable for any business, but successful life sciences firms focus on strong internal talent management programmes. Despite the challenges of finding the right external candidate for a leadership role, in four out of ten life sciences businesses we spoke to, less than 20% of their senior managers were appointed via internal promotion. Bearing in mind the cost of recruitment, there is an opportunity to bring more senior leaders up ‘through the ranks’. In reality this won’t happen on its own, it hinges on having processes in place to identify and foster existing talent within the organisation.
Leadership development was identified by an overwhelming 78% of respondents as key to success in the life sciences industry over the next decade. Programmes that identify and assess high potential talent were nearly as popular, with 67% of respondents citing them as critical to long-term success.
When it comes to formal succession planning, however, 55% organisations did not have a process in place. That means a significant segment of the industry is unintentionally losing competitive advantage by failing to nurture future leaders and technical experts from within.
Building bridges to the boardroom
Today the sector‘s leading businesses are looking beyond the downturn to identify the strategies and leadership styles they will need internally to maximise opportunities post-recession. But do you have the time or internal resource to do this effectively?
Predicting a business’s future skills requirements is no easy feat. When building a post-recession leadership team and preparing for a new competitive climate, organisations cannot afford to rely on outdated job roles and talent assessment techniques that risk losing top talent. Or worse, leave your organisation without the right range of skills to fully exploit new market opportunities.
Talent Lifecycle Services
RSA is launching its Talent Lifecycle Services to enable industry professionals to get the balance right between growth, headcount and cost.
A bespoke consulting and assessment offering, Talent Lifecycle Services will help life sciences organisations achieve competitive advantage by strategically managing talent and leadership to support their long-term growth plans. As the research indicates, leadership development, high potential employee identification & assessment, performance management, and succession planning are all areas that require closer alignment between the board’s vision and the HR team’s techniques and processes. RSA’s new service will help life sciences firms strengthen these areas by developing a bespoke and holistic approach to attracting, developing and retaining their people.
Our consultants have 29 years’ of experience partnering with life sciences companies to find and develop great leaders. Teaming with industry-leading occupational psychologists and talent management consultants, RSA’s offering will help businesses across the life sciences value chain to carry out strategic organisational audits and in-depth resource assessments that will confirm individual priority areas for sustaining competitive advantage.
Bridging the strategic with the practical, each element of RSA’s Talent Lifecycle Services is then specifically tailored to address the business’s specific skill needs – enabling companies to work alongside experienced colleagues to develop the best bespoke strategy for identifying skills, assessing employees, and managing talent.
Conclusion
Leadership assessment, talent retention and the cost of recruiting senior executives were all identified as pressure points for today’s life sciences executives.
RSA’s Talent Lifecycle Services will help businesses develop strategically-aligned programmes to ensure staffing decisions are made for a company’s long-term growth.
As our study of senior managers confirmed, in today’s highly competitive global drugs market, it is clear that well-managed talent is a key success factor.
The RSA offering will verify the link between the boardroom and their HR partners – helping clients to focus on obtaining the maximum value from their human resource as they grow their business over the next five to ten years.”
To talk to Nick in more detail about RSA’s Talent Lifecycle Services call or email him on + 44 (0)1707 228606 or nick@theRSAgroup.com. Alternately, visit www.theRSAgroup.com/talent.
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