The pharma industry looks stable but remains confounded with several challenges. It takes 8-10 years and about US $ 800 million – US $ 1000 million for developing new drug. Investor expectations, regulatory barriers and patent expiration have its own impact. Governments around are demanding extensive clinical trials, reduction in health care expenses and this affects investments in product development. Moreover the emergence of low cost providers and pressures of demand have surged attrition and advent of generic drugs. Indeed the pharmaceutical industry is a high risk and high return industry and grappling with innumerable challenges. But HR can play a stellar role in reducing this pain.
The current valuations would increase consolidation, acquisition and provide necessary impetus to sales and R&D. Establishments of global delivery and shared service centers reduces cost and provides instant access to global talent. The business processes in local subsidiaries are firmly entrenched and properly aligned with parent companies but outsourcing requires more fillip. To ease integration and enhance employer branding, HR has to focus on developing strong corporate culture.
Instead of pursuing higher education, students join high paying BPO’s. The shortage of skills in R&D, biotech, regulatory services, patents, formulation and delivery calls for establishing academic alliances and continuous training. To hire researchers, companies must institute best in class practice, redesign compensation for fresh post graduates and importantly equip laboratories with latest technology. Pharma Companies have unique specialization and therefore HR must facilitate regular interactions between line managers and placement consultants to reduce communication barriers in selection process. Hiring people from different domain and industries, especially in sales and support functions will spur creativity.
Leaders are known for their technical accomplishments and rose through ranks. Leadership development coupled with challenging assignments and mandatory job rotation for high potential /performers after 18- 24 months would groom people for business leadership and increase loyalty. Technical professionals display greater loyalty and affiliation to external technical communities or groups. They require independence, hate being controlled and detest administrative tasks. Leaders have to lead with caution and compassion. HR along with senior leaders must create small-company environment, encourage informal teams, promote flexible working, reduce hierarchies and introduce broad banding to reduce attrition.
Automation encourages knowledge management, stifles bureaucracy and eases communication. Investments in latest IT and project management software improves productivity, control, quality, security, risk and compliance in R&D projects.
Sales decisions should be decentralized and strategies must evolve from zonal offices. This promotes ownership, accountability and speedy execution. R&D has to be part of business decision-making and sales events. Apparently Pharma relies on seller centric marketing tools rather than buyer centric communication. In rural areas, franchising would pave way for local marketing agencies. To be an effective business partner, HR must increase its interaction with these agencies.
OTC (Over the Counter) drugs would enhance branding, maximizes revenues but success depends on local field force, innovative marketing campaigns and emulating best practices from retail and FMCG. Compliance regulations impede sales force from entertaining doctors. Undoubtedly performance metrics and training has to focus on compliance and consultative selling - encouraging field force to study consumer behaviour and increase awareness about drugs.
With changes in strategies, job descriptions often end up having shelf life. Companies can effectively manage expectations by retaining designations and making changes in job descriptions. HR and Line managers must increase transparency, provide realistic preview of job and share employment policies so as to allow candidates to take informed decision. Fancy designations do motivate, but technical staff likes to be addressed as Doctors / Principal Scientist and need access to senior leadership. HR and line managers have to regularly review business targets and incentive plans.
To conclude, in knowledge economy, investment in ideas are critical than economies of scale and therefore unconventional HR practice becomes a decisive differentiator.
Subscribe to:
Post Comments (Atom)
I see a striking similarity with IT industry. Most of the challenges that you have mentioned here are applicable to Independent Software vendors also. We can extend this every people intensive industry, where expertise / innovation is the key to success.
ReplyDeleteIf you read the book called "the Halo Effect" you will perhaps realize that there is no difference in various industries, the growth path and the challenges are similar. What makes Pharma dicey is that it deals with patients and the safety is of primary concern.
ReplyDeleteHowever, I also believe that since biology is so poorly understood, which idea would benefit most to the patients is hard to figure out. The success rate of ideas is perhaps very poor which makes this industry quite risky.