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Structural Stability

The changing pharma landscape is driving a shift in staffing requirements and flexible short-term solutions are being sought to support in-house teams

illustration-of-bicycle Exposure is the watchword of the moment. Avoiding risk, cutting costs and providing stability are the goals. In healthcare marketing, talk is of a changing business model, which suggests there is no escaping the effects of the current squeeze on jobs and careers.

Sales operations are being restructured, which has inevitable effects on marketing.

A foremost driver of change in sales activities is the increasingly centralised control exerted through the NHS to reduce the drugs bill. This has the effect of distilling the number and type of key decision makers in the buying process.

Competition is intensifying too in many therapeutic areas, furnishing prescribers with a broader array of options for any particular class. Given current patent regulations and with generic substitution on the horizon, marketing is under pressure to reach peak sales as soon as possible. This challenge is made trickier in the face of saleforce cuts due to M&A and other strategic restructuring or streamlining.

The biggest traditional sales target, the primary care GP prescriber, has precious little time to meet and hear from reps armed with sales aids, objection handlers and the usual patter, no matter how well supported by evidence. It's a workload and work ethic change: prescribers now share their commissioning influence, while most find it increasingly easy to access objective information at their convenience online.

The efforts firms are making to adjust to these changes are affecting their staffing structures. Some companies are choosing to downsize their 'fixed skill' in-house personnel in favour of an 'up– and down-scalable' pool of multi-talented players, either with broader sales/marketing competencies, or niche experts. These individuals offer a depth of knowledge that lets them 'own' a particular channel or revenue stream.

The general consensus is the number and type of jobs, definition of roles and over-arching structure in sales and marketing departments will remain in a state of relative flux for at least the next 12 to 48 months.

Employees seeking change
In early March, Alan Deadly Dedicoat announced on the BBC Radio Two News that despite the general trend during this crunch for workers to knuckle down and seek stability, recruitment agencies had reported a rise in the number of people seeking to change employer and/or the way they work.

Tim Ewbank, chief operating officer at interim management and recruitment consultancy, the Harten Group, believes this is also true of the pharma sales and marketing sector. While it has become more difficult to lure some candidates away from the relative security of their present role, the overall pool of talent that is actively looking to progress has expanded.

"We have definitely noticed an increase in people looking for assignments or new roles, and companies seem to be harnessing the benefits of interims rather than recruiting permanent staff. In some cases, this is a short-to-medium-term solution as a company undergoes reorganisation, and consequently does not want to take on new staff before the new structure and roles are finalised."

He notes, "Using interim expertise offers several benefits to pharma in the current economic climate, such as control of overheads, cost-effective use of specialist knowledge without time spent on internal/management issues, compliance with human resources restrictions on headcount, and no legal/financial implications in terms of ending a staffing contract should a project be called to a halt."

The situation as it is, the Harten Group expects the increased demand for these "more flexible staffing solutions" to continue.

Working in partnership
Chris Phillips, managing director at CHASE, a contract sales and specialist recruitment services agency, says that replacing a full headcount field force with a more flexible, contract-based resource could serve "all pharmaceutical businesses, large and small" very well when the balance sheet is under pressure.

"The days of the 1–2–3 product detail are truly gone, with broader skills, communications and a deep understanding of customer issues replacing them." The main challenge currently engaging staff at CHASE is finding quality, experienced sales people with the right mix of skills to fit with the new climate of account management, he notes.

In response to these fresh demands, the agency has set up two bespoke service areas: CHASEflex, providing sales teams that meet strategic business objectives, and CHASEVM, a vacancy management solution for individuals on short- or longer-term contracts to cover sickness, maternity or secondments.

Phillips believes, however, that the credit crunch is not largely responsible for the changes in pharmaceutical and healthcare recruitment activity. "In my opinion, the changes in the pharmaceutical industry tend to date back to before this recession. The sector had its own adjustments before the economy did, resulting in some down-sizing and a shift in emphasis from primary to secondary care."

In which case, could contract supply and flexible specialist staffing become the preferred option for pharma, rather than the occasional alternative? Perhaps, as companies develop the account management model. Attempting too to reduce exposure to some of the universal consequences of global currency inertia, peddlers of recruitment solutions will evolve from simple outsourced providers to expert partners in department/company structure remodelling.

One protagonist of this viewpoint is Sue Birch, general manager and founder of the Vacancy Management Company (VMC), set up in 2001 with the aim of "working with companies as a partner and looking at all of their issues". To this end, the firm spends a lot of its energy serving on a sole supplier basis.

"It's not just about sending a load of CVs out in response to a vacancy coming in. To us, vacancy management is working in a partnership, looking at our customer's business as a whole, understanding what they're trying to achieve, and then devising solutions that are bespoke for their strategy."

This approach is now shared, at least to some extent, with others who have adapted their business over the years to suit market demands, she says, but there is good business out there, even in the current slow-down for those with the right recruitment model.

"We saw a hit around late 2006/early 2007 as, with all the changes in the NHS, the pharma industry wasn't quite sure how to adapt its model at that point in time; many were unsure about whether they still needed primary care or more secondary care and account management people. Then the account management approach slowly started to come through... and, without a doubt, there has been a reduction in the big primary care and hospital teams that the larger contract sales organisations (CSOs) used to have."

Until 18–24 months ago, she notes, the larger CSOs were not so focused on the "smaller vacancy management stuff"; their interest was awakened by the intensifying competition and the fact that large, simple sales team contracts are now few and far between.

"It's a different type of approach now. Companies want people in new types of vacancy management roles. Ideally they would like people who can adapt their skills and sell or market products at every level to customers across a certain geographical area. Clients also want people to hit the ground running, providing a return on the investment straight away. It is harder to find those people... and if anything, I'd say the large companies are finding these adaptations more difficult than small-to-mid-size firms."

View from a CSO
Nigel Mansford, managing director at European CSO Pharmexx UK Ltd, presents another perspective. He says vacancy management – by its contemporary definition – should be considered by pharma marketers as a core means of "resourcing the strategy".

"In the days where the battle was for 'share of voice', the term 'vacancy management' meant what it said on the tin – that is, a flexible, short-term contract to provide cover on a vacant territory. Today I think the term is more generic and covers a range of ad hoc resourcing solutions, as well as addressing the traditional definition."

Given the changes to pharma's business model, have CSOs altered their offering in order to share this ground with specialist recruitment agencies and dedicated vacancy management providers?

"Vacancy management used to be all about speed: he who got the candidates to the client fastest usually won the business. Now it's about quality, quality and quality. Bespoke solutions to meet specific local needs, whether that means more resources for a short time, or different skills such as nursing, key account management, commercial management or pharmacy etc. It can be as much about adding a new skills set to the team as it is about adding an extra head. Pharma companies need to leverage different skills from time to time."

Mansford adds, "Recruitment agencies are providers in the vacancy management market especially where the requirement is the straightforward provision of a person, with the client doing almost everything else. If we take vacancy management to mean flexible resourcing solutions, CSOs are, of course, able to leverage additional capabilities that may add value to their offer."

Unpredictable future
According to some recent research sponsored by Ashfield In2Focus, specialists in medical sales outsourcing, the main reasons behind a pharma company's choice to use a CSO are management of risk, flexibility and speed of response. Deploying a CSO resource in the current climate, the firm says, can help reduce pharma's operational costs, transfer the employment risks away from pharma, deliver services (such as sales training and implementation) at least as effectively – and often more flexibly – than headcount teams, and bring economies of scale.

The company also claims that in recent months it has seen "large transfers of resource from pharma headcount to CSO headcount", reversing the usual trend.

However the next 12-48 months unravel, altogether the effects of M&A/restructuring, changing business model/evolving requirements for personnel – plus the migration of recruitment 'solutions providers' in all guises on to the same piece of land – suggest that no-one can confidently predict the shape of the industry to come.

The Author
Rob Skelding is a freelance writer for the pharmaceutical industry
To comment on this article, email

6th April 2009


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