Retention of Talent in the Pharma Industry
In a continually unstable economic climate like the pharma industry, the need to retain and foster existing talent becomes more prevalent.
Organisations have no desire to invest in the training and coaching of key employees only to see the benefits of that investment being reaped by another employer.
The retention of staff applies particularly to Generation Y employees: the demographic cohort born after the early 1980s and before early 2000s. They are today’s 20-to-30-something workforce who have collectively fuelled the socially networked, multi-channel society and represent the management class of the future. This “digital native” generation is the creative engine of the digital economy. Yet they also exhibit a new-found job mobility which, from an employer’s point of view, is a ticking time-bomb of potential cost and disruption to their businesses.
The pharma industry has for some time recognised the need to foster and retain employees, but this does not necessarily mean that significant efforts are being made. A recent survey by RSA of nearly 400 life science executives found that, while over 90% identified talent management as a key priority for 2010, only 26% had an active strategy in place for retaining talent, and 68% had no clear leadership succession plan.
Our new research at the iOpener Institute for People and Performance, which analysed responses from over 30,000 professionals in Europe, the US, Australia, India, China & Africa, has shown the digital generation – Generation Y – values job fulfilment over financial reward. Whilst pay levels are not unimportant to Gen Y (i.e., people are not prepared to be under-paid for their work), there is no significant correlation between increased levels of pay and greater talent retention.
The research analysis also looked at the correlation between job fulfilment and likelihood of quitting. Job fulfilment was measured by the extent to which people stated that they “love their job”. Here, a very strong correlation emerged, definitively showing that a fulfilling job is what keeps the Gen Y employee on board, not simply throwing money at them. A single point of increase in job fulfilment brings down the intention to leave by 0.8 points. Statistically speaking, job fulfilment (or, rather, lack of it) explains almost 60% of the variance in a Gen Y employee’s desire to leave. This suggests that Gen Y is not inherently interested in jumping ship for the sake of a bigger pay packet. Instead, Gen Y is simply not prepared to stay in jobs that make them unhappy.
This is of particular importance to the pharmaceutical sector, as whilst pay levels are, on average, 20% higher than other manufacturing sectors,analysis of the iOpener database, which includes information from workers across a range of industries including education, health and manufacturing, reveals some areas of job fulfilment where the pharmaceutical sector specifically is underperforming. Happiness’ and ‘well-being’ are not some kind of soft concept, but can be finely calibrated by assessing the identifiable key components of ‘happiness’ at work:– positive factors such as recognition, respect, and time on task; as well as negative indicators such as likelihood of leaving or sick days off.
For example, contribution is one of the most important factors that influences happiness at work. Contribution is a dual concept: it is not only about what the employee puts in but also what they get out of working. So, as well as feeling that they are achieving goals and contributing to the working of the organisation, the employee also needs to be given feedback, respect and appreciation in return. By analysing the responses of employees in the pharmaceutical sector, we can see that they display 4% less contribution than the average across other industries.
Our research into Gen Y also found that this group, in particular, also needs to believe in the strategic direction that their employer is pursuing. A correlation was noted between the trust that Gen Y employees have in their leaders’ vision, and their intention to leave the organisation. The more Gen Y believes in the leadership’s corporate strategy, the less likely they are to leave.
For the pharmaceutical industry, this is an important point. Numerous scandals have occurred over the past few years. The most notable of which was the $3 billion fine against GlaxoSmithKline - the largest fine ever imposed to a pharmaceutical company by the U.S. Department of Justice. GlaxoSmithKline illegally marketed Paxil and Wellbutrin, antidepressant drugs, while withholding data describing the health risks of Avandia, a diabetes drug.Indeed, GlaxoSmithKline are not alone - the total cost of industry fines is over $20bn covering the last two decades.These episodes have damaged the sector’s reputation not just among the public but also current and potential employees.
However, as well as focusing on the areas where the pharma industry could improve, it’s important to recognise where it is performing well. For example, employees report feeling that their job has a positive impact on the world (22% more than average across all sectors) and that what they’re doing is worthwhile (14% higher than average). This is in comparison to the food services, mining and accounting industries whose employees report the lowest levels of this attitude.
Businesses are recognising that Generation Y—their up and coming management cohort—is different from the previous generations, especially in terms of job mobility. No organisation wants to invest in the next generation of management only to find that they leave and destroy return on that investment. While this recognition is shared by the pharmaceutical industry, few companies have strategies in place to retain talent.
Our research, based on the analysis of thousands of responses, clearly demonstrates that simply throwing money at Generation Y will not be enough to retain them. Instead, Gen Y employees need to feel a sense of job fulfilment and this can be finely measured by analysing the components of happiness at work.
Analysing employees across the pharmaceutical industry as a whole, it’s clear that whilst employees feel that their jobs have a great sense of purpose and meaning, feelings that they are contributing to the working of their organisation are low. Pharmaceutical companies would do well to consider this as they formulate a talent retention strategy, fit to nurture their managers of the future.
Jessica Pryce- Jones is joint founder and partner of the iOpener institute for People & Performance which examines the factors that contribute to resilience and how it can be maintained.
The report ‘Job fulfilment, not pay, retains Generation Y talent’ is available for download here
To get your personalised, free report measuring your Happiness at Work complete the questionnaire here http://www.iopenerinstitute.com/get-your-free-report.aspx
Pharmafile, ‘Retaining pharma top talent’, 25th February 2011
Chemical Industries Association, ‘UK chemical and pharmaceutical manufacturing: The heart of our economy’, November 2009
Yahoo Finance, ‘The true cost of pharmaceutical scandals’, 18th December 2012
Guardian, ‘Pharma overtakes arms industry to top the league of misbehavior, 8 July 2012
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