Reflections on the 2009 job market and results of Pharmaceutical Manufacturing’s annual salary and job satisfaction survey:
PhM: What trends are you seeing that are shaping the pharmaceutical job market, particularly from an R&D and manufacturing perspective?
M.S.: With major drugs coming off patent and serious doubts about the existing pipeline’s ability to replace the income that will be lost to generics, one would assume that there would be a major focus on drug discovery and development. Companies are looking, and will continue to look, to outside entities for a healthy portion of drug discovery and early-stage development. So, as a result, we’re actually seeing some disruption in R&D staffing in addition to sales and marketing people.
This is not to suggest that all of these positions are going away. In fact, many of them are reappearing at smaller, typically venture-backed pharma and biotech companies. In addition, some companies are narrowing their therapeutic business lines, preferring instead to focus greater resources on fewer treatment lines. So for the individual, it’s important to determine if one’s area of expertise, or therapeutic franchise that people work in, is aligned with the company’s strategic plans.
Outsourcing will continue to be a growing trend in the industry. Big pharma companies’ strengths lie in commercialization, marketing and distribution and those are areas that a lot of companies are focusing on. In doing so, they are looking to outsource many non-core, non-revenue driven processes such as manufacturing and various stages of R&D. Companies are utilizing more CROs and CMOS in areas of the world such as China and India for this type of work, where the thought is that the quality is acceptable, but the cost is much less than doing it in house.
PhM: Is the economy dominating the market, or in some respects are we seeing in pharma the same consolidations and layoffs we’ve been seeing for years?
M.S.: It’s not surprising that the current economic struggles that the U.S. and world are facing are dominating the news media. It seems as if there is no place to hide from the news or some discussion about the state of the world economy, both at work and at play. While the economy is grabbing the headlines it’s only natural to assume that the economy is the reason for recent layoffs in the pharmaceutical industry.
But dig a little deeper, and it becomes clear that while the economy certainly has an impact on the pharmaceutical industry, the layoffs that are occurring now are nothing new. In fact, from 2003-2006, prior to any evidence of economic distress, approximately 86,000 pharmaceutical jobs were lost. What we’re experience now is more of the continuation, if not acceleration, of a trend that the industry is facing.
PhM: According to this year’s survey, there has been a significant jump in the percentage of respondents who are concerned about their job security? Is there any surprise in this?
M.S.: No surprise at all. The layoff trend in pharma is nothing new. However, the current economic situation only exacerbates the situation.
PhM: There’s also been an increase in the number of respondents willing to look outside of pharma or the life sciences for work. What do you think explains this trend?
M.S.: It’s no surprise or secret that the entire pharmaceutical industry is going through a difficult period of time. The issues that plague the industry are systemic and there is very little immunity from company to company. It’s not as easy to job hop today as it was several years ago. Then again, this was not a common practice in the industry, either. People are finally coming to terms with the fact that the industry is changing and many have a difficult time dealing with change.
No one knows for certain where the industry is headed, but this process of evolution is unpleasant, especially for an industry that has, until recently, prided itself on providing a comfortable career for its workers. The conclusion that many are reaching is that the grass is not greener at other companies because they are mostly all dealing with the same issues and suffering alike.
PhM: Who are the people that are going to survive and thrive in the pharmaceutical industry going forward?
M.S.: The answer depends on what area of the industry we’re referring to. There are basically two types of individuals who will succeed in the industry. There are specialists, individuals who rely on their vast, in-depth knowledge of a specific and rather narrow expertise talent, skills and contacts. In the future, most people working in the industry will be specialists. These are individuals who have the ability to transport their skills from project to project, and will find many opportunities as independent contractors or pharma support professional as the industry continues to outsource more work.
The other type of successful pharmaceutical executive is the athlete. These are people who possess a broad set of skills that that allow them to fill multiple roles within an organization. The chief role of athletes is to manage complexity, finding ways to balance all of the elements that must work together (e.g. research and development, marketing and finance) in a company. While technical competence is importance, the overlay of sound business or legal acumen is a key to a successful athlete.
PhM: How is outsourcing impacting the job market? Might the economy and global instability be encouraging U.S. drug manufacturers to keep their operations closer to home?
M.S.: Outsourcing is a trend that will only continue to increase in prevalence in the future. This applies to both domestic (i.e. sales and human resources) and foreign (i.e. manufacturing and research) outsourcing. There are a lot of burgeoning companies in China, India and the like that are attracting work that used to be done in house. The attraction is cost. The cost of labor is a lot less expensive in those countries than it is in the U.S. or E.U. and companies are exploiting those opportunities to keep their costs down. While there have been a few quality control issues of late, this will not deter investment in these countries and at the same time, these countries also recognize that such issues need to be addressed to continue attracting business from the U.S.
It’s important to note that many of the domestic positions, while being eliminated in big pharma companies, are reappearing at the independent contractor or pharma support level. This is where the specialist has, and will get, ample opportunities to showcase their talents, many as their own employers.
PhM: Nearly 80 percent of our respondents said that they were willing to take on more responsibility in their work if needed, even though many of them have already increased their duties of late. What do you read into this?
M.S.: People fear more for their employment security today than they have in the past. Again, this is the result of the issues that pharmaceutical companies, being compounded by economic challenges, around the world are facing. It’s interesting how the people being surveyed are willing to accept additional responsibilities. Only a few short months ago, many people who were able to escape layoffs were lamenting that they were being saddled with more work due to staff cuts. In many instances, the added responsibilities were not being offset by added compensation. I would suspect that if the same survey were administered six-to-twelve months ago, the percentage of respondents willing to take on more responsibilities would be significantly lower.
PhM: What does the future look like? Have we seen the worst of the layoffs and uncertainty in the pharma job market?
M.S.: I spent about a year researching this very question and the space allotted for an answer is not nearly enough. Please read our white paper, “The Continuing Evolution of the Pharmaceutical Industry: Career Challenges and Opportunities.”