Op Ex & Lean Six Sigma / Facilty Design & Management

A New Beginning for the Industry?

Pharmaceutical Manufacturing’s “Salary and Job Satisfaction Survey” reveals that the industry might be experiencing some type of a rebirth based on new ways of doing business. Efficiency, flexibility and a love for what you do are key elements to combat cost reductions and other challenges taking place.

By Bill Swichtenberg, Senior Editor

Instead of feel-good stories on blockbuster drug discoveries and soaring stock prices, last year the pharmaceutical industry was burdened with failed trials, disputed drug information and patent expirations. For those with jobs in the industry, the buzzwords became outsourcing, acquisition and layoffs.

Faced with lower revenue growth, companies have focused on cutting costs in various ways. Very few pharmaceutical companies have been spared from projected job cuts. Pfizer is eliminating 10 percent of its workforce or 10,000 jobs. Merck is dispensing with 7,000 jobs, AstraZeneca cut 7,600 positions and Wyeth will reduce its workforce by 4 to 6%. Even biotech firm Amgen announced layoffs of between 2,200 and 2,600 people. Change is taking place in the industry.

“In the past, a job in pharma offered a secure future,” said one respondent to Pharmaceutical Manufacturing’s Salary and Job Satisfaction Survey. “Don’t count on that anymore.” Is it time to bail on the industry and take your job skills elsewhere? Not according to many of the 404 readers who responded to the survey. However, it might be a good time to take a personal inventory of your attributes,motivations and back-up plans. “Think about what you want to do in five years and evaluate where you want to be within the pharma industry,” was the advice from one industry member. “When the fun goes, leave quickly rather than stay and become bitter,” said another.

Survival and Rebirth

The good news is that it has taken longer for the pharmaceutical industry to get to this point than many other industries. “The industry is now where the auto and other industries have been for over 10 years,” one respondent observed. “The change is going to hurt, but the industry is still going to be a place where we make products that save lives. It will still be a great place to work, just different.” People are not yet panicking over their careers, but are being more cautious. Job security concerns were expressed by 56% of this year’s respondents, compared with 43% last year. “Pharma is currently facing uncertainty,” said one. “It is evolving and possibly mutating. Individuals must be flexible, tenacious and thick-skinned.”

However, the U.S. Bureau of Labor Statistics (BLS) released its “Career Guide to Industries, 2008-2009 Edition” with the startling projection that not only would 2007 be a record high for U.S. pharma employment, but the 10-year projection is for 23.7% growth. Not everyone is buying into these projections, however. “Mergers and acquisitions, downsizing and outsourcing do not paint a rosy picture for the pharma industry and job holders,” said one respondent.

Typical Survey Taker

While respondents to our survey come from many different backgrounds, the typical taker is male, between 37 and 45 years old; has a bachelor’s degree and has been in the pharmaceutical manufacturing field for 11 to 20 years. He works in quality assessment and control or manufacturing and operations and supervises 1-10 people. He has been with his present employer for 6-10 years and is not (88%) a licensed Professional Engineer.

The typical respondent makes between $100,000 and $150,000 per year while working between 40 and 49 hours per week. However, many complained of an unreasonable workload, difficult timelines and high stress. While receiving three weeks vacation sounds nice on paper, only 51% were able to take all of their vacation time last year. Job reviews are primarily of the traditional variety done by managers, but more and more employees are also being peer-reviewed and undergoing a 360-degree review process.

In this method, feedback comes from subordinates, peers and managers, as well as a self-assessment, and in some cases, external sources such as customers and suppliers. Most survey takers have received a salary increase of 1 to 6% in the last year. More than 73% of our survey respondents received a bonus last year. Generally, these bonuses are linked to the company’s performance against some type of metric. Metrics used include: sales and net income growth, efficiency, productivity, cost reductions and earnings per share.

The individual’s, team’s or group’s outstanding performance or goal expectations can be taken into consideration as well. Benefits provided to the majority of workers include medical insurance, life insurance, dental insurance, disability, a 401K savings plan, a pension plan and education reimbursement. Stock options were also cited as a benefit by 46% in the survey. Flexible working hours were viewed as a way some companies are trying to balance work and personal life challenges. “Individual managers can provide a lot of flexibility in your work schedule, provided that you are a good performer and deliver the required results,” said one respondent. However, another noted, “In order to be promoted to higher level positions, the ‘give’ is in your personal life.”

Job Approval

It seems that most of those taking the survey were basically satisfied with their job. Where 5% had a “very high” level of satisfaction, most workers had a “high” level (43%) or an “OK” (43%) view of their job. “It is a great industry/profession. There are very dedicated people willing to share their knowledge to those with a desire to learn,” said one respondent.

This satisfaction is linked to the challenging work (41%) that the pharma industry provides. Salary and benefits (18%) and opportunity for advancement (16%) also play a part.

Learning to Fly

It is a good thing that respondents like challenges, because the work is becoming even more difficult as a result of the economic pressures facing the industry. For 47%, hiring freezes have been put into effect. “Do more with less,” was the battle cry of one respondent. Layoffs have been seen by 40%, while limited promotions and raises have been experienced by 35%.

“There is a lot of uncertainty with senior and executive management changing on a regular basis.” Outsourcing is another area seen by respondents (30%) due to the economic pressures. According to IDC’s Health Industry Insights, the life sciences industry will see much more outsourcing overseas and domestically in 2008 as it focuses on reducing expenses to keep expanding.

Cited by the report as possible beneficiaries are Singapore, because of its strong intellectual property protection and large investment in the biotechnology sector, and India, because of its lowcost resources and trained researchers. While 30% of respondents are not worried about preparing for layoffs/downsizing in the near future and another 24% are not currently doing anything but need to, most workers are at least planning for them. The majority (35%) are establishing relationships with executive recruiting firms as well as peers from other companies. Furthermore, 30% are participating in networking through professional organizations.

Even with the rather gloomy near-term outlook, only 28% percent are contemplating a career move away from the pharmaceutical industry. “Networking is an absolute necessity,” explained one respondent. “My years of experience have proven the industry to be a very small ‘family.’ It is often who you know, rather than what you know.” Those who want to stay in the industry are willing to assume greater responsibilities (74%), join a small, specialty firm (56%) or go work in a foreign country (32%). “The pharma industry is complex. I would recommend that people joining the profession keep a grasp on what is going on across the industry,” advised one survey taker.

With changes also happening at the plant level in many companies, new opportunities are arising. “There is a changing external (client) business environment requiring changes in internal strategies to meet client needs,” said one respondent. New team structures were introduced at 48% of respondents’ companies. “This new structure has led to a switch to Quality by Design and a quality risk management operational environment,” said one. However, it also can have the reverse effect; as another respondent noted, “I now work with ineffective systems that people don’t want to change or improve.” In the past year, 35% of respondents have seen a new product introduction, 28% a plant expansion and 27% a Lean and/or Six Sigma implementation.

Unfortunately, the workload has increased as well (cited by 40%), due to staff cuts. This has resulted in the “unavailability of staff that understands the pharma industry,” according to a survey taker. In addition, many people are now balancing multiple projects, causing some of the most interesting projects to be put on the “back burner.”

People are split as to whether there is sufficient opportunity for growth inside their company. Nearly 25% said “yes,” 36% answered “sometimes,” and another 26% do “not really” believe in this prospect. These scenarios have led several employees to transfer jobs or relocate from “a manufacturing plant to the corporate headquarters.” Therefore, some growth opportunities might require a change of scenery. “The industry is changing, but overall I think there are plenty of opportunities if you are willing to adjust and move around [among] companies,” said one respondent. One positive among the changes taking place is that silos are being removed.

Being flexible was a point made by numerous survey takers. Advice for succeeding in the industry included having transferable skills, interpersonal skills (such as writing and communication) and being well rounded. “Don’t overspecialize if you are in a technical environment so that you get yourself pigeonholed,” said one. Another respondent was more direct, “Expect change and be able to embrace it – make lemonade out of lemons.” Not everyone sees the industry as rising from the ashes. Some survey takers recommended people stay out and find something else, at least until everything calms down. “I see changes being made that are short-term focused,” cautioned a survey respondent.

However, the majority in the survey still see a silver lining. One respondent described the industry as similar to the housing market with its growth and recession phases but regardless of the phase, houses still being sold. “While pharma may not be in a growth phase, biopharma is still going strong,” he said. “Pharma, as an industry, will rebound, but it will be other entities (biopharma) carrying the load in the meantime.”

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