Article
The Moscow Times, 9 Ñåíòÿáðÿ 2009
An Inside Perspective: Candidates' View of Industry Labor Market
The crisis that began in the second half of 2008 overset the Russian industry labor market: It eliminated the notorious «overheatedness» and made the candidate and employer directly dependent on each other with both having to take interests of the other into account. The areas to have suffered the most from the crisis are manufacturing — metallurgy, construction, real estate and development, partly banks. When the crisis began, most companies had to seriously reconsider their development plans and sharply cut or «freeze» new hires. However, one cannot speak of a general recession, the situation can be described with one phrase — market reversal. For example, the consumer goods (mainly, fast-moving) manufacturing and sales sector is flourishing, as well as pharmaceuticals.
The main difference from the 1998 crisis is that of all sectors, it was healthcare and pharmaceuticals that turned out least protected then, whereas today this sector feels quite confident and retains the candidate's, not employer's, market.
Despite the fact that the situation in the pharmaceuticals market is more stable than in other sectors, employees of pharmaceutical companies do not take the matter of changing employer less seriously as there is a risk to make rash, unthoughtful steps and lose. It is no secret that those primarily affected by layoffs are recent joiners. As the candidates have grown more prudent, in a number of companies with historical turnover rate of 20 percent per year the picture has changed dramatically and the turnover rate has decreased to 2-3%.
A new survey conducted by ANCOR all over Russia among 1,000 specialists of the healthcare/pharmacy sector helped to identify the values of the employer as viewed by the employee, which enable to control the loyalty of staff in today's economic conditions. Unsatisfactory pay level was mentioned by the majority of respondents as the primary incentive for changing employer. Indeed, a candidate's compensation package is one of important motives in changing employer, but it is not the only or primary one! For example, during transition, professional and career growth, or at least opportunities for such growth in the future, will be analyzed, an indication of professional growth for candidates being their transfer from one product type to another (from OTC to prescriptions, from generic to original, etc.), additional training. Career growth is evidenced by any promotion from the medical representative level, expansion of functions and responsibilities. Not an unimportant factor in the consideration of an offer is the company's image, the quality of products, an interesting portfolio of medications, prospects for the emergence of new medications and new business lines. Non-monetary factors can occasionally be motivators as well. For example, in addition to career and professional growth, candidates may be attracted by a start-up project, namely a company expanding to a new region, launching a new product, i.e. developing a territory «from scratch.» They view this as an opportunity to unveil their potential, apply the experience they have accumulated, produce results as soon as during the start up phase of a project.
Currently, there is no turnover in the pharmaceuticals market. Many candidates truly believe that 3 to 5 years is the optimum period for engagement with one employer, provided, though, that the company not only trains and develops its employees, but promotes them as well. For most employees it is important if a company hires managers from outside or raises its own.
As for employers themselves, in the beginning of 2009 all representative offices of international manufacturers of pharmaceuticals carried out a traditional indexation of salaries of about 5 to 15 percent. At the same time, they cut their HR costs through other elements. For example, we see some companies being very continent in allocating budgets to various kinds of HR programs, e.g. to additional programs related to personnel assessment and training. Many companies are taking interest in outstaffing opportunities, especially where restrictions on the staffing list prevent from hiring new staff, while the interests of the business require to do so. Outstaffing services are now in larger demand than they were six months ago. However, pharmaceutical companies have always extensively used outstaffing and outsourcing by taking people off staff, when necessary, or leasing them.
For a long-term outlook, it should be noted that the pharmaceuticals market, in particular its retail part, will most probably feel the breath of the crisis. Consumer demand in drugstores may decline, especially for OTC medications, vitamins, skin care products. Eroded profits will make companies save, possibly leading to the introduction of certain limitations on marketing initiatives.
At the same time, we do not anticipate any serious disturbances in the pharmaceuticals market. It can be assumed that the situation will eventually deteriorate, but the negative consequences of the crisis will most probably not affect the entire pharmaceuticals market, but rather its selected areas.
Therefore, despite the unstable economic situation, the Russian healthcare and pharmaceuticals market is actively growing in comparison with all the other sectors.