Quality over quantity, a more tenured sales force, and yes, even some exciting double-digit growth were bright spots for pharma in 2008, a year which saw company giants begin to rightsize their sales forces and pull back from the "arms race" mentality. The number of reps dropped by as much as 8 percent by May, when the Hay Group Annual Sales Force Effectiveness Study was conducted—signaling, for many companies, a more turbulent year ahead.
With these reports, amid economic uncertainty, one might speculate that those who are employed are staying put. The fact is that even with fewer sales reps overall, they're still in demand ... and they're still on the move. Certain segments of the industry are expanding—a fact not lost on sales staff, as voluntary turnover has remained high, or even increased, among some employee groups. In this environment, companies dare not become complacent in policies to retain top performers. In fact, applying extra rigor to human capital during an economic downturn can deliver a sustainable advantage.
Industry experience is a key attribute for candidates, and 95 percent of surveyed companies say they aren't shy about poaching reps from other firms. That fact alone suggests pharma is now a harder industry to break into for college graduates—and others. While 28 percent of respondents use contract sales organizations (an increase from 20 percent in 2007), almost one-third report that they never (or infrequently) recruit contract reps into full time positions.
Generally speaking, there is an inverse relationship between the strength of the economy and the rate of turnover; the tighter the job market, the lower the employee attrition. Because data for the survey were collected in May (before the cracks in the economy really started to appear), and because certain segments of the industry are expanding at a healthy clip, it follows that the voluntary attrition rate within sales jobs remained high in the 2008 study. At the time of the study, voluntary turnover was expected to stay at 2007 levels.
Hay Group research has repeatedly demonstrated that pay is the primary reason why high performers leave jobs—which are the very people companies want to retain. This explains why 81 percent of surveyed companies have implemented new retention initiatives, and why about half have formal procedures in place to retain high-potential employees, up from 22 percent in 2005.