Like a giant steam vent on a pressure cooker, the law of supply and demand has finally relieved the pressure pharmaceutical companies have felt for the past 10 years from ongoing pay inflation. Enough large pharma companies are downsizing their primary care sales force that it is now becoming an employers' market for qualified primary care reps.

For the first time in more than a decade, the sales force "arms race" has halted. Salaries appear to be leveling off, and pay practices are likely to be less aggressive in the immediate future. If this trend continues, it will have a ripple effect on hiring practices and pay structures. Companies will have the luxury of attracting talent in an environment with lower pay inflation and of choosing from more qualified candidates.

These were some of the findings of the Hay Group's 17th Annual Sales Force Effectiveness Study. (See "About the Survey," left.) However, not all companies—and not all positions in sales and marketing—are experiencing the same loss of prominence as Big Pharma's PCP field reps. In particular, Big, pharma is rethinking its sales force structure and investing in areas like managed care and national account management, which can have a greater impact on sales.

Hiring: On the Downhill Slope

For the first time in more than a decade, the pharma industry has halted its sales force expansion. In 2007, thousands of reps were hit with pink slips in a much-publicized spate of downsizing.

Of the Big Pharma companies responding to the Hay Group survey, 17 percent have decreased their sales staff by more than 15 percent. This precipitous drop is particularly telling because launch activity—the main driver of sales force ramp-ups—has been steady for the past five years. These major layoffs from Pfizer, AstraZeneca, and others made headlines and indicate major shifts within the industry. But they don't tell the whole story.

Expansion Slows

As is expected in a climate of major layoffs, the rates of voluntary turnover—when the employee decides to terminate his employment by a company—have also declined. Voluntary turnover was 12 percent in 2007, compared with 15 percent in 2006. This is, however, still a bit higher than the 10 percent we see in sales positions in other industries. The most movement is typically among PCP reps, but interestingly, for the first time, voluntary turnover among PCP reps, hospital reps, and specialty reps was the same. Hospital and specialty reps have begun gravitating toward smaller or midsize companies with more robust pipelines. We are seeing that many of these reps are willing to accept lower pay in exchange for perceived greater job security—a big concern, given that only 17 percent of Big Pharma companies anticipate growth in the next 12 months.