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A recent global CEO report reveals that 51% of pharma CEOs think it has become more difficult to hire workers within the sector, outweighing the same problem in all other industries surveyed.
Pharma and life sciences have topped the ‘talent challenge’ poll in PriceWaterhouseCoopers’ (PwC) new Global CEO Survey. 51% of pharma CEOs surveyed said it has become more difficult to hire workers within the sector, outweighing the number of CEOs from a range of industries — including automotive, insurance, and technology — who agreed with the sentiment with regard to their own sectors.
The implications of this 'talent crunch' are grave, not least in its impact on profitability. According to the survey, one in four CEOs (across all industries) said they were unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of the talent recruitment problem. One in three is concerned that skills shortages impacted their company’s ability to innovate effectively.
Frequent job-hopping, rife across all industries and at all levels, is one factor leaving CEOs particularly uneasy. Company efforts to properly appreciate the loss in productivity and time when a valuable employee leaves (as well as the expense related to retraining) are now under way, but nearly half the CEOs surveyed said they need more information on the cost of employee turnover.
More unnerving for CEOs is the potential loss of ‘high-potential middle managers ‘. As a result, the report indicates, formal succession planning in some companies is starting to go “deeper into the organization”. Efforts to identify the talented managers earlier in their careers, and to specifically devote development resources to them, are becoming more pronounced.
The problem of hiring, developing and retaining talent in the emerging markets remains one that is particularly pertinent to pharma. For Marijn Dekkers, Chairman of Bayer, it has become “a major point of competitive differentiation”. The report states that, currently, 29% of senior managers (across all industries) are transferred from their headquarters country to newer markets, but “in an ideal world” only 18% of CEOs said they would continue to move their senior leaders from headquarters. But as the best people in India and China, for example, are increasingly tempted by the compensation packages offered by their domestic multinational companies, that “ideal world” figure remains elusive. “We try to avoid overseas assignments just to fill a gap,” said Dekkers, “but sometimes we can’t avoid it.” Indeed, 53% of all CEOs surveyed expected to move ‘experienced people’ from the home market to newer markets to fill skills gaps.
The report concludes “a minority of CEOs expect to undertake deep restructuring measures specifically to fill the talent gap”. More, around a third, expect to make “dramatic changes”, such as making an acquisition to secure needed talent, seeking partnerships to get access to skills, moving operations to more talent-rich areas, or making significant investments in technology to circumvent shortages.
Visit http://www.pwc.com/gx/en/ceo-survey/industry/pharmaceuticals-and-life-sciences.jhtml# for the PwC report.