In the past, large pharmaceutical organisations have had a tendency to operate their Talent Acquisition function from their global headquarters utilising an in-house team. Over the last year however, there has been a notable shift with 5 out of the 10 largest global pharmaceutical organisations making the change from in-house recruitment teams to utilising Recruitment Process Outsourcing (RPO) – both on a global and multi-country scale.
In our recent research report “European Talent Acquisition Trends: Productivity, Profitability and Personal Impact,” 58% of Life Sciences organisations stated that they utilised an RPO provider – a stat I can only imagine will get bigger over the next few years. A new McKinsey report (“Detailing the New Landscape for Global Business Services”) outlines the popularity of partners within the Talent Acquisition space, saying, “Third-party providers are adopting more aggressive commercial strategies designed to own outcomes rather than simply provide resources. Thus, companies are being forced to rethink their sourcing strategies and the impact of sourcing on their GBS programs."
If we study the organisations embracing this change, it is easy to see why they feel that an RPO partnership will provide benefits:
Cost efficiencies: Recent financial challenges in research, development and commercialisation in Pharma have led stakeholders to reconsider their fundamental ways of operation. The challenges are driving them to look for alternative models to reduce their fixed costs and improve efficiencies in all functional areas that are not considered core for the business.
Geographical reasons: The talent differences between mature and emerging markets: In mature markets, in-house recruitment teams are usually well-established, but the growth of the sector has significantly shifted towards emerging markets. In Asia and LATAM, recruitment has traditionally been managed as part of HR. Among the reasons why includes local HR being able to cope with the language barriers and cultural differences which can make these regions hard to recruit for. RPO models, with their in-country knowledge, specialist recruitment skills and ability to flex and scale dependent on need, are facilitating the growth in these emerging markets. Bringing in an RPO frees up local HR from recruitment, making HR more efficient.
The changing landscape of Digital talent: Technology, Big Data and new partnerships are disrupting traditional talent strategies and transforming the types of talent that have typically been in demand for Pharma companies. Talent from industries that have already made the digital transformation – such as financial services, technology or consumer electronics – may be a natural fit for new roles, but these sectors are already engaged in a war for talent and are preferred choices for candidates.
Difficulties to flex and scale in-house Talent Acquisition teams: Recruitment in Pharma has peaks and troughs depending on seasonality, cycle of drug development and commercial geography that force the usage of contractors and agencies for augmentation of the in-house Talent Acquisition teams.
Shared services centres (SSC): As part of the alternative models to reduce costs and improve efficiencies, Pharma companies have established large shared services centres in lower-cost countries for some of their corporate functions. As Deloitte discovered in 2017, although transactional processes remain predominant at SSCs, adoption of more complex, knowledge-based processes has doubled or even tripled since 2013, meaning that more niche and complex roles will be needed in the future. These require high volumes of recruitment with niche functional and language skills during limited periods of time (18 months to 2 years), and organisations have used RPO firms for this purpose.
Global Sourcing ahead of the curve: Due to the global nature of Pharma talent and the international mobility of those people the need to generate talent pools and communities is critical in order to reduce time to hire and ensure availability of talent for the future. A recent PricewaterhouseCoopers (PwC) survey found that 76 percent of pharmaceutical CEOs are concerned about the availability of key skills so talent pooling is extremely important for these organisations – providing a way to remain engaged with candidates who could potentially work for the business in the future. In-house teams stretched for resource are finding it increasingly difficult to grow, invest and create talent pools as their key focus and metrics are filling live vacancies.
Spiralling cost of agencies and search firms: Due to the shortage and changing landscape of talent and the need to reduce costs on non-core functions, Pharma organisations with established in-house teams have seen the cost of agencies and search firms increasing significantly year on year. 34% of organisations surveyed in Europe stated that they used recruitment agencies for over 20% of their roles – a very costly exercise.
Risk/compliance: In such a highly regulated industry and with all the new legislation on data protection being introduced, organisations are looking at mitigating risks and better reporting and compliance.
Technology and automation: The Talent Acquisition in-house teams of Pharma organisations have been finding it extremely difficult to afford specialised technology (CRM, Selection tools, AI, etc.) and keep it updated.
Managing, training and development of in-house teams: For Pharma organisations, it has become increasingly difficult to hire recruiters with the relevant experience, which means that a number of recruitment contractors are used and attrition within the Talent Acquisition team is high. The difficulty of managing geographically dispersed teams increases resource costs and career progression is hindered due to their being no career paths set for smaller regions. In turn, this can lead to increased salary rise and attrition problems. RPO organisations can offer the career progression, development and mobility to recruiters that in-house teams cannot.
Candidate care: Candidate experience is critical, and the process that they experience needs to be fluid and personal. This is not an easy feat when the in-house team is already stretched and contractor recruiters are being used – consistency of experience cannot be guaranteed. Being able to utilise teams within RPO service that will help to keep candidates warm, and onboard candidates into the organisation can relieve a great deal of pressure on organisations and enhance the experienced so much so that candidates are unlikely to drop out of the process.
Organisations need to be considering all of the above and performing due diligence to make sure that their talent acquisition model is delivering the right results, not just for today, but for tomorrow’s organisation. After all, it is best to follow the curve than to be behind it.
Post contributed by Javier Carrasco, Global Senior Vice President. Connect with him on LinkedIn.