Why have employees kept a belief in company culture despite major structural reforms to sales forces?

If you cast your mind back to the mid-1990s you’ll probably recall tapping along to a song sang on screen by a warthog and a meerkat in one of the most memorable scenes in The Lion King. The moral of hakuna matata was that regardless of your surroundings you have to make the best of them. The same could be said for key account managers working within in today’s medical sales sector.

There’s no getting away from the fact that the way pharmaceutical companies conduct internal operations has changed and continues to evolve. The same could be said of their philosophies. A few years ago – in an era of feet on the ground before the patent cliff – pharma companies could rightfully claim holy values, visions, beliefs and habits. However, after widespread job cuts where thousands of people have lost their jobs can the same still be said?

It seems the answer may be a resounding ‘yes’ – and that’s coming from employees! Respondents to the Pf Company Perception, Motivation and Satisfaction Survey again highlighted the importance of company culture after it was voted the fifth highest motivating factor for more than 1,200 people working in the medical sales industry. However, its fifth placed ranking shows there’s still room for improvement.

Employees working for contract sales organisations placed less emphasis on company culture than those employed on a permanent basis within the pharmaceutical industry. Interestingly, it was younger respondents who felt more motivated than older colleagues. Respondents aged less than 25 voted company culture as their main motivating factor whilst at work. But those aged 54 or over said it was only the seventh most important factor to them.

But what have the sweeping job cuts done to satisfaction levels? Overall, 59% of respondents claimed to be satisfied with their company culture with slightly more than a fifth (22%) claiming to have concerns. Women (61%) were slightly more satisfied then men (57%), with a higher proportion of males (26%) saying they were disillusioned with existing policies. Despite ranking company culture as only the seventh most motivating factor, those aged between 25 and 34 were the most satisfied of respondents with 68% saying they were happy. But those aged 54 and over said they were the least satisfied with 27% voicing their opposition.

Leading the way
The importance of company culture has long been recognised. It forms the environment in which people judge the appropriateness of their behaviour and their actions. A positive company culture – one which staff ‘buy in to’ – will influence how individuals work on a daily basis and reflects their motivation and performance.

As the pharmaceutical industry strives to be more transparent the emphasis placed on company culture has increased. The importance of leadership where company culture is concerned cannot be underestimated. The leadership structure of an organisation almost drip feeds the principles it wishes to be known for. However, overall success usually results from effective leadership, an engaged workforce and good lines of communication between the two.

Yet open conversations only play a minor part in establishing and developing company culture. There has to a commitment by managers and their own leaders to act in a way which they would expect from those at the lowest run of the ladder. Training and competence, compliance with procedures and organisational learning also make up essential values.

While it’s not easy to establish and maintain company principles it’s even more difficult to change and introduce new methods. A cultural change can take several years to introduce. Humans are creatures of habit and employees are no different. Teaching old dogs new tricks really is a time consuming process – regardless of how much investment there may be.

Choosing the one
The website learnmanagement2.com says there are four main types of company culture. The first, usually found within small or medium sized organisations is power culture. Here, control is a key element. Decisions within a business are usually centralised around one key individual. That person usually has control over decisions and the power to enforce them. This allows efficient decision making. However, this method does have its problems. A lack of consultation between other members of staff can lead to a feeling of being undervalued and a lack of motivation. A high turnover of staff is also associated with this type of company culture.

Then there’s role culture – possibly the most common and logical in organisations across the globe. Here, businesses are split into divisions or groups where individuals are assigned particular roles and responsibilities. This has the benefit of specialisation where bosses can rely on individual skill sets and employees to highlight their worth to a company through performance measures.  

Task culture sees a team-based approach assigned to a particular project. Popular in today’s business society, task culture offers benefits both to staff and their employers. Individuals feel motivated when tasks are completed or achieved and a sense of value after being selected for projects by senior management. NASA is one high-profile organisation which promotes task culture through its missions into space.

Finally, there’s personal culture. This is more commonly found in charities or non-profit organisations. In this instance a focus is placed on the organisation without any thought for personal progress or gain.

Changing principles
Research has shown that the most successful companies all have a strong culture – whatever it may be. The two are interlinked. But it’s not a question of luck either bringing the two together. The CIPD says that evidence has shown that organisational success is dependent on having the “right mix” of human resources in place. Also, there must be an ability, motivation and opportunity for staff to support cultural ideologies. Firstly, companies must recruit the correct people with the ability to understand and promote set values. Managers must then ensure that staff are effectively motivated in the workplace and to provide them with the right opportunities to use their skills in well-designed roles. 

It’s in the initial stages of recruitment where company culture CAN be defined and discussed between employees and their bosses. During induction days it’s rare for company culture to be discussed, let alone a handbook given out. However, during the interview process, bosses can get the chance to assess whether those sitting in front of them will be able to meet and enhance set beliefs.

So there you have it. If you want to improve your levels of company culture it’s important to find an organisation with the same philosophy as yourself. If you can find a company whose values match your own you’ll soon be tapping along again to hakuna matata – it’s a problem free philosophy!

Pf’s Iain Bate examines how contract sales organisations are taking their place among the industry heavyweights.

There can be little doubt that pharmaceutical employees – in particular sales and marketing executives – have taken some metaphorical hefty blows in recent times. All of pharma’s biggest heavyweights have announced ‘austerity’ measures as part of widespread job cuts across the majority of divisions in recent times.

Whilst pharmaceutical CEOs have enjoyed champion pay rises, the humble employee at ground level has been unable to duck and weave away from the dreaded knockout blow. As a result, the job market has been on the ropes. However, candidates searching for a career in the medical sales industry do not have to throw the towel in just yet.

The employment market has suffered many bumps and bruises in recent years – but Contract Sales Organisations (CSOs) are leading the fightback. Now regarded as a leading contender for those looking for a prolonged career in the medical sales industry, CSOs continue to punch above their
weight in a challenging environment.

Pf spoke to four leading CSO companies to provide a blow-by-blow account of how contract organisations have boxed clever in recent years. Why have they gained in popularity despite the employment market suffering a bloody nose? And what does the future hold for the contract sales movement?

The gloves are off

In the modern working environment, when uncertainty accompanies everyday challenges, the flexibility CSOs offer clients is a major attraction. “The fundamental driver is the requirement for an increase in flexibility from our biopharma customers,” says Helen Molloy, HR Director at Quintiles Commercial. “This is nothing new – but what has changed is the nature of that flexibility. It’s not just about numbers of people, it’s about expert teams with specific skill sets and evidence tailored address local priorities.

“Customers are increasingly looking to partner with us to help navigate challenges around proving cost effectiveness and long term value of a drug to a wider range of stakeholders. We are moving away from what has historically been seen to be the fundamental core of our services, and into much more specialised areas.”

Flexibility is certainly an attractive proposition for clients who have slimmed down sales teams yet still require the prowess to impress customers. However, flexibility isn’t the only factor driving CSO growth. Specialist skills are now required by clients to outwit the opposition. “Contract sales organisations are moving away from large-scale build, high noise proposition and are becoming much more specialist,”
says Emma Busby, Project Director at CHASE. “Organisations are demanding to have specialist skills and capabilities either to be equitable to their teams, or, in most cases, to offer more opportunity and more value within their teams. Their key objective is to heighten the level of capability that they have got on their headcount team.”

Pharma’s increased reliance on contract methodology is now reflected in the number of candidates turning to CSOs to develop a career in UK medical sales. “CSOs are becoming the only way into the industry,” says Emma. “We work with many blue-chip companies to provide an influx of trainees every year. Again those people go through organisations and develop. The trend went away from that for a few years, but it’s definitely coming back now. Companies recognise they need high-quality sales engagement. We can regurgitate skills but fresh attitudes and capabilities coming in will actually challenge the status quo.”

At a time when, as far as job security is concerned, pharmaceutical representatives fear the next barrage of punches, CSOs are doing more than ever to provide a shot at the big time in the industry. David Alexander, Contract Business Unit Team Leader at Star, says there are a number of reasons why CSOs have gained
in popularity recently. “Security, variety and skill development are key,” he said. “Working for a CSO
means people can move from one assignment to another and gather experience with different companies,
in different therapeutic areas and with different customers over time. Transferable skills and flexibility
are important qualities in today’s environment and working with a CSO will help people profile both.”

Swapping gloves

That value is also being recognised by clients seeking to boost sales at various stages of a brand’s life cycle. With the industry well on the way to manoeuvring itself away from the traditional sales model to a sophisticated fighting-fit key account approach, contract sales organisations are perfectly placed to augment teams or, in some cases, replace them. “A CSO can help do both,” says David. “It can either enhance a team or, if necessary, it can replace it. You can either have a bolt-on campaign, where contract reps target specific areas in fixed time periods, or, you can replace an entire team with a CSO key account team, enabling flexibility and resource in particular areas of the UK. This allows clients to be much more outcomes-focused.”

The next round

But what next for contract sales organisations? Will pharmaceutical companies decide to completely
shed their entire headcount and outsource functions to specialist organisations? Andy Holgate, Business
Unit Director from Ashfield In2Focus, believes this may be the case. “Contract sales organisations are expanding into new areas,” he says. “The model for CSOs in the next 20 years could be where pharmaceutical companies simply concentrate on research and development and strategic marketing and finance. Contract sales organisations will, potentially, then do all of the rest. I think that is the trend that CSOs are driving towards.

“We may be in a bit of a perfect storm at the moment where pharmaceutical companies, many of whom are being squeezed from above and are tinkering around the edges, are considering outsourcing services in areas where they would never previously have allocated external resource. Contract sales organisations are extremely good at being able to help pharma companies, and other clients, differentially resource people when and where they want them and when and where they don’t, be that in sales or other value-adding roles.”

In an austere environment when pharmaceutical companies are fighting against a whole host of external
pressures, it’s difficult to see how contract sales organisation will fail to grow in the coming years. The powerful combination of being an inviting proposition for individuals seeking a career in medical sales industry, and strategic allies for companies in need of flexible and specialist commercial expertise, CSOs are rapidly establishing themselves among the industry heavyweights.

Workers at Merck Serono’s doomed headquarters in Geneva are planning strike action if Merck does not extend the timeframe for consultation with union leaders over job cuts.

Employees have already staged ‘coffee and croissant’ protests and have now threatened industrial action at the planned closure of the plant.

Merck estimates that up to 500 jobs will be lost and 750 transferred. However, trade union Unia claims that up to 1,500 positions will be affected in total.

A spokesperson for the Swiss employee group said the terms and condition provided by Merck under its transfer plans are “really unattractive and mean lower quality of life if accepted”.

Merck revealed its efficiency plans back in April as part of measures aimed to make net savings in the Serono division of €300m by 2014. It estimates the restructuring costs will be approximately €600m.

Karl-Ludwig Kley, Chairman of Merck’s Executive Board, said the company faces “unprecedented market shifts and increasing competition in key areas” and is “fortunate” it can address these issues from a “position of relative strength”.

He warned that if Merck does not take action it faces “tackling these issues from a much weaker position”.

Mr Kley added that the efficiency programme is not solely reserved for Merck Serono and will “affect all businesses in all regions” but remains convinced the plans “will lay the foundation” for Merck to build on new opportunities.

Attracting and retaining talent is a major challenge for UK employers. The battle to increase productivity while delivering cost-efficiencies is driving change in companies’ employee benefit strategies. Pf provides an overview of employee benefits.

Popular HR wisdom, backed up by respected psychologists and employment commentators, suggests that money is not generally the main motivator for employees. Satisfaction in the workplace depends on much more than our annual salary and, according to American psychologist Abraham Maslow, is only one of many ‘hygiene factors’ that determine whether or not we are happy at work. Maslow’s Theory of Human Motivation included his acclaimed ‘Hierarchy of Needs’, which outlined the most fundamental requirements for human satisfaction. It was written in 1943. Despite vast societal and technological evolution since then, its most salient messages still appear to resonate today.

The concept of benefits beyond salary is cemented into the modern workplace. ‘Employee benefits’, defined by the Chartered Institute of Personnel and Development (CIPD) as “non-cash provisions within the pay and benefits package, although they have a financial value or cost for employers”, have traditionally been regarded as a vital component in staff retention. In many cases they have been considered a moral obligation for employers.

In the 1970s, employers increasingly looked towards developing more generous benefits packages rather than rewarding employees via basic salary. But in recent years, as tax legislation has tightened its grip on non-cash provisions, the attraction of certain benefits over salary has been diluted. In response, employers have begun to adopt a more individualistic approach to how employees are rewarded and transferred more of the risk – and cost – of benefits onto their workers. For example, the days of final salary pension schemes are now all but over and have been replaced by the offer of money purchase plans for employees. At the same time, more employers are moving from fixed benefits to flexible and voluntary arrangements.

There is little doubt that the global economic downturn has had a demonstrable impact on the employment market and, by association, the employee benefits landscape. Across the board, companies are adopting a twin focus in which they are trying to balance a drive for productivity gains against the need to deliver cost-efficiencies. As such, employers need to attract and retain talent but, at the same time, secure the best possible return on investment with their human resource. Sustaining staff motivation and employee engagement during turbulent times is a major challenge for modern businesses. Benefits are, of course, one of the key weapons employers have at their disposal to address employee engagement; but with a widespread determination to control costs, companies are needing to be more creative in how they shape employee benefits packages.

Total rewards
The past year has seen a significant shift in the way companies are designing and presenting benefits packages to employees. According to a survey carried out by the UK magazine Employee Benefits, there is a growing trend towards the use of ‘Total Reward’ strategies among British companies. The poll, conducted in March 2011, showed that 45% of respondents received a benefits package that had been presented to them as a Total Reward scheme – an increase from 29% in 2010. CIPD defines Total Reward as a concept that “encompasses all aspects of work that are valued by employees, including elements such as learning and development and/or attractive working environment, in addition to the wider pay and benefits package.”
Total Reward is considered to be distinct from Strategic Reward, which, according to CIPD, is based on “the design and implementation of long-term reward policies and practices to closely support and advance business or organisational objectives, as well as employee aspirations.” But, says CIPD, strategic and total reward may often work in partnership. “An organisation might adopt a total reward approach encompassing the provision of both cutting edge training programmes together with flexible working options – as well as more traditional aspects of the pay and benefits package, in order to recruit, retain and motivate the high quality staff that are best placed to help it secure its business objectives.”
Changes to benefits packages are being driven by market dynamics in the wider business environment. The Employee Benefits 2011 survey identified the following issues as being instrumental in determining benefits packages last year:

• Improving the perceived value of the benefits package.
• A drive to control costs across the organisation.
• Making benefits expenditure more cost-effective.
• Matching benefits to employee need.
• Ensuring benefits are competitive
• Improving the effectiveness of the benefits package.
• Harmonising benefit terms and conditions across the organisation.
• Drive to reduce costs across the organisation.
• Managing pension costs or deficits.
• Encouraging pension scheme take-up.

These findings illustrate a diversity of considerations for managers responsible for employee benefits, and highlight the tensions between fixed, flexible and voluntary arrangements – as well as the challenges of balancing individual rewards for star performers against the desire for an organisation-wide template.

Feeling the benefit
Traditionally, employee benefits packages generally comprised the usual suspects: pensions, paid holidays and company cars. But today, the benefits market has expanded to include a wide array of arrangements that match the changing needs of modern society. So what kinds of benefits are included in a contemporary Total Rewards plan? The most common benefit is Life Assurance/Death in Service, which seems to be offered to all employees by the vast majority of employers. Alongside this, and perhaps in line with the thinking behind a Total Reward approach, most companies consider training and development to be an employee benefit and, again in the main, provide it to all members of staff. It is arguable whether employees themselves regard this as a significant benefit or simply as a natural and expected aspect of any job of work.

Behind Life Assurance and training and development, the Employee Benefits survey showed that more than two thirds of benefits packages (70%) include counselling/Employee Assistance Programmes (EAPs) – a benefit that appears to reflect modern demands in an era where many individuals are burdened with high levels of debt and stress, as well as being exposed to increasing instances of redundancy. The survey’s authors say that EAPs have now become a mainstay of many employers’ core benefits, having grown in popularity in the past few years. In 2004, only 30% of its survey respondents’ benefits packages included EAPs. Other popular benefits include childcare vouchers, extra holidays for long service and the option of additional voluntary pension contributions.

Outside of the core options, companies offer a wide range of additional benefits to their employees on an all-inclusive or selective basis. Some examples are listed below.

Taxing measures
Some employee benefits attract preferential tax treatment, often in line with government policy to support lifestyle choices – for example, childcare vouchers and cycle-to-work schemes. Alternatively, employees may enter into a salary sacrifice arrangement. Under such agreements, an employee gives up part of his/her gross salary in return for the employer agreeing to provide a benefit. For example, under a pension salary sacrifice arrangement, a member of staff gives up a percentage of their salary while the employer makes an equivalent contribution to the employee’s pension. The employee saves on income tax, while both employer and employee save on National Insurance contributions. However, salary sacrifice agreements may have implications for other provisions such as working tax credits or the national minimum wage. CIPD advises parties considering such arrangements to visit the HM Revenue and Customs website for further information.

Have your say
Has your benefits package changed within the last twelve months? Have you gone from having an enviable rewards scheme to one of the bare minimum after cost cutting measures from your employer? Now in its 11th year, the Pf Company Perception, Motivation and Satisfaction Survey offers those working day-to-day in the medical sales industry the opportunity to vent their frustrations at everything from horrible bosses to a measly bonus package – all behind the shield of anonymity. So, if you’ve had your company car taken away or your pension scheme has been reduced have your say today at www.pharmafield.co.uk/survey. The online survey takes only ten minutes to complete with a donation made to the charity Home from Hospital Care for every completed form.