Talent Scout
By Mary Hallahan© Pharmaceutical Executive. September 2000.
Gary Kaplan is founder and president of Gary Kaplan & Associates, an international executive search firm. He talks about how to attract and retain talent in the pharmaceutical sector.
MM: Why is talent a hot issue today?
Kaplan: Never have I seen more attention paid to recruiting and retaining people. In the early '90s, we were in a recession. Everyone focused on sizing, reengineering, managing the bottom line, and obsessing about shareholder value. But today, employee recruitment and retention have become strategic objectives. Companies will be inhibited from a growth standpoint, even crippled in terms of day-to-day operations, if they can't find and keep good people.
MM: Why do you describe the talent crunch as a "seismic" situation?
Kaplan: It's the most dynamic labor market in contemporary history. Unemployment has been anywhere from 3.9 to 4 percent - the lowest rate in the past 30 years. And with the aging of the Baby Boomers, we'll soon be left with a work force that lacks the numbers to fill the professional and management positions available.
MM: Who or what is the biggest competition to the pharmaceutical industry for talent?
Kaplan: The market at large. We're not just talking about technology or the so-called "new economy". Pharmaceutical executives are trying to fill positions in finance, marketing, sales, human resources, and legal. People aren't skilled or trained just in pharmaceutical finance or human resources.
They're also looking for the same marketing people as high-grade consumer products companies, like Procter and Gamble - typically, someone coming from a top business school. Furthermore, they're competing against the areas that have always been hot - investment banking and consulting - and dot-coms, too.
MM: How can companies overcome this?
Kaplan: They need a systematic approach to recruitment combined with retention. And they need to build bench strength instead of simply putting band-aids on problems. When you have a key position open, you have to fill it. No question. But are you thinking about the next time? Are you thinking about what you can do internally so you don't need to look outside the company when the position flies open again? Companies should develop an aggressive college recruiting program and hire people in supporting roles who can grow into principal players.
MM: You mentioned that good marketers are constantly being called by recruiters. How can companies get people to stay?
Kaplan: They have to do a really good job of making people feel they matter. It's not only about compensation and equity of compensation and benefits. It's important to make people feel like they're part of the organization, that it's a collegial and collaborative environment.
I am almost dogmatic in my thought process about doing everything in your power to develop talent from within the organization. If you do that, people in the company recognize it, and it has a positive benefit in terms of retention.
In addition, companies have to be really careful about maintaining compensation parity. There are many rich packages today, and companies are deluding themselves that they will remain confidential internally. That will provoke a revolving door.
MM: What are the best hiring practices?
Kaplan: It behooves every company to have a thorough, systematic approach to "management depth assurance". There's no better way to breed loyalty and to bond people to your organization than to have them feel that they're part of the process and that they have opportunity for growth.
On the other hand, if you're growing only from within, you run the risk of becoming stale and out of touch with the marketplace. It's importance to hire external people for certain positions, such as a new group of a new product line. It brings the company an infusion of new thoughts, new ideas, and new approaches.
The best companies are balanced. They do a superb job of promoting from within, hiring people early in their career, and growing them. But they fill positions externally periodically.
MM: How has the Internet revolutionized the job search?
Kaplan: It's very effective from entry level to the lower end of middle management. All the good pharmaceutical companies are aggressively posting jobs on their own sites or using posting services like Monster.com, Headhunter.com, or Medzilla. But companies need to keep sites current and deal with the people responding to them. Otherwise, word will get out that it's a waste of time.
I don't think the Internet is the answer for finding executive talent. Confidentiality is a huge issue. Also, senior-level people have a certain ego. There's a panache to being recruited. You don't want to hustle yourself, because it compromises your negotiating ability. And senior-level execs don't have time to be fishing about their next move.
MM: Can the pharmaceutical industry compete with the dot-com sector?
Kaplan: The bloom is a bit off the rose in the world of Internet-based companies right now. Five percent or so are incredibly successful, but behind that there may be 95 percent that aren't. We're starting to use a phrase - "e-refugees" - in recruiting for people who have stuck their hand in the fire and been burned.
Pharmaceutical companies have many things in their favor. Number one, even though they're incredibly profit-motivated, they appeal to people's desire to do something for humanity. They also enjoy good reputations - they're icons. And they offer stability. When a dot-com fails, it often fails very rapidly. You don't have the genteel treatment that you do in pharma, such as sizable severance packages and outplacement assistance. When a dot-com runs out of money, that's it - you may even have trouble getting your last paycheck.
MM: What do you see on the horizon?
Kaplan: There are potential shortages of people for the near future. What we see today could be the tip of the iceberg. I think that's why the government is looking at boosting immigration quotas.
MM: Any final words of advice?
Kaplan: Companies should make sure they have a world-class human resources function with forward-thinking people who are sensitive to the marketplace and know how to treat and deal with recruiting issues.
It's amazing how many companies don't realize how much damage is done by inadequate human resources departments. The selection of those people should be as crucial as selecting the best and the brightest CFOs, researchers, and marketing people
