RECRUITMENT |
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Recruitment process outsourcing in the lifescience industry
Charles Horth
In a rapidly globalising industry built on the twin pillars of the pharmaceutical and biotechnology sectors, a combination of technological and business skills is the essential “know-how” that can make the difference between success and failure. In a changing world, with financial uncertainty increasing business risk, lifescience businesses have a particular imperative to identify and attract the most talented executives able to rise to the changing demands of a complex infrastructure. Recruitment today, more than ever before, is a highly specialised business process, which requires an approach with depth and breadth. A comprehensive recruitment process taking account of the fine details allows a lifescience organisation to align its staff resources with its business needs.
Contract vs. Conventional Recruitment
Executive search firms or “head-hunters” have been in the vanguard of providing staffing services for the lifescience industry for well over 60 years. However, it’s only comparatively recently, with the parallel growth of outsourcing of clinical research or analytical services to CROs or manufacturing to CMOs, that the concept of an employer outsourcing or contracting out the management and ownership of part or all of its recruiting process came to be appreciated. Rapidly-growing, fast-moving, biotech companies are often under intense pressure to find and employ the technical specialists they require, particularly where the specialist also needs to have appropriate business skills. In the past, biotechs and other specialised lifescience organisations found they had little option but to pay top fees to specialist recruitment agents in order to resource their projects.
An Evolving Business Model
Contract services organisations are particularly appropriate for the needs of a highly competitive, technology-oriented industry where time, quality of service and value for money are the priority issues for management. Companies started to examine how they might reduce the growing expenses of recruitment fees while trying to recruit specialists with a combination of technological and business skills that are the most difficult to find. Faced with this challenge, forward-looking companies began to examine various stages in the recruiting process with a view to outsourcing those issues that they had most difficulty with and could add the greatest value to them. Initially, recruitment process outsourcing (RPO) systems usually involved companies buying lists of prospective candidates from vendors. This function, of searching and researching, identifies employees of their competitors and so increases the number of possible candidates.
A modern RPO operation appropriate for today’s lifescience industry should be designed to find suitably qualified executives both efficiently and consistently. Ideally, recruitment experts will tailor solutions that reduce the need for high-cost recruitment agencies by developing better value and more direct ways to attract people with the talents and skill sets required by businesses. Customised solutions should be scalable while aiming to streamline the recruitment process across the entire organisation with an integrated system harnessing both people and technology.
As in any service-oriented business, an RPO strategy, making better use of technology, improves productivity while also improving the speed of finding (sourcing) the most suitable candidates. As a parallel issue, in many countries active in the global lifescience marketplace, the workforce has become increasingly dynamic as key executives change jobs frequently and there’s a parallel shift towards more contract staff, part-time positions or interim managers taking advantage of a pool of highly experienced executives. These emerging trends are not just increasing recruitment activity but are also stimulating the demand for RPO. This demand, transferred into a global lifescience marketplace, means that the RPO provider has an international presence and is seamless in both its geography and time-zone.
The Challenges of RPO
External activities present companies with a significant management challenge. Any company that fails to define its overall recruitment strategy and objectives may fail to meet its needs. This holds true for outsourced programs like RPO. RPO should be seen as a means of implementing tactical plans that is successful within the terms of a welldefined corporate strategy.
Outsourcing processes can make or break a poor organisational structure. If it’s not implemented properly, RPO can reduce the effectiveness of specialist recruitment. In common with other categories of outsourcing process, a company needs to effectively manage its RPO activities by setting the direction and monitoring performance against agreed KPIs in order to achieve the desired outcome. A recurrent argument against outsourcing is that the aggregated fees charged for recruitment transactions may be greater than the costs of the internal recruitment department. If the two organisations use different accounting systems then there could be an apparent anomaly through not comparing like with like. In comparing costs, there has to be a proper allowance for the value of the fixed assets (the office building, floor space and car-parking) which could be deployed for other core business activities of the company, for example licensing activities.
Putting all recruitment into the hands of one external provider might discourage competition unless multiple recruitment agencies are used. As with outsourcing services providers, a long-term relationship with the customer is one where the partnership is built on trust and successful delivery, whereas initially, the RPO function might be a short-term tactical solution to overcome a critical staffing issue. A RPO solution may not work if the company’s existing recruitment processes are performing poorly or if the service provider has inadequate recruitment processes or procedures to work with the client. However, RPO may not easily resolve a recruitment problem faced by a company when it is perceived negatively by potential employees. This issue has to be resolved by other means, for example public relations and a programme of image alteration.
RPO service providers must tackle the same challenge faced by conventional head-hunters to provide the appropriate candidates required by their customers. Mr Nick Stephens, CEO of RSA, a leading specialist recruitment organisation for the global lifescience industry, described in the Scrip Supplement on “Your Career in Pharma” (September 2007) how a non-specialist head-hunter consistently delivered unsuitable candidates to a pharmaceutical company trying to fill a vacancy. The VP of HR at the pharmaceutical company challenged the head-hunter with the comment, “You keep sending me pharmacists’ CVs and I’m looking for a pharmacologist.” The head-hunter replied, “What’s the difference?”
RPO - A Win-Win Scenario
As with outsourced research or manufacturing, RPO solutions can convert fixed investment costs into variable costs, which vary according to cycles in recruitment activity. With this degree of flexibility, companies may effectively pay per business transaction, rather than by staff appointment. This helps to avoid or minimise the situation where a personnel manager is not used effectively or recruitment staff have to be laid off. RPO offers the customer economies of scale and scope arising from a larger staff of recruiters, databases of candidate biographies, and investment in recruitment tools and networks. Economies of scale means that RPO lowers cost while the scope of breadth and depth facilitates operations as top quality specialists. In short, RPO solutions lead to better quality of service at a lower cost and with a faster delivery.
