Despite reducing sales staff in 2011, 50 percent of big pharma companies report still being overstaffed as opposed to just 5 percent of companies in the entire life sciences industry, according to Hay Group's 2011 Pharmaceutical Sales Force Effectiveness Study.
In fact, respondents say they are much more likely to reduce their work forces by 6 percent to 15 percent in 2012 because of the changing needs in the pharmaceutical industry.
"When it comes to staffing and go-to-market models, the gap between big pharma and other players in the life sciences arena is considerable, and it continues to grow," says Matt Gurin, Hay Group's U.S. reward practice leader for life sciences. "Pharmaceutical companies of all sizes have shown a reluctance to shun historically successful sales models and strategies in favor of the more account-based approach needed to succeed in the future. Given the magnitude of change in both the competitive and regulatory landscapes, it is not surprising perhaps that many commercial organizations are proceeding cautiously since it's a strong prescription to both shrink and change at the same time.
"However, for those organizations we know that are tackling the issue at the root level of the system — through employee behaviors, engaging leadership and alignment of measures with the goals of the organization — we believe the rewards will be commensurate with the effort.”
Although 40 percent of respondents say they are focused on implementing a customer-centric approach to sales, which is higher by several points from 2010, there is question as to whether they are providing their sales representatives and managers with the required skills and incentives to do so. Prescription volume is also concerning among pharmaceutical sales organizations as 55 percent of respondents cite it being the primary factor, followed by revenue attainment and market share, each at 21 percent.
Sixty-percent of respondents kept their training budgets the same in 2011 while 27 percent increased training budgets, which is up from 13 percent in 2010. Another 40 percent of respondents say they provide their sales representatives with teamwork training. Sixty percent of respondents provide that teamwork training for managers in managing change.
The survey also finds that hiring decisions typically prefer candidates with "years of pharma industry experience.” Forty percent of respondents say behavioral and interpersonal competencies influence their hiring decisions while only 20 percent say business acumen and scientific experience are the biggest influencers.
"While everyone knows the stories of major players in the industry publicly vowing to make customer satisfaction a priority, our research found customer focus and satisfaction ranked near the bottom of a list of qualitative measures for organizations' sales strategies," Gurin says. "Some key players are beginning to move the needle for sales in the right direction by stepping away from tenure as a qualification for promotion and by shifting focus to providing value as defined by their critical customer segments. In order to excel in the evolving life sciences market, successful organizations will be required to be ambidextrous, to rationalize both the size and activities of their commercial organizations to deliver value not just revenue."