Changing HR landscape
The evolution of human capital as a concept is significant to the progress of the pharma industry in the changing scenario. Vanessa Mahapatra finds out what human resource managers of pharma companies are building on, in this new era
The pharmaceutical industry is coming to the fore as a knowledge based industry, creating a shift in the HR focus. A decade or two ago, an individual within the organisation was irrelevant, vis-à-vis the growth of the organisation. This notion is experiencing a sea of change with the recent turn of events in the industry. Companies have realised that each individual has an important role to play within an organisation, especially since the industry is becoming more knowledge-oriented. “Knowledge has replaced capital as an important determinant of development. Intellect has become a new form of property,” says N S Rajan, Partner—Human Capital, Ernst & Young.
Focus on HR
According to Rajan the role of a HR professional is that of an alchemist—to bring out gold from those around him
Contrary to the popular belief, pharma industry does not lack HR focus. It has been an integral part of most pharma companies for about two decades. “I started my career with Ranbaxy in 1983. This company had a close HR focus even at that time,” says Rajan. The focus however has been fragmented. Within the organised sector, top rung companies that have the capacity of huge capital investments are the ones which have been looking at HR in a large way. On the other hand, SMEs have been more production driven. Rajan concedes, “Top companies invest in non-core functions while people in the middle of the pyramid are the one who lack this initiative.”
For SMEs, survival becomes paramount and hence, support systems take a back seat. Due to business exigencies, their focus lies largely on business and production, and not so much on the people. “Companies begin concentrating on people-centric initiatives once they have reached a certain stature, size and stability,” says Rajan.
According to another school of thought, superior human resource initiatives are essential for a company to reach that stature, size and stability. “A by-product of good HR focus is organisations with good capabilities, producing better results,” explains Prakash Shanware, President Human Resources, Ipca Laboratories. HR is required for business intelligence and precedes all other functions. The company will not be able to sustain benefits achieved through other functions if it does not have a good HR focus.
A business partner
Human resource is no longer considered an administrative function. “In fact, HR has come to be regarded as a partner to the organisation,” says Rajan. “HR is crucial in an organisation since exceptional HR operations will help a company in ensuring that it has the business intelligence capability platform in terms of skills, knowledge and attributes to deliver,” reiterates N R Munjal, MD, Indswift Laboratories. Therefore most companies are revamping their HR focus to make them more efficient in terms of resource optimisation.
“The role of a HR professional is that of an alchemist—to bring out gold from those around him,” comments Rajan. Considering this, human resource is becoming people-centric. Companies are concentrating on areas like employee morale motivation, training and diagnostics to boost their productivity as it is related to the performance of the organisation. “Management has to be keenly aware of the health of the organisation in order to ensure a conducive and productive environment,” Munjal reiterates the need to focus on employees. Companies are conducting studies in order to ascertain key skill requirements of the company and building them in their employees.
Hitting the peak
Every company attains a saturation point in its growth chart at some point in its life cycle. At this juncture, the organisation seems stabilised in growth, mature in its functions and demonstrates predictable revenues. “When an organisation reaches this level of growth, it tries to take itself to the next level. So it looks at defining competency framework,” says Rajan. This is where the HR managers and employees are geared up for another success cycle. Accordingly, HR management assesses the required host of competencies in the employee group that would take the organisation to a higher level. “We have assessment centres, where we check for a set of competencies in every individual,” he adds. Through these procedures, they recognise eight to ten competencies in every employee, grade them accordingly and look for gaps.
Once the learning curve and the competency level of an employee are ascertained, HR department sets out to bridge gaps. Companies are now looking at inculcating multiple skills in junior level employees by training them in IT skills, soft-skills and English speaking skills. In addition, some companies are equipping their employees with reading and writing skills in various languages. “The idea is to make them think like business managers down the line,” points out Shanware.
Additionally, he says that Ipca does periodic opinion surveys and assessments with the objective of developing people in several areas for the benefit of the organisation. On the other hand, Rajan informs that at the senior level, organisations marry a combination of methods like coaching, action learning, special board driven projects and focussed competency based training. This entails strategic investment of time and money, which would take an organisation to a superior level through development of capabilities and leadership.
The motivating factor
In the age of cut-throat competition and high attrition, every company is striving to provide better incentives to its employees. Employee motivation is the key issue. Changes in the pharmaceutical business environment, within companies and around the world, are bringing forth varied responses among the employee circle, heralding changing expectations. Hence, HR departments are altering their employee managing strategies, communication being a key concern. HR managers have realised the importance of communicating the vision of the organisation, preparing employees on the behavioural front according to the changing future of the organisation.
HR managers are focussing on attracting and retaining skilled people. “Competent people will always give more than average productivity,” says Shanware. However, he comments, “Retaining people is a million Dollar question.” Simply hiring competent people does not suffice as they have greater expectations. Hence, companies are dealing with high profile people differently and addressing their issues separately. At Ipca, Shanware informs that they take care of their star performers by giving them incentives and stock options. Festivals like Diwali are celebrated and there are activities like Ipca Brainvita, a quiz competition on Diwali. The HR department at Ipca also transfers its employees from one location to another to give them an opportunity of growth and work experience in different jobs. “If you have the right kind of people and take care of them, production will come automatically,” remarks Shanware.
Human resource initiatives are still evolving in the industry. “Pharma companies are gradually realising that exceptional HR operations will help them in ensuring that they have the business intelligence capability plat-form in terms of skills, knowledge and attributes to deliver,” comments Munjal.
Currently, 40 percent to 50 percent of pharma companies in the organised sector have a good HR focus. The rest have limited human resource operations due to lack of affordability. Their entire focus is business driven, due to which these companies incorporate only those functions, which are absolutely essential, ignoring most non-core functions. However, this attitude will have to be done away with as superior HR focus could become the driving factor for SMEs. Almost half of pharma companies have already recognised the potential of HR and built upon them. “We started focussing on HR around four years back when the management felt that it was required to take the company further ahead. So we started taking more initiatives on people,” says Shanware. Indswift Labs is also on a major HR expansion spree, informs Munjal.
The core function
The key HR areas that lack initiatives and need more focus in today’s environment are employee retention strategies and development of talented manpower to many crucial positions. Pharma companies have so far been lax about these functions as they lack long-term perspective. Looking ahead, Munjal observes, “HR expansion will be more in terms of reinforcement and will have to focus on compensation with a long-term perspective ensuring a direct link of performance management and rewards.”
The current and future trends indicate that pharma companies now have to focus on effective utilisation of human resources. They have to ensure that HR becomes a significant resource for the company and this can be achieved through training initiatives, developmental strategies and proper employee engagement strategies. In addition to this, recruitment needs to go beyond the pharma industry in order to get newer ideas into the company. “I believe that the CEO’s attention to HR is important. Even in a small company, he should lend the right direction, make right investments, visualise and hence change HR policies by spending time and money on the function and reap its benefits,” says Rajan.
Pharma companies are revamping their HR operations to align them with the changed business needs, keeping in view the rapid expansion of pharma capacities in the country and emerging competition globally.
“Almost all big organisations are looking at HR more seriously as a strategic partner of the business process. It is a positive sign,” concludes Rajan.