Sometimes it is hard to understand how pharmaceutical companies make hiring decisions. There is no doubt that hiring decisions in the pharma world are complex and risky. Still, after helping a countless number of pharmaceutical companies over the last 25 years, sometimes I still just don’t get it.
We all know that hiring decisions are critical to a company’s success. It’s people who make a clinical trial successful. People who make a drug available to patients in need. People who make a pharmaceutical company successful. Yet pharma companies continue to make the same mistakes when deciding when to and what type of resource to hire. Why is this?
The problem becomes crystal clear when you examine how large pharmaceutical and biotech companies (500+ employees) make hiring decisions. Granted, it’s not easy to understand how much work has to get done in the next 6 months let alone looking out 12 months or more. There may be an idea of what the pipeline work will look like. But converting that into number of people needed to do the work given the stops, starts, and delays in bringing a drug to market is not easy. As a result, leaders often develop a weak case for hiring. Instead of using facts and analysis, they typically use one of three following methods for justifying the need to hire:
Going with your gut
Direct reports complain that people are overworked or are unable to complete work before the next project or project phase starts. Based on this, project leaders present this gut feeling case to management about capacity planning and resource managment. Any leader who has made gut-feeling hiring decisions has been burnt by this type of blind trust of their direct reports. Yes, you need to listen to your team but it must be supported by good data and analysis from a practical resource management tool.
Weak Excel Analysis
Excel spreadsheets are often used as a resource managment tool and capacity planning tool to present “facts” and analysis in support of hiring plans in the pharma industry. The problem with this is the “facts” and analysis are done in a vacuum without a consistent method embedded in resource management software. Meaning they only consider their spreadsheet, their function. So, the “facts” and analysis are based on assumptions that are often not true for capacity planning. This can include assumptions around timelines or even the book of work that needs to be completed. Bringing a drug to market is a cross-functional project, it should be planned and executed cross-functionally.
Heavy Old-School Software
Some pharma companies have implemented resource management software to help them understand their cross-functional projects and develop a good case for capacity planning and hiring. However, many times this resource management software has its drawbacks. First, it’s incredibly expensive and does not meet the needs of the nimble cost-effective environment we live in today. Expensive enhancements to the resource management software can be an extra burden, and large central groups are often required to maintain the resource management software.
Second, while such a resource management tool is good for bigger picture resource analyses, it may not be as helpful for individual functions. Functions may still need to keep spreadsheets for capacity planning to understand who is working on what, and this is what drives hiring decisions. And yes, there are often multiple spreadsheets all in different formats. What is the result? If the resource management tool does not support their case, then they just make adjustments in the resource management tool to show the case for hiring.
The three cases above often lead to unnecessary hiring or too much hiring. However, the biggest issue could turn out to be whether your executive team will be able to trust you to make sound hiring decisions in the future. However, all is not lost. You can make effective, fact-based hiring decisions. The next article in this blog series will help you to find out how.