Raised Well in Pharma

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Boehringer Ingelheim built its reputation on a host of small specialty products. Until 2001, that is, when a once-daily inhalable COPD drug burst through its pipeline. Commercializing the drug, Spiriva, would require a massive bolstering of the field force (it now accounts for nearly 35% of company sales). But there was a catch: Boehringer, a family-owned group of companies, lacked a formal, transparent, career-development program, the hallmark of some bigger firms. And that hindered recruitment.

“We saw a need,” says Jim Conklin, Boehringer Ingelheim executive director, human resources. “We had to prepare for a doubling and tripling of our size.”

In December 2004, Boehringer rolled out On Track to Success, a career pathway and leadership development model. On Track's career tools not only enhanced the firm's talent-management process but also gave it a competitive recruiting edge. Today its field-force numbers about 3,200, up from just 1,000 in 2003.

“Boehringer Ingelheim is still not a household word,” Conklin says. “We have to work to get people to come. But when they get here, we have an environment that rewards them.”
While Boehringer's experience is far from unique—others have similar programs—it illustrates the strong link between recruitment and retention in pharma, as well as industry's growing commitment to building HR competencies. Hiring trends confirm it: MM&M's 2006 Career and Salary Survey shows that 75% of the 32 product managers responding were promoted to their positions, up from 53% last year. Among the upper echelons of sales, though, there is still considerable movement between companies. Of 31 sales directors, data show, the percentage of those saying they were promoted to their role dropped slightly to 61% from 69% a year ago. And 58% of 36 sales managers got their job through advancement, down from 62% in 2005.
Nevertheless, the industry is generally regarded as superior in terms of training sales reps before moving them into the field or, in the case of marketing people, assigning them to in-house functional areas.

Sales training
Training for new reps gives pharma companies “a big recruitment advantage,” says Linda Richardson, president of a global sales training and consulting firm that works with companies. “One key to retention and recruitment is to show you'll be developed.” This is demonstrated through new-hire programs that are really a career-development ground for people going into sales. “It's very much a two-way commitment,” says Richardson. While the companies offer training, “they're expecting people to put pencil to paper and do some work.”

Those expectations are set early. Once hired, new recruits enter a kind of boot camp, learning sales skills and product knowledge, first through home study, and then at the company. Then there are the exams. “Anything under 90%, they don't get sent out to the field,” says Carolyn Choh Fleming, a professor of marketing in the graduate and undergraduate pharmaceutical marketing and international marketing departments at St. Joseph's University. “Because you can't fail in front of the doctor. You've got to know your stuff.”

While the bar is high, the reward can be great. Starting pay for a drug rep can approach $65,000, including base compensation of $52,500 plus car and bonus. Not including their salary, Boehringer spends about $50,000 on reps' first six months alone, including travel, meals and lodging during training. That's most likely a conservative estimate compared to some other firms. This raises the risk for employers. “The first year, you don't make any money on the rep,” says Choh Fleming. “If you're a bean counter, you're thinking that's a long-term investment in the person—if they stay with you.”

Curbing churn
Staff development helps curb churn. Reps are surveyed routinely as to whether they want to hone selling skills further or head in other directions. Some firms enable them to earn a Certified Medical Representative (CMR)—a designation for employed reps that is conferred by the non-profit CME Institute upon completion of a self-study program—or, in some cases, an MBA.
Most companies have a “president's club” to reward top producers. Boehringer recognizes the top 20% of sales people with frequent sales contests along with its Extreme Rewards program, which provides gifts and other incentives. Helping keep morale high, its work environment features running trails and a fitness and childcare center for on-site employees. Conklin says some field reps participate in its wellness programs. Sales meetings start Monday afternoon or Tuesday, so that reps don't have to travel on weekends.

According to George Schmidt, senior practice executive (sales practice), Campbell Alliance, companies are focusing more on “middle reps”—those who don't fit the mold of either high or low performers—by giving them non-monetary incentives to stay and boost performance. “One avenue they're approaching to develop [middle rep] skills is career development,” Schmidt says.
Those who succeed in the field, perhaps climbing the rungs to regional and then district manager, are promoted, often to a marketing role. “If a rep performs well and has the right experience, we can add some rotation programs in the home office,” says Janis Lane, human resources director with a focus on sales and marketing, for Eisai.

Rotations can include roles in marketing, sales operations or sales training. Lane says Eisai views its 750 reps as a roving talent pool.

“We generally build on their field experience.” Those who migrate in gain a “very broad experience while here, and they bring field experience into us.”

The firm also maintains an intranet site that shows the competencies employees would need for other positions. “The theme is directions and multi-direction,” Lane says. Indeed, sometimes product managers do what she calls a “reverse rotation” out to the field, although “the marketing area is a pretty coveted one,” so most of the movement flows in the opposite direction. While Eisai disseminates information to reps through national and regional meetings, an in-house position buys access to management and leadership training. Courses and mentoring round out marketers' expertise. Product managers are expected to do a fair amount of “hands-on learning,” says Lane, owing to the fact that “[marketing] jobs are rather broad” and require interfacing with media partners, agencies and the sales force.

Playing the field
Since preparation for sales positions, especially in the current regulatory environment, has become quite standardized, other firms look to so-called non-traditional areas, like advertising and the airlines, for in-house talent. Joseph Shields, who joined Wyeth last year as product director for Enbrel, counts himself part of this diverse employee base. “I have not carried the bag,” Shields says. He worked as a technology consultant in telecommunications, a marketer in the specialty chemicals industry and in broadcast television. During seven years with AstraZeneca and its predecessor companies, management roles took him from external affairs to product PR and e-marketing, and then consumer promotions.

Sales is a rich mine, but “The skill sets for consumer marketing and marketing to managed care are a little different than the skills that someone would pick up from field sales,” Shields says. Also, a vast network of colleagues helps inform marketing efforts. He adds that with the increasing segmentation of physician, consumer and payer marketing—the three main disciplines—“We're seeing a lot more dedication toward the craft of marketing, and a lot less turnover.”

Realization of the need for diversely trained marketing managers has come gradually, says Choh Fleming. After the emergence of DTC drug ads in 1997, and the period of huge growth that followed, pharma realized “we were certainly not as cutting-edge as the packaged-goods industry,” she says. Then again, much of pharma's HR progress has been methodical, mimicking a business process that originated in Japan known as “kaizen.” (Translation: small improvements over time.)

In line with kaizen, companies are trying to instill staff diversity, from a gender, disability and ethnic perspective. The extent to which this has taken hold varies. Eisai requires diversity training as part of its orientation for all employees and aims recruitment ads at diverse communities. Boehringer Ingelheim has taken a broad definition, appointing at the US corporate level a director of diversity and inclusion, with a staff devoted to training managers and other employees. In 2002, HR rolled out to the entire company training on the business case for diversity. Boehringer's field sales unit has its own diversity council.

Merck also has a diversity office and, according to its Web site, extends the commitment to procurement, pursuing suppliers from minority-owned and other business segments. Women make up a third of new execs and candidates for the firm's succession plan and roughly 40% of new managers. At Novartis, 27% of new execs hired in 2004 were female, as were 43% of newly hired managers and supervisors. At Pfizer, managers must ensure that high-potential women and people of color get a talent advancement plan.

In terms of gender, while she sees more men in the graduate marketing program at St. Joe's, the undergraduate marketing class is about 50-50, reports Choh Fleming. “The companies are recruiting just as many women as men.” However, she says, “They have a long way to go.”
With 90,000 reps on the street, industry isn't pulling the personal-selling model, but it is working to refine it. The approval of sophisticated drugs to address small disease populations will give rise to a more finely tuned rep. “We call it the super rep,” Choh Fleming says, “someone extremely well-versed in pharmacology, selling skills, the entire suite of healthcare.” She envisions these über reps having group discussions with doctors, reducing the number of hard-to-come-by sales visits.

But Schmidt says a lot of reps “already carry more than one product in their bag” and that companies would be better off teaching reps the local managed-care situation. “Because there are so many regional differences in managed-care plans, it becomes an extremely complex landscape that's difficult to analyze on a national level.”

Besides, Schmidt says, the industry already has its elite core of detailers: specialty reps. Specialty reps are forming “creative professional partnerships” with doctors. How? It's due to their experience and knowledge level, he says. They tend to be better trained.



SIDEBAR: On track, up close
What competencies does a primary care sales rep need in order to become a district manager? How can a district manager move to marketing? Employees have questions. Boehringer Ingelheim's On Track to Success attempts to answers them. On Track is a framework for career and leadership, designed in 2004 in the midst of an expansion of the firm's sales force. “We felt that the growth of the sales force and the business required a formal, structured and transparent process for career and leadership development,” says Jim Conklin, Boehringer Ingelheim executive director, human resources.

The On Track system was rolled out to sales management first, in late 2004, and then to employees. After managers and employees worked with On Track for much of 2005, Boehringer's management has recently completed placing reps in the new Career Ladder, the career development component. This has been a worthwhile but demanding project, Conklin says.
Career Ladder shows how roles are organized in Prescription Medicines and Boehringer's sales division, offering clear expectations for each job through well-defined competencies and job descriptions. The sales rep career ladder alone includes four levels for each channel.

One of the key tenets of On Track is its transparency. “The information is available,” says Conklin, “to assess yourself against what it takes to build into a position.”

In addition to career development, the system combines tools for performance management—encouraging managers to develop and coach their direct reports—and employee and leadership development, ensuring Boehringer has a strong internal talent pool. The latter includes a curriculum for training new managers.

While the system was designed for reps, Conklin and his colleagues are building On Track II for marketing staff and are aiming for complete roll-out this fall. “We're going to align the two,” he says.


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