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Best Hiring Practices for Contract Manufacturing Organizations
Outsourcing drug manufacturing to contract manufacturing organizations (CMOs) has become an increasingly popular way for pharmaceutical and biotech companies to utilize on-demand services to improve operational efficiency, avoid capital expenditures, mitigate supply chain risk, leverage additional manufacturing expertise, cut costs, and add more extensive geographic capabilities. According to a recent Mordor Intelligence report, the global pharmaceutical contract manufacturing market was valued at USD 92.314 billion in 2017. By 2023, this market is expected to reach USD 146.41 billion, at a CAGR of 8.08% during the forecast period (2018-2023).
Due to the use of technologies such as single-use bioreactors and other innovative bioprocessing systems, CMOs are becoming sought-after manufacturing partners with pharmaceutical and biotech companies. As a result, CMOs now account for approximately 33% of the biotech/pharmaceutical industry’s costs for manufacturing drug products, and this percentage is expected to increase. A recent study from HighTech Business Decisions finds that 70% of the biopharmaceutical companies surveyed plan to work with additional CMOs in the coming years.
While the sustained growth in CMO outsourcing bodes well for the future of the industry, many CMOs are struggling with staffing bottlenecks as a result of these increases in demand. The fact is that skilled and experienced manufacturing R&D, production operations and process development staff are in high demand and becoming increasingly difficult to find. This is especially true for CMOs located in more rural areas where recruitment challenges tend to be amplified. In this blog, we will discuss some of the issues that are driving staffing bottlenecks in CMOs, along with best practice recommendations for addressing CMO staffing challenges.
CMO Hiring Challenges
Innovation in pharmaceutical drug development, such as the development of personalized medicine with drugs targeted to particular areas in a patient’s body, have created the necessity for complex process technologies in drug manufacturing. From small molecule formulations with time-release features, to personalized genetics and biosimilar equivalents, drugs are becoming more and more sophisticated and thus more difficult to manufacture. This manufacturing complexity is being accentuated by highly engineered drug delivery systems and sophisticated packaging that plays an important role in the effectiveness of the API.
CMOs have responded by developing more advanced technologies to meet these demands such as expanded automation, continuous processing devices, computer-controlled downstream purification, etc. These technologies require highly specialized skills and knowledge that are in high demand.
The CMO hiring bottleneck results from challenges finding specialized staff with skills in areas such as process analytical technology (PAT), quality by design (QbD), and information technology applications such as enterprise resource planning (ERP) and manufacturing execution systems (MES). In addition, specialized staff with a level of scientific understanding combined with manufacturing experience are required in order for CMOs to be able to evaluate if novel drugs developed in R&D are feasible at commercial scale. Additional production staff are also needed to maximize capacity within facilities.
Finding and retaining a well-stocked talent pool of technical and scientific staff is a constant burden on CMO Human Resource (HR) departments. Hiring managers need to accommodate new positions created by growth, natural attrition, promotions, underperforming and retiring staff. This problem is even more acute for smaller CMOs located in rural areas. These CMOs struggle to attract talent due to issues such as an unfamiliar cultural environment, the necessity of employee relocation, difficulty of transferring to a competitor in the future, and potentially lower pay.
Best Practices for Hiring Talent
Due to the fierce competition for experienced and skilled employees, forward-thinking CMOs are investing time and resources into creating a reliable talent pipeline. Some best practice recommendations for CMOs to ensure an adequate supply of talent include:
Map Future Talent Needs. According to data from the US Census Bureau, the US population is aging. The baby boom generation began turning 65 in 2011 and it is estimated that as many as 10,000 baby boomers will be retiring every day through 2029. Strategic planning is therefore more important than ever to attract top talent to your organization. As such, identifying and attracting new talent should be prioritized at the same level as supporting innovation and acquiring new business. It is critical to identify positions that are most important in supporting the company’s anticipated growth and business strategies. Once identified, spend some time developing accurate skills requirements for these positions. Additionally, it is good practice to develop a company organizational chart and do succession planning.
Create a Talent Development Program. Because of the highly-specialized skills and experience required by CMOs in their employees, new hires who need some level of on-the-job training are unavoidable. It is important to have a plan and execution strategy to accomplish needed training. Internships and apprenticeships can also effective methods to develop talent.
Seek Candidates Who Align with Your Culture. Know your company culture and seek candidates that share the same values as your current staff and executives. Part of successful candidate matching is building both soft and hard skills into your job requirements and seeking candidates whose long and short-term goals are aligned with your company’s career progression ladder. For example, individuals that originate from rural communities will likely be more attracted to CMOs in a rural location, as cost of living, quality of life, commute times, etc, will likely be similar to what they are used to.
Create an Employee Value Proposition. Create an employee value proposition (EVP) that defines the benefits that employees gain from working for your organization and make sure it is communicated effectively to prospective employees by displaying prominently on your website, social media and job postings. An EVP can help you improve the quality of your new hires, reduce turnover, recruit passive candidates, resonate more effectively with niche candidates, and refine your recruiting objectives.
Present a Consistent Brand to Candidates. Part of attracting candidates that align with your company culture is effectively and consistently presenting your brand to candidates during the entire evaluation process. What is the experience of the candidate who is going through your hiring process? Make sure all personnel involved in the hiring process are aligned and present the company mission, vision, guiding principles and value proposition in a consistent way.
Create a Streamlined Hiring Process. A lengthy hiring process is not necessary in organizations that are small/mid-sized, as candidates get discouraged, lose their excitement, receive raises/counteroffers, or receive an offer from a competitor in your space. Be sure to design an effective process that is as streamlined as possible, including clear policies on reimbursement for candidate travel expenses post interview. The per diem rates for travel within the continental United States established by the General Services Administration (GSA) for each fiscal year may be a good place to start when establishing your travel reimbursement policy for job candidates.
Additionally, be sure to coordinate vacation schedules of all involved in the hiring process – HR team, hiring manager(s), interview panel, and admin who might book travel for the selected candidates – to keep the evaluation timetable as concise as possible. Use video conferencing to help alleviate time and costs when appropriate.
The Value of External Staffing Agencies
According to a recent PricewaterhouseCoopers survey, two-thirds of manufacturing CEOs place a high priority on building a skilled workforce, yet only 32% have implemented policies to attract and retain top talent. A quality staffing firm can be an invaluable part of a talent recruiting strategy for CMOs. A good staffing firm will have a strong national network to help you source the optimum workforce solution for your company quickly, giving you access to talented employees when and where you need them. In order to be successful in creating an effective partnership with a staffing firm, it is important to clearly define your staffing needs, and perform due diligence in selecting the right firm to meet those needs.
A few of the ways in which recruiters can assist CMOs include:
- Recruiters can offer contract employees to help improve operational agility and reduce costs. This is a great way for companies to create a more flexible staffing strategy.
- Temp-To-Hire service provided by staffing firms allows companies to hire talent on a temporary or contract basis before committing to a full-time hiring decision. This option generally works well for candidates up to 8 years post college.
- Recruiters can save you time by doing a technical screen on candidates to eliminate those that do not meet the level of technical expertise required.
- Recruiters can be invaluable in helping to keep the hiring process streamlined and on track. This is especially helpful in situations where competition for talent is strong.
- Recruiters can provide a second set of eyes to the in-house HR team and dramatically expand their customer’s reach through their network.
- Some firms offer pricing discounts on those roles staffed by the firm to customers who can make hiring decisions quickly to aid in attracting and retaining candidates who are actively interviewing with multiple companies.
- Good staffing recruiters attend niche specific trade events in the region/state where CMOs are located and network with colleges to target specific skills.
- A recruiter can send samples of candidates they are actively working with to give your organization a sense of what the market is paying for the skills you desire on your team.
- Recruiters can help you develop contracts that protect intellectual property (e.g., inventions and discovery) developed by contractors on the job.
The future looks bright for contract manufacturing. With more novel and complex products entering drug pipelines, pharmaceutical companies are increasingly reaching out to CMOs to access process and production capabilities they do not have in-house. The CMO industry has rapidly grown in recent years to become a significant contributor to manufacturing in the pharmaceutical industry, and this trend shows no signs of slowing down. As a result of these trends, CMOs are investing in new capacity, capabilities, and service offerings to address the industry needs.
To meet these demands, it is critical for CMOs to create a strategic plan to develop a reliable talent pipeline that will support growth. A strategic plan is especially important for CMOs who have some inherent disadvantages in attracting top scientific and technical talent – local competitive landscape offering many employment options, rural location, etc. Manufacturers that make investments in developing the skills of their new workers and attracting top talent are proactively positioning themselves to compete effectively in today’s global economy.
Astrix Technology Group is a leading provider of staffing and recruiting services focusing on the Pharmaceutical industry. For over 15 years, our experienced professionals have been engaged in sourcing top talent for the CMO industry. If you are interested in discussing your hiring strategy with one of our experienced Managing Directors, please don’t hesitate to contact us.
Astrix Technology Group is a technical consulting and staffing firm focused on serving the scientific community. With offices throughout the United States, Astrix is dedicated to providing the highest level of quality and service.