PHARMA IN FOCUS WHITE PAPER: JOB SATISFACTION IN THE AUSTRALIAN PHARMACEUTICAL INDUSTRY April 2016

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1 PHARMA IN FOCUS WHITE PAPER: JOB SATISFACTION IN THE AUSTRALIAN PHARMACEUTICAL INDUSTRY Overview In the past 18 months, the Australian pharmaceutical industry has endured a difficult period with price cuts on drugs, difficulties in getting new drugs listed on the PBS and drugs going off patent. The impact on jobs in the industry in 2015 was harsh according to the Pharma in Focus Industry Trends Forecast White Paper, 44 per cent of large companies reduced staff numbers along with one in four small and medium sized companies. While most companies are planning no further reductions in staff, the unrest in the industry caused by so many job losses is evident in the latest Pharma in Focus Job Satisfaction survey completed in. When the survey results are compared with the previous Job Satisfaction survey completed 18 months earlier, it is apparent that people working in the industry are more prepared to move in 2016 than they were in 2014, and trust between pharmaco employers and their employers has been damaged by the cuts, even for those who managed to avoid the company axe. Job stability The Australian pharmaceutical industry is historically extremely stable, with a large proportion of pharma employees remaining in the industry for their entire career. However, the 2016 Job Satisfaction survey found an increasing trend towards people moving between companies. When compared with the same survey done 18 months previous, the proportion of respondents who commenced work with their current employer in the past year increased from 11 per cent in 2014 to 16 per cent in Medium sized companies employing between 400 and 600 people have the highest proportion of long-term employees with 44 per cent of respondents working for companies in this range having been with the same employer for more than a decade. These also tend to be the most satisfied employees, with 38 per cent saying they are extremely satisfied with their job and a further 47 per cent somewhat satisfied, as well as being the most satisfied with their remuneration. The movement between pharma employers in the past year is likely to have been brought about by the large number of redundancies and job losses experienced in 2015, when almost half of large pharma companies indicated they had reduced staff numbers due to increasing pressure on the PBS. The survey found 40 per cent of Big Pharma survey 1

2 respondents had commenced work with their current employer in the past three years, with less than a quarter having been with their employer more than a decade. Stability in Aussie Pharma Your current employer (2014) Your current employer (2016) The pharmaceutical/healthcare industry (2014) The pharmaceutical/healthcare industry (2016) 0% 20% 40% 60% 80% 100% 12 months or less 1 to 3 years 4 to 7 years 7 to 10 years 10 to 15 years 15+ years The increased movement between companies appears to impact men more than women, particularly those men with long careers in the Australian pharma industry. While women dominate in the 47 per cent of respondents who commenced work with a new employer in the past three years, of those who have been in the industry for more than 10 years and changed jobs recently, men feature. Men who have been in the industry a long time were found to be more likely to consider themselves underpaid than their female counterparts, and have a higher willingness to move to another company - particularly should they be given an attractive offer. Job hunting who is looking The proportion of Australian pharma employees who indicated they would be looking for a new job in the next 12 months fell from 35 per cent in 2014 to 31 per cent in 2016, although a further 43 per cent indicated they would be open to an approach to switch jobs. Only 26 per cent indicated they would not move jobs even if approached, with these tending to be women in well-paid professional positions who have worked in the industry for a long time and, being mostly in their 40s, value stability more than career progression. Almost half of male respondents indicated they would be open to an offer to move, with a further third saying they would actively look to move. Working for a large organisation also increases the likelihood you will be looking for a job this year. More than a third of people working in Big Pharma (companies with more than 600 employees) indicated they would be job hunting in the next 12 months, with most 2

3 hoping to be out in three months either to progress their career or in search of better salary and/or benefits. While career progression continues to be the number one driver of movement within the pharma industry, men were found to be more likely to move to progress their career than women. The search for a better work/cultural environment is far less important than 18 months earlier across both sexes while a better salary is more important for all. The proportion of people looking to change work in search of a better work environment fell from 24 per cent in 2014 to 12 per cent in 2016, while the proportion looking for a new job for a lifestyle change or because they just need a change doubled from eight to 16 per cent. While women are more likely to seek a lifestyle change than men, both sexes are increasingly looking for a job to suit their desired lifestyle, whatever that may be. Women are most likely to seek a lifestyle change in their 30s and 40s (presumably to suit their growing family or their desire to start a family) while men look for a lifestyle change towards the end of their career when in their 50s and 60s. Having been in the industry for most of their lives, these older men are no longer gaining huge satisfaction from their jobs and live with the hope of being tempted away with an attractive job offer. Job satisfaction in pharma Whereas most pharma company employees continue to be satisfied with their jobs, the overall level of satisfied employees has fallen in the past 18 months from 84 to 80 per cent. The most marked decline was in those employees who considered themselves to be extremely satisfied with their job this fell from 31 per cent in 2014 to 24 per cent in Shifts in pharma job satisfaction 53% 56% 31% 24% 8% 10% 6% 8% 3% 3% Extremely satisfied Somewhat satisfied Neither satisfied nor unsatisfied Somewhat unsatisfied Extremely unsatisfied

4 Of those employees who are extremely satisfied, most have been in the industry for a long time and consider their pay to be as good or better than people in equivalent positions. They are more secure in their jobs and value good leadership and a work/life balance more than their less satisfied co-workers. Naturally, these people are not job hunting 95 per cent say they will not be moving companies. Aged predominantly in their 40s and 50s, these extremely satisfied employees mostly work for small and medium-sized pharmacos and enjoy salary packages exceeding $150,000 per annum. Remuneration Women in the Australian pharmaceutical industry continue to earn less than men, according to the Pharma in Focus survey. Overall, 70 per cent of female respondents earned less than $150,000 annually, with more than half earning less than $120,000. In comparison, 51 per cent of men earned less than $150,000 with 34 per cent earning between $150,000 and $250,000 and 15 per cent on salary packages of more than $250,000 per annum. While only one in 20 women have made it into the top earning bracket in Aussie pharma, this is a strong improvement on 18 months ago when none earned more than $250,000. Pharma salaries: men vs women 67% 71% 41% 59% 52% 48% 33% 29% Less than $120,000 $120,000 - $150,000 $150,000 - $250,000 More than $250,000 Men Women Linear (Men) Linear (Women) While men in the top wage bracket come from companies of all sizes, high-earning women all work for companies with more than 200 employees. Unlike the men who are predominantly in senior management positions or in medical affairs roles, successful women are in a range of roles indicating they are more likely to climb to the top in a specialist position than in a general management role. 4

5 Salary satisfaction A rising level of dissatisfaction with salary packages could also be behind the shift towards Australian pharma workforce also being less satisfied with their jobs. While one in 10 respondents thought their salary package was either not great or extremely poor in 2014, 14 per cent were dissatisfied with their pay packet in Conversely, the largest reduction in any category was with those who thought their salary package was very good this fell from 46 per cent in 2014 to 39 per cent in There was also a big increase in people who felt they were underpaid in comparison with the rest of the industry. While 31 per cent of employees considered themselves underpaid 18 months ago, 40 per cent felt they were paid less than others in a similar position when asked the same question in Salary satisfaction % 40% 41% 39% 1% 1% 9% 14% 4% 5% Extremely poor Not great Alright Very good Extremely generous The proportion of people who felt their pay packet was on par with other people in a similar position dropped from 56 per cent to 45 per cent a fall of 11 points with the bulk moving into the dissatisfied category. Again, with salary still considered the most important job factor for pharma employees, this is contributing to the overall rise in employee dissatisfaction throughout the pharma industry. Salary reviews While more than 90 per cent of people working in the pharma industry get a salary review every 12 months, one in 11 people do not get a salary review at all. These people have a significantly higher level of dissatisfaction with their jobs (28 per cent) and with their salary (48 per cent), with two-thirds believing they are underpaid for their work. While spread across a wide range of branded pharma companies of all sizes as well as consultancies, 5

6 many have been in the industry a long time and are invariably middle-aged men. One in five are not in permanent full-time employment, possibly explaining the lack of salary reviews. Clearly feeling insecure and undervalued in their current roles, one in two of these disenfranchised employees plans to look for another job in the next 12 months. Salary packaging what benefits can you expect? 1) Incentive-based bonuses. The proportion of pharma employees with access to a company incentive-based bonus has risen from 66 per cent to 71 per cent in the past 18 months, while the proportion with a personal incentive-based bonus has risen from 50 to 54 per cent. This illustrates the increasing popularity of indexing salaries to both company and personal performance. 2) Flexible work arrangements. With work/life balance continuing to be a strong workplace focus, the proportion of employees with access to flexible working arrangements has risen from 60 per cent in 2014 to 63 per cent in ) Car allowance. Added into the 2016 survey, 60 per cent of employees indicated they had access to a car allowance and 33 per cent designated parking. 4) Parental leave/childcare. The proportion of employees with access to paid parental leave fell from 44 per cent in 2014 to 38 per cent in 2016, although access to childcare rose from three to five per cent. 5) Health benefits. In 2016 we asked pharma employees about their access to health benefits and found 32 per cent had access to a gym and 13 per cent private health insurance. A further 10 per cent had unspecified insurances while Pfizer employees reported being the beneficiaries of a $500 annual Health and Wellbeing Allowance. 6) Professional services. Employee counselling services continue to be one of the most common additional benefits offered in companies, although the proportion of employees citing this benefit fell slightly (58 to 54 per cent). Access to career planning rose from 20 to 24 per cent, while access to a professional development allowance fell from 13 to nine per cent. 7) Additional leave. Providing opportunities for additional leave in pharmacos appears to be dwindling. In 2014, 44 per cent of respondents had access to additional leave and educational leave or assistance. In 2016, only 39 per cent cited having access to additional leave and 26 per cent access to educational leave/assistance. 8) Super and shares. Almost one in three pharma employees have access to higher employer super contributions and share options. Access to these benefits has remained consistent in the past 18 months. 6

7 Salary package Good leadership Work/life balance Flexible hours Job security Opportunities for promotion Office location Social work environment Physical work environment Training Additional leave entitlements What pharma employees want When asked what they valued from their job and their employer, salary continues to come out on top with the highest proportion of pharmaco staff ranking it as their number one job priority. However, good company leadership remains the second strongest factor for pharma employees, growing in priority from 2014 to The rank score for good leadership jumped from 7.5 to 8.8, driven up by Big Pharma employees who clearly rate good leadership as being more important to them than smaller company employees do. Flexible working hours and achieving a work/life balance were equal at 7.1 in While both factors strengthened in 2016, achieving a work/life balance pulled ahead with a score of 8.1 over 7.6 for flexible hours. People working in companies with between 200 and 600 employees put the highest emphasis on a work-life balance. Two factors which also increased in importance significantly in the past 18 months are job security and opportunities for promotion. Rated 6.0 and 5.6 respectively in 2014, they now rate 7.0 and 6.8, illustrating the increasing importance pharma employees are placing on having the choice to stay with a company and to progress their career. Job security rated particularly high for people working in small and medium-sized companies. Opportunity for promotion is most important to those in mid-sized companies Jobs: what's important to pharma people Employees also placed an increasing emphasis on their social work environment and, to a lesser extent, their physical work environment, although these factors rated below the above factors. 7

8 Corporate responsibility The pharma/healthcare industry s report card for its corporate social and environmental responsibility changed little in the 18 months to, with the industry receiving the strongest endorsement for providing equal employment opportunities for women and for being culturally diverse. More than three-quarters of employees gave their employer a positive rating for these two factors, as they did in 2014, although men were more likely to rate their company positively for EEO than women. While 72 per cent of women thought their company had good EEO practices, 81 per cent of men gave their employer a tick for EEO practices. Two in three pharma employees felt the company they worked for fostered honest and transparent communication and positive leadership skills in managers, and while 20 per cent gave their employer a negative rating for these factors, it is apparent that most employers are achieving in the areas of leadership and communication. Uses transparent/honest communication Pharmaco corporate responsibility Is culturally diverse Provides EEO Has a strong social conscience Supports community service Minimises environmental footprint Positive leadership skills in managers Disagree strongly Disagree somewhat Neutral Agree somewhat Agree strongly In the externally-focused areas of having a social conscience, minimising impact on the environment and encouraging staff to engage in community service, pharmaco staff were less enthusiastic. While more than half felt their company was achieving in these areas, this was a significant fall on 18 months previous. In particular, employees were marking their company poorly for their social conscience, with 16 per cent saying their employer did not have a strong social conscience. Men were found to be even less enthusiastic about their company in this aspect than women, with only 49 per cent of men rating their employer positively compared with 61 per cent of women. 8

9 People working in small companies felt their employers had the poorest track record for minimising their environmental impact, while people working in the largest pharmacos were most positive about their employer s efforts in meeting their social responsibilities and supporting community service. Given the industry s focus on the patient and on personalised medicine, it appears work needs to be done to convince staff that their employers actually practice what they preach. Long-term pharma people Of the people who have worked with the same company for more than 10 years, job satisfaction was very high. Despite this, 22 per cent indicated they would be actively looking for work in the next year in search of better pay, career progression or lifestyle. Those looking to move are most likely professional women aged in their 40s working full-time for large branded prescription companies. While women in their 40s who have been with the same company during what was most likely their child-raising years are now most likely to seek a new job, men overall are more likely to change jobs than women. Career progressions continues to be the number one driver of movement within the pharma industry, with men more likely to move to progress their career than women. The search for a better work/cultural environment is far less important than 18 months earlier across both sexes while a better salary is more important for all. Difference in the sexes Men, on average, have been in the pharma industry longer yet are more likely to move between companies than their female colleagues. While 50 per cent of men have been in the industry for more than 15 years, only 40 per cent of women have. Overall, men and women had very similar levels of job satisfaction but women were more satisfied with their salary package than men. One in two women said their salary package was either extremely generous or very good compared with only 37 per cent of men. However, most of these women indicated they thought they were paid the same as their counterparts in similar positions, demonstrating that they did not feel they were singled out for higher pay than others in their position. Men, on the other hand, were more likely to say they were paid more (16 per cent) or less (46 per cent) than people doing a similar job. Men were far more likely than women to not have a salary review. While 13 per cent of men had not had a review in several years, only five per cent of women were in the same position. A third of these men worked in sales. 9

10 Salary package Good leadership Work/life balance Opportunities or promotion Job security Flexible hours Office location Training Social work environment Physical work environment Additional leave entitlements Other benefits Women appear to be far more aware of the benefits offered by their employers than men. In all but two benefits personal incentive-based bonuses and car allowance women had a higher rate of response, indicating either women are offered far more company benefits than men or, more likely, are more aware of benefits available and are willing to make use of them What men and women value Men Women While 33 per cent of men said they had access to paid parental leave compared with 43 per cent of women may be indicative of a difference in company policy towards the sexes, only 46 per cent of men saying they had access to employee counselling services compared with 61 per cent of women and 23 per cent of men having access to a gym compared with 38 per cent of women supports the concept that men are less aware of these benefits. With 38 per cent of women having access to designated car parking compared with 25 per cent of men, this again could be attributed to awareness, or possibly due to more women choosing to drive to the office. While good leadership ranked second as the most valued aspects of a job, women appear to value this more than men. Of those who ranked this factor in their top three job attributes, 60 per cent were women. Women also placed a higher value on flexible hours (42 per cent ranked it in their top three attributes compared with 21 per cent of men). Men, on the other hand, were much more likely to value their salary package, opportunities for promotion and job security. Forty per cent of men ranked their salary as their most important job attribute compared with 33 per cent of women. 10

11 How to get the big money While there is a direct correlation between length of time in the pharmaceutical industry and salary, this is less so when it comes to being with the same employer. People earning more than $250,000 have not spent longer with the same employer than others, suggesting there is good movement at the top end within the industry. A third of top earners have changed jobs in the past three years while another third have been with their current employer for less than seven years. Only 21 per cent have not changed employers in at least 10 years. Money does not, however, buy job satisfaction. High income earners registered the highest level of job dissatisfaction among the income bands with 16 per cent not happy in their jobs; half of these rated their job as extremely unsatisfying despite three-quarters rating their salary as being above average. The more pharma people earn, the more they value good leadership while conversely, the less pharma people earn, the more they value job security. Almost half of low income earners ranked job security among their top three attributes along with 23 per cent of high income earners and just 10 per cent of middle income earners. People earning between $80,000 and $150,000 are most likely to think they are being paid less than other people in the same position. Who is most satisfied Ultimately, everyone wants a job that provides a high level of satisfaction. Looking at who is most satisfied in the Australian pharma industry, women tend to be slightly more satisfied than men, with people in their forties and fifties having a higher level of satisfaction than their younger colleagues. Management does bring satisfaction, with people employed in middle and senior management roles having the highest level of job satisfaction of all the roles, while those working for large companies employing between 400 and 600 people also tend to be more satisfied. Two in three highly satisfied employees think their salary is very good or extremely generous and that they get paid the same or more than people in a similar position, illustrating the importance of salary in contributing to job satisfaction. Highly satisfied employees also have access to a good range of salary benefits and flexible work arrangements. As a result, these people are extremely loyal with 95 per cent committed to their employer with not even a good job offer likely to tempt them away. 11

12 Who is unsatisfied People unhappy in their jobs tend to have been with the same employer for seven to 10 years; to think they are underpaid; and to be significantly more likely to never have a salary review. They have less access to additional benefits than more satisfied employees and place a higher emphasis on flexible hours and achieving a work/life balance. As a result, 87 per cent plan to find a new job in the next 12 months with most eager to move immediately. When asked why they were wanting to move, these dissatisfied employees had a range of answers: Working with too many people with worthless degrees and no experience but think they know it all. Plus, no company loyalty, replied one corporate affairs staffer. Role is under-resourced. I need a break! said a Big Pharma female sales employee while several other women also working in sales were moving for benefits - one specifically to attend overseas medical conferences and for a car allowance while another wanted flexible work arrangements for parents. One woman in business development was venturing out on her own while a male OTC employee said he needed a change in career yet there were no internal opportunities to develop. Conclusion In the 18 months to there was a definite shift in job satisfaction among Australia s pharma employees, which could be linked to what was perceived to be a lack of employer loyalty during the 2015 job cuts. This impacted Big Pharma employees in particular, many of whom indicated they were unsatisfied and looking to move for career or lifestyle reasons. So while Big Pharmacos may believe the pain is over, their employees are now more eager to move on. This shift in attitude amongst Big Pharma staff is also likely to be behind the strengthening in the importance of leadership. The decisions made by Big Pharma leaders in 2015 would have been a strong focus of tearoom discussions, resulting in an increased emphasis on this factor in the workplace. With the pain of 2015 still fresh in the memories of so many people, it is unlikely the fallout will end quickly with instability in the industry continuing - at least for the remainder of

13 About this survey The 2016 Job Satisfaction survey was distributed in and received 345 responses. The survey attracted slightly more female respondents than male, with 55 per cent of respondents being women. The majority (69 per cent) of respondents were aged 30-49, with 26 per cent aged 50 and older. Only five per cent were aged under 30, reflecting the stability of staff working in Australian pharmacos and hence the limited opportunities for young people to enter the industry. In terms of company size, one third of respondents came from large companies with more than 400 employees, 25 per cent from companies with between 200 and 400 employees in Australia, and 40 per cent from companies with less than 200 staff. Almost one in four respondents worked in sales with medical/scientific affairs, marketing and legal/regulatory/government liaison employees making up a further 37 per cent of respondents. Only seven per cent came from senior management. The vast majority of respondents (91 per cent) were full-time employees, with eight per cent working part-time and one per cent as casual. People working for branded pharmaceuticals dominated (64 per cent) while 17 per cent worked for either generic or generic/branded pharmaceutical companies. A further 11 per cent worked for companies with an OTC component. Disclaimer: Pharma in Focus makes no representation to any other person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or information contained herein. Copyright for this publication is owned by Lush Media Pty Ltd. In the event that information contained in this White Paper is used or quoted in papers, reports, or opinions prepared for any other person or organisation, it is agreed that it will be sourced to Pharma in Focus. Analyst/Author: Megan Brodie, Research Manager Copyright 2016 Lush Media Pty Ltd Suite 202, 117 Old Pittwater Rd Brookvale NSW 2100 Ph sales@pharmainfocus.com.au www. pharmainfocus.com.au 13