Pharmaceutical Industry: Finger on the Pulse

aggressive at junior management (field sales level), the multinational and Indian companies converge across all other management levels.

B) Pronounced Functional Premiums and Pay Strategy
The industry has seen a more pronounced functional pay strategy evolve. The functions can be clustered into four types mentioned below n the basis of similar talent and work patterns.
These functional clusters have seen a clear pay differentiation strategy evolve. As tabled below - the transition from 2011 to 2013 shows a sharper differentiation across functional clusters. Cluster 3 and 1 emerge as the functions with premium - Cluster 3 which has all the corporate functions is high on premium as most pharma companies are increasingly looking at other sectors like FMCG, banks, telecom, IT to get talent for support positions; Cluster 1 which has all the R&D and related functions has seen a major talent war within the sector as R&D budgets for most Indian companies have seen a year-on-year growth of 20-40%.

Cluster 2 - manufacturing and associated functions are very region-specific and thereby the compensation is usually driven by the region and its endemic talent pool. This has historically been a function with the highest discount with respect to compensation and continues to be so. Cluster 4, the sales force makes up for the majority of the workforce, especially at the junior levels, and this cluster has been observed to be the one nearest to the level median.
C) Client Considerations
Aon Hewitt interviewed some of the notable C&B professionals of pharmaceutical companies, to understand their thoughts around rewards and the overall business. We have summarized some of the extracts, based on our discussion:

• Some of the organizations have adopted a "wait and watch approach", i.e. while they are optimistic about the future prospects, they would exercise some bit of caution given the larger economic sentiment. They are aligning their existing strategies to cater to the immense growth opportunities, while they are keeping an eye on costs as well
• "Do more with less" is the key message across the board. Having said that, priorities continue to be investment in the form of rewards initiatives (compensation benchmarking, benefits, internal pay ranges, etc.) such that rewards programs keep fueling business transformation
• More transparency and manager involvement: While earlier all strategic discussions were limited to boardrooms, there has been an increasing involvement of managers in the decision-making process. This has led to increased sense of ownership and accountability in the minds of the employees with respect to rewards programs

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