CROs engaging in a ‘war on talent’, Quintiles CEO says
Contract research organisations (CROs) have competed with each other for talent in certain areas and geographies for years, a fact that has contributed to the high, and in many peoples’ eyes, problematic, turnover of staff at service providers.
The situation appears likely to be unchanged for the foreseeable future. “We have to be candid. It is truly a war on talent,” Thomas Pike, CEO of Quintiles, said on a quarterly results conference call with investors.
Ciaran Murray, CEO of Icon, used less dramatic language than Pike to convey the same message. “I think it's fair to say the market is tight for some staff in certain areas,” Murray told investors.
As in any market in which demand is outstripping supply, the shortage of staff with certain skillsets is leading to some CRO employees taking home larger and larger pay cheques. “You tend to see a little bit of wage inflation,” Murray said.
Icon hired an additional 400 staff during the fourth quarter, swelling its headcount to 11,700 in the process. Quintiles also reported “an increase in billable headcount” to support the startup of new projects.
The hiring contributed to an increase in service costs at the product development unit, but Quintiles should start to deliver a return on this investment as the projects on which the staff were hired to work take off.
Offsetting costs
Faced with a job market that they can do little to tilt in their favour, at least in the near term, Icon and Quintiles have struck upon similar strategies to manage their wage bills while ensuring they pay the going rate for top talent.
“What we're trying to do is really create the offsets in our business that we can compensate individuals and job categories where there is a war on talent,” Pike said. In essence, the strategy at Quintiles is to move some jobs to low-income countries to free it up to spend more in other areas.
Icon has a very similar approach to managing its wage bill. “We operate in 40 countries and you can kind of mitigate and hedge these things by where you do work and where you locate support functions,” Murray said.
