As supply chain worries ease up, Big Pharma CEOs have a new top concern: recruiting and keeping employees
As the industry goes through a boom, Big Pharma’s CEOs seem to have realized one thing above the rest: It’s time to reward the people doing the leg work.
KPMG, a Big Four accounting network, has compiled a business confidence report for pharma CEOs for the past few years, and while 2020’s report had top executives soul-searching for answers and predictions amidst a chaotic time, it appears that some normalcy, coupled with the skyrocketing growth of the industry, has restored confidence levels at the top.
After a year filled with demands for higher wages, better working conditions and a more flexible approach to the workplace across nearly every sector of business, Big Pharma CEOs seem to have gotten the message. Across the world, 43% of those surveyed said that how the company rewards and incentivizes people is going to be the company’s top priority over the next three years.
In 2020, just 4% of those surveyed said that was a priority, tied with training and learning opportunities for employees for the lowest priority out of eight options provided. Recruiting people and assessing employee performance was the runaway priority last year, with 25% of CEOs saying so, followed closely by allocating capital and communicating to investors and shareholders.
Pressure surrounding increased wages and the inflation that could come with it is among the top uncertainties for CEOs, according to Ash Shehata, a partner at KPMG, as well as the questions surrounding a return to the office.
“It really is around all industries…and I think you can’t have a CEO outlook conversation without involving the outlook on the physical environment, how people were going back to the office, the new ways of working,” Shehata said in a call with Endpoints News. “So I’d say that to me, that’s one of the biggest areas of opportunities, and also uncertainty. You’re starting to see policies around vaccination requirements, and certainly encouraging people to go back into the office, or offering some combination, a hybrid.”
The top dogs also have an appetite for mergers and acquisitions, with just 4% saying that it is unlikely the company will make an acquisition, and 45% saying that the likelihood is high, outpacing last year’s 38% of CEOs who said the same.
But perhaps the most interesting portion of the report is the part in which CEOs talk about their greatest risks going forward. Last year, amidst the chaos that came with the start of the pandemic, supply chain risk and a return to territorialism were flagged as the two most pressing risks to Big Pharma’s progress. As the pharmaceutical industry’s supply chain has largely held strong throughout one of the industry’s biggest booms, worry among CEOs has eased up, but not totally gone away. About 17% of those surveyed listed the supply chain as a risk, compared to 25% in 2020.
“In the past, we would manage risks quarter to quarter, event by event. Now we’re managing events by the latest variant, and the impact it has on our community, and we are starting to see some supply chain peak and wane based on the environments surrounding Covid,” Shehata said. “I think the issue we’re going to track over the next year … the dynamic of regionalism is really impacting our business. So you might see a peak in the southern states, and that might affect overall volumes to patients procedures, but you might see the western states not have that same amount of impact.”