FINAL Report

A Study on Attrition Rate in Indian Pharmaceutical Sector

A project report submitted as partial fulfillment of the requirement for the degree of Bachelor of Business Administration

Guide: Ms. Poonam Purohit

Submitted By: Karishma Hotchandani

Bachelor of Business Administration Faculty of Commerce The Maharaja Sayajirao University Vadodara 2009 -10

ACKNOWLEDGEMENTI owe thanks to many people who helped and supported me during the writing of this research report. My deepest thanks to Ms.Poonam Purohit,the Guide of the project for guiding and correcting various documents with attention and care. She has taken pain to go through the project and make necessary correction as and when required.

I express my thanks to the Dean of Commerce Faculty, Programme Director and Assistant Programme Director of Bachelor of Business Administration programme, of The Maharaja Sayajirao University of Baroda for extending their support. My deep sense of gratitude to Mr Praharsh Mehta, Vice President HR, Alembic Chemical Works Co. Ltd., for his support and guidance.

Thanks and appreciation to the helpful people of various pharmaceutical companies who spared time to fill the questionnaire and for their support. I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well wishers.

PREFACETalent or human resource is a major asset for any company. Company invest high amount of money for their recruitment, selection & training and what happens to company if these Talents or Employees leave the organization in short while seeking new opportunities. Pharmaceuticals' is a business driven by research. Talented people are, therefore, any pharma company's assets because they are the source of ideas which drives research.They are trying to have their talent management strategies in place to manage and retain their best people. Thus attrition in the Indian pharma sector is one of the biggest challenges for an HR professional.

Most of the employers believe their employees leave them for money reasons. Many a times we have heard people saying, If only I could have paid her more, she would have stayed. Yes, weve lost people because of money, but this research finds that people leave for one major reason and several subordinate ones.The answers is that most people leave their jobs because of their supervisor or team leader! What is it about this workplace relationship that makes it the number one reason so many people leave their jobs. Basically, its a lackof trust, of communication, of relevant and timely feedback, of appreciation, of fair treatment and of information.

Thus people join the organization but leave their bosses

CERTIFICATE OF ORIGINALITY This is to certify that Ms. Karishma Hotchandani, studying in the 6th semester, Third Year under the specialization area of Human Resource Management, has successfully completed her reaserach project as a partial fulfillment of BBA curriculam in the area of Attrition in the Indian Pharmaceutical Sector by undertaking a study in various pharmaceutical companies in and around Vadodara.

Ms. Poonam Purohit (Research Guide) Date: 10th May 2010

TABLE OF CONTENTChapter No. TopicAcknowledgement Preface Certificate of Originality 1. Introduction Terminologies Attrition Costs Reasons for Attrition Life Cycle Approach Calculating Employee Attrition Controlling Growing Attrition Rate The True Picture Causes & Analysis The Brighter Side of Attrition Pharmaceutical Sector Global Pharmaceutical Sector Pharmaceutical Sector in India Pharmaceutical Sector in Gujarat Methodology Results Discussion Conclusion Recommendation References Annexure

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3. 4. 5. 6. 7.

TABLE OF GRAPHSSr. No1. 2. 3. 4. 5. 6. 7. 8. 9.

TopicEmployee Attrition Risk Quadrant Top 20 Biotechnology Co.s in India Size & Growth of Gujarat Pharma Turnover vis--vis India Size & Growth of Gujarat Pharma export vis--vis India Gujarat Capital Investment Gujarat Pharma a SWOT Analysis Gujarat Cluster & Characteristics Gujarat Building Blocks & Key Imperatives Globalization Model for Gujarats Pharmaceutical Industry

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Interpretations of questionnaire into graph are placed in Chapter 4 of the report.

Chapter : 1

Introduction

If employees are to be products, their shelf-lives are getting shorterIn the best of worlds, employees would love their jobs, like their coworkers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave.But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their coworkers, want a change, or because their spouse gets a dream job in another state. So, what does that entire turnover cost? And what employees are likely to have the highest turnover? Who is likely to stay the longest?

Defining Attrition: Unpredictable and uncontrollable, but normal, reduction of work force due to resignations, retirement, sickness, or death. Loss of a material or resource due to obsolescence or spoilage.

Defining Attrition rate:the rate of shrinkage in size or number" Attrition is beginning to significantly affect offshore ROI. Just as businesses faced a scarcity of talented IT resources during the dotcom era, organizations in offshore countries such as India are experiencing similar pains. Skilled employees are hopping

from job to job and taking with them the customer knowledge and technical expertise that any company needs. Their salaries are increasing, along with their perks, benefits, and bonuses. The attrition rate has always been a sensitive issue for all organizations. Calculating employee turnover rate is not that simple as it seems to be. No common formula can be used by all the organization. A formula had to be devised keeping in view the nature of the business and different jib functions. Moreover, calculating attrition rate is not only about devising a mathematical formula. It also has to take into account the root of the problem by going back to the hiring stage.

Attrition Costs:One of the best methods for calculating the cost of turnover takes account expenses involved to replace an employee leaving an organization. These expenses are:

( a ) Recruitment Cost ( b ) Training and Development Cost ( c ) Adminstrative Cost

( a ) Recruitment Cost:

The cost to the business when hiring new employees includes the following six factors plus 10 percent for incidentals such as background screening: Time spent on sourcing replacement Time spent on recruitment and selection Travel expenses, if any Re-location costs, if any and training/ramp-up time Background/reference screening

( b ) Training and Development Cost:To estimate the cost of training and development new employees, cost of new hires must be taken into consideration. This will mean direct and indirect costs, and can be largely classified under the following heads: Training Materials Technology Employee Benefits Trainers Time

( b )Administrative Costs:They include Set up communication systems Add employees to the HR system Set up the new hires workspace

Reasons for attritionIt is not easy to find out as to who contributes and who has the control on the attrition of employees. Various studies/survey conducted indicates that every one is contributing to the prevailing attrition. Attrition does not happen for one or two reasons. The way the industry is projected and speed at which the companies are expanding has a major part in attrition.

Set up ID-cards, access cards, etc

The specific reasons for attrition are varied in nature and it is interesting to know why the people change jobs so quickly. Even today, the main reason for changing jobs is for higher salary and better benefits. While attrition cannot be attributed to employees alone, let us look at some of the possible reasons:

1.Organizational mattersThe employees always assess the management values, work culture, work practices and credibility of the organization. The Indian companies do have difficulties in getting the businesses and retain it for a long time. There are always ups and downs in the business. When there is no focus and in the absence of business plans, non-availability of the campaigns makes people to quickly move out of the organization.

2.Working environmentWorking environment is the most important cause of attrition. Todays Gen Next employees expect a professional approach and an international style working environment. They expect a friendly and learning environment. Employees look for freedom, good treatment from the superiors, good encouragement, friendly approach

from one and all, and good motivation.

3.Job mattersNo doubt the jobs today bring lots of pressure and stress is high. The employees often switch jobs if there is too much pressure on performance or any work related pressure. It is quite common that employees are moved from one process to another. They take time to get adjusted with the new processes while few employees find it difficult to adjust and consequently leave. Monotony sets in very quickly and this is one of the main reasons for attrition. Job hopping is very common among youngsters who look at jobs as being temporary. Another commonly looked option is to move to such other process where there is little or no pressure of sales and meeting service level agreements (SLA). The employees move out if there are strained relations with the sup periors or with the subordinates or any slightest discontent.

4.Salary and other benefitsMoving from one job to another for higher salary, better positions and better benefits are the most important reasons for attrition. The salaries and benefits offered by MNCs are generally higher than their Indian counterparts. The employees expect salary revision once in 4-6 months and if not they move to other organizations. Moving from one job to another for higher salary, better positions and better benefits are the most important reasons for attrition. The salaries and benefits offered by MNCs are generally higher than their Indian counterparts. The employees expect salary revision once in 4-6 months and if not they move to other organizations.

5.Personal reasonsThe personal reasons are many and only few are visible to us. They vary widely from

getting married to relocating for health/family reasons. The next important personal reason is going for higher education. Health is another aspect, which contributes for attrition.The personal reasons are many and only few are visible to us. They vary widely from getting married to relocating for health/family reasons. The next important personal reason is going for higher education. Health is another aspect, which contributes for attrition.

6.PoachingThe demand for trained and competent manpower is very high. Poaching has become very common. The rise in the number of placement agencies has led to a boom in poaching. Most of the organizations have employee referral schemes and this makes people to spread message and refer known candidates from the previous companies and earn too.

7.Employees advocateOne of the main reasons why employees leave companies is because of problems with their managers. An HR professional can be termed an employee One of the main reasons why employees leave companies is because of problems with their managers. An HR professional can be termed an employees advocate and a bridge between top management and employees at all levels. There is often a huge gap between HR professionals and employees in terms of understanding challenges and delivering requirements. HR sometimes does not really understand the problems associated with employees careers and jobs. The companys overall plans and strategies also depend on HR professionals as they voice employees problems and requirements. The HR department should have genuine interest in the employees welfare; it is responsible for

making sure that their expectations are met. By doing this it is easier to me eet the companys business targets.

A Lifecycle ApproachThe key to long term results against attrition is a comprehensive approach that attacks all of the root causes of attrition across the agent lifecycle. Attrition occurs at all stages, often for different reasons.

Understanding attrition risk across the agent lifecycle is achieved by looking at a combination of performance and fit of current employees. The following chart lays out a method for assessing attrition risk. In this model job performance is based on performance against key matrices and fit is based on personality traits and cognitive abilities. Personality traits and cognitive abilities are hard-wired and have the largest impact on long-term success and attrition.

Employee Attrition Risk Quadrant

Poor Performance, Poor FitEmployees in this quadrant represent the highest attrition risk. Poor performance combined with poor job fit results in highly early attrition rates during new hire training, nesting and the first 90 days on the floor. This quadrant is typically filled with new hires when a hiring process is not optimized for attrition. A typical response to this risk is to add assessments to the hiring process. Knowlagent survey illustrates this trend as centers addressing attrition use assessments twice as often as those who have not yet dealt with the issue. But pharmaceutical sector need to be diligent to avoid using assessments to automate an ineffective, manual hiring process. To truly change the hiring process, they must first determine the most critical areas impacting attrition and assess candidates against them. In this way candidates with the least chance at success are eliminated from the process. This is in contrast to using best overall fit as a gauge since it tends to mask critical gaps in personality, cognitive ability and skills. Additionally, since unclear job

expectations was highly ranked as a causal factor by respondents, a standardized way of setting realistic job expectations should be integrated into the hiring process. Other actions that may be taken in this quadrant are: Moving high risk agents to more suitable roles, if movement within the organization is possible. Where possible, building skills and mitigating fit gaps that may respond to coaching and training among these existing agents. After this highest risk category is addressed, a lifecycle approach to attrition would mean turning attention to the quadrants with lower risks. The makeup of the agent population will change overtime as natural attrition occurs, but specific actions may be needed based on the concentration of agents in the other quadrants.

Poor Performance, Good FitAgents in the lower right quadrant are typically a medium attrition risk. This quadrant may be home to many new hires before adequate training and coaching are provided if a hiring process is effective. Specific action items for new hires are: Provide tailored new hire training plans based on agents existing skills Provide opportunities for safe practice before interacting with customers Provide tailored coaching and training plans for nesting and post-nesting environments Targeted training and coaching can also be used to improve existing agents skills in this quadrant.

Good Performance, Poor Fit

Agents in the upper left quadrant are a medium attrition risk due to poor fit. The majority of agents in this quadrant cannot be moved to the upper right quadrant without a position change. It is not possible to change an agents underlying traits, but training and coaching can be used to mitigate fit gaps in conjunction with other incentives to reduce attrition risk. The best chance for retention is to look for opportunities in other call center positions that are a better fit.

Good Performance, Good FitAgents in this quadrant are a low attrition risk. Continue to train and positively coach these agents since a good-fit agent who is not provided with appropriate training and coaching can slip down into the lower right quadrant if the job changes without adequate training. An agent in this upper right quadrant can move to the upper left quadrant if job responsibilities substantially change and he/she does not have the underlying traits to perform the job. This situation is possible in many centers transitioning from a service only to service and sales model.

Associated costs with high AttritionTalent cost:It includes the cost of lost knowledge, skills and contacts that the person who is leaving is taking with them out of your door.

Recruitment cost-The cost of advertisements; agency costs; employee referral costs; internet posting costs. -Calculate the cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found. -Cost of the various candidate pre-employment tests to help assess candidates' skills, abilities, aptitude, attitude, values and behaviors.

Training cost-It includes the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. -It also consists of the training. -Calculate the cost of various training materials needed including company product manuals, computer or other technology equipment used in the delivery of the training.

Motivational cost:It refers to the cost arises because of motivating the other employees to retain them in the organization in terms of increasing their salary and time.

Lost Productivity Costs:As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive.

Calculating Employee AttritionThe high attrition rate in the industry has always been the greatest concern, and a subject of much analysis and debate. Organizations use different methodologies for calculating their turnover rate. It is a known fact that turnover calculation is a grey area which does not always depict the true picture. While a few techniques are common, there are no proven theories. Furthermore, the approach to this calculation might vary from organization to organization. Disclosure of the figure not only has a direct impact on the business, but also affects employee morale and productivity. Significantly, it might also trigger off a chain reaction-a high attrition rate will lead to more people leaving the organization, while a lower rate will act as a retention strategy. It is not surprising that most industry observers are skeptical when organizations disclose their employee turnover. A high attrition reflects poorly on an organizations ability to hold on to its people. Unfortunately, attrition is viewed as a management flaw, when in fact; it could well be a recruitment error. In some cases it can be simply seen as an organizations competitor appreciating its quality of hires and the output, post-training-almost a backhanded compliment! Ideally, attrition should be calculated on a monthly basis for companies that have over 50 employees for the first five years of its business. Subsequently, a quarterly index should be applied till a company's 10th anniversary. Post this, annual attrition figures should be measured and accounted for. This is optimal within the services industry as companies tend to have different challenges at different stages of their business life-cycle, and also maturity achieves stability around a company's 10th anniversary.

Different theoriesThe attrition rate remains a debatable area, as there is no standard formula to calculate it. A few of them are listed below: The employee base changes each month. So if a company has 1,000 employees in April 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as 1,500 (average for the year). If the number of employees who left is 300, then the attrition figure could be 15% or 20% depending on what base you take. Many firms may not include attrition of freshers due to higher studies or attrition within three months of joining. In some cases attrition of poor performers may also not be treated as attrition. Essentially the attrition number is also a PR or stock/analyst statement and is prone to 'dressing' up.

Varied theories are also applied as organizations like to brand themselves differently as far as their HR and recruitment strategy is concerned. Each company positions itself uniquely in a common market place on account of having exceptional HR policies, procedures and management styles that directly impact retention or attrition and hence the absence of a homogenous system. Also, in scenarios where a common attrition measurement formula is applied, companies find a way to justify their results to position their statistics differently from their peers on account of having differing operating practices.

Formula for AttritionWhile different organizations follow different formulae for calculating attrition depending on their size and nature of services, some of the commonly used formulae to calculate attrition are as follows:

1.) Attrition Rate = (No of employees resigned/Average manpower)*100 where, Average Manpower = (Opening Manpower + Closing manpower)/2 (opening/closing manpower could be either the calendar year beginning or financial year beginning whichever followed)

2.) Attrition = employees left * 100 / (opening balance in a month + number of employees joined in a month + number of employees left + no of employees at the end of the month

3.) Attrition = (No. of employees who left in the year / Average employees in the year) * 100.

Controlling Growing Attrition Rate1. Offer fair and competitive salaries. Fair compensation alone does notguarantee employee loyalty, but offering below-market wages makes it much more likely that employees will look for work elsewhere. In fact, research shows that if incomes lag behind comparable jobs at a company across town by more than 10 percent, workers are likely to bolt. To retain workers, conduct regular reviews of the salaries you offer for all job titles entry-level, experienced staff and supervisory-level. Compare your department's salaries with statistically reliable averages. If there are significant discrepancies, you probably should consider making adjustments to ensure that you are in line with the marketplace.

2. Remember that benefits are important too. Although benefits are nota key reason why employees stick with a company, the benefits you offer can't be markedly worse than those offered by your competitors

3. Train your front-line supervisors, managers and administrators. It can't be said often enough: People stay or leave because oftheir bosses, not their companies. A good employee/manager relationship is critical to employee satisfaction and retention. Make sure your managers aren't driving technologists away. Give them the training they need to develop good supervisory and people-management skills.

4. Clearly define roles and responsibilities. Develop a formal jobdescription for each title or position in your department. Make sure your employees know what is expected of them every day, what types of decisions they are allowed to make on their own, and to whom they are supposed to report.

5. Provide adequate advancement opportunities. To foster employeeloyalty, implement a career ladder and make sure employees know what they must do to earn a promotion. Conduct regular performance reviews to identify employees' strengths and weaknesses, and help them improve in areas that will lead to job advancement. A clear professional development plan gives employees an incentive to stick around.

6. Offer retention bonuses instead of sign-on bonuses. Workerlongevity typically is rewarded with an annual raise and additional vacation time after three, five or 10 years. But why not offer other seniority-based rewards such as a paid membership in the employee's professional association after one year, a paid membership to a local gym after two years, and full reimbursement for the cost of the employee's uniforms after three years? Retention packages also could be designed to raise the salaries of technologists who become credentialed in additional specialty areas, obtain additional education or take on more responsibility. Sign-on bonuses encourage technologists to skip from job to job, while retention packages offer incentives for staying.

7. Make someone accountable for retention. Measure your turnoverrate and hold someone (maybe you!) responsible for reducing it. In too many workplaces, no one is held accountable when employees leave, so nothing is done to encourage retention.

8. Conduct employee satisfaction surveys. You won't know what'swrong ... or what's right unless you ask. To check the pulse of your workplace, conduct anonymous employee satisfaction surveys on a regular basis. One idea: Ask employees what they want more of and what they want less of.

9. Foster an environment of teamwork. It takes effort to build aneffective team, but the result is greater productivity, better use of resources, improved customer service and increased morale. Here are a few ideas to foster a team environment in your department: Make sure everyone understands the department's purpose, mission or goal. Encourage discussion, participation and the sharing of ideas. Rotate leadership responsibilities depending on your employees' abilities and the needs of the team. Involve employees in decisions; ask them to help make decisions through consensus and collaboration. Encourage team members to show appreciation to their colleagues for superior performance or achievement.

10. Reduce the paperwork burden. If your technologists spend nearly asmuch time filling out paperwork, it's time for a change. Paperwork pressures can add to the stress and burnout that employees feel. Eliminate unnecessary paperwork; convert more paperwork to an electronic format; and hire non-tech administrative staff to take over as much of the paperwork burden as is allowed under legal or regulatory restrictions.

11. Make room for fun. Celebrate successes and recognize when milestonesare reached. Potluck lunches, birthday parties, employee picnics and creative contests will help remind people why your company is a great place to work.

12. Write a mission statement for your department. Everyone wantsto feel that they are working toward a meaningful, worthwhile goal. Work with your staff to develop a departmental mission statement, and then publicly post it for everyone to see. Make sure employees understand how their contribution is important.

13. Provide a variety of assignments. Identify your employees' talents andthen encourage them to stretch their abilities into new areas. Do you have a great "teacher" on staff? Encourage him/ her to lead an in-service or present a poster session on an interesting case. Have someone who likes planning and coordinating events? Ask him to organize a departmental open house. Know a good critical-

thinker? Ask him/ her to work with a vendor to customize applications training on a new piece of equipment. A variety of challenging assignments helps keep the workplace stimulating.

14. Communicate openly. Employees are more loyal to a company whenthey believe managers keep them informed about key issues. Is a corporate merger in the works? Is a major expansion on the horizon? Your employees would rather hear it from you than from the evening newscast. It is nearly impossible for a manager to "over-communicate."

15. Encourage learning. Create opportunities for your technologists to growand learn. Reimburse them for CE courses, seminars and professional meetings; discuss recent journal articles with them; ask them to research a new scheduling method for the department. Encourage every employee to learn at least one new thing every week, and you'll create a work force that is excited, motivated and committed.

16. Be flexible. Today's employees have many commitments outside their job,often including responsibility for children, aging parents, chronic health conditions and other issues. They will be loyal to workplaces that make their lives more convenient by offering on-site childcare centers, on-site hair styling and dry cleaning, flexible work hours, part-time positions, job-sharing or similar practices. For

example, employees of school-age children might appreciate the option to work nine months a year and have the summers off to be with their children.

17. Develop an effective orientation program. Implement a formalorientation program that's at least three weeks long and includes a thorough overview of every area of your department and an introduction to other departments. Assign a senior staff member to act as a mentor to the new employee throughout the orientation period. Develop a checklist of topics that need to be covered and check in with the new employee at the end of the orientation period to ensure that all topics were adequately addressed.

18. Give people the best equipment and supplies possible. No onewants to work with equipment that's old or constantly breaking down. Ensure that your equipment is properly maintained, and regularly upgrade machinery, computers and software. In addition, provide employees with the highest quality supplies you can afford. Cheap, leaky pens may seem like a small thing, but they can add to employees' overall stress level.

19. Show your employees that you value them. Recognize outstandingachievements promptly and publicly, but also take time to comment on the many small contributions your staff makes every day to the organization's mission. Don't forget these are the people who make you look good!

Employee attrition continues to affect organizations large and small, local and multinational and may impact the growth and prosperity of the company. Similarly, the exit of experienced fund managers also affects the performance of the fund temporarily as the style differs from one fund manager to another. Intimate knowledge about the corporate world is very vital for the fund The employee attrition problem is a global issue and at times may be difficult to manage but can be tackled by careful planning and well thought out proactive HRD policies.

The True PictureThe attrition rate that is generally disclosed by most organizations does not always show the correct picture. This is because the figure has direct impact on stock markets, employee morale and customer confidence. Attrition rate has always been a sensitive issue for all organizations as it can have major fallout on the bottom-line. This is because the attrition rate is an indicator to many things intrinsic to the organization, and revealing it may affect it negatively. In fact at times, disclosing this data can be like a self-fulfilling prophecy-if you tell the fact that the attrition is high, it may actually become higher. It is also not uncommon to find companies proclaiming an attrition rate that is much less than the others in the industry or their competitor's turnover rate. Companies often project their attrition rate incorrectly as it tends to affect their brand image both internally and externally. Internally, it sends a wrong signal to their employees and the board of members and externally, it can affect in various ways such as developing a bad image or dissuading talent. However companies do not realize that hiding their attrition rate is never a solution in reducing the same.

Cause & analysisCalculating employee turnover is not a matter of simple mathematical method. It is necessary to take into account the root of the problem, by going back to the hiring stage. Most organizations in practice do not evolve robust measurements for calculating cost of a bad hire or labor turnover. The detail of information required and the measurement metrics are not common formulae, but have to be designed dependent on the nature of business and function. As a result most organizations do not intend to mislead by disclosing statistics which may not be true, it is just that perhaps they believe those to be true.

Organizations will however know what their real attrition figures are as this has a huge impact on business. Like with most data, attrition too can be interpreted in different ways and it is up to each organization how and what they wish to share. Organizations are generally much concerned about regretted voluntary attrition. These are people who leave at their own will and those whom the organization would have loved to retain. Similarly, organizations measure managed attrition. These are people made redundant, laid off or exited. Though managed attrition is non-regretted by the organization, the trend of managed attrition if on the higher side may show the organization in poor light and does have an impact on the organizations health.

Attrition does not only reflect the hiring policies of an organization, but also induction and retention strategies, training methodologies, work culture and many other factors. It

costs the company valuable time, money and often credibility (especially where employees develop relationships with customers). Some companies just look at the employee turnover in terms of the cost involved in the hiring and training of the individuals. While others look at the opportunity lost and cost.

Organizations aim to reduce voluntary attrition of productive employees and encourage unproductive staff to leave its fold. It makes way for career progression, new thinking and innovation.

The Brighter Side of Attrition

Some employee turnover positively benefits organizations. This happens whenever a poor performer is replaced by a more effective employee, and can happen when a senior retirement allows the promotion or acquisition of welcome 'fresh blood'. Moderate levels of staff turnover can also help to reduce staff costs in organizations where business levels are unpredictable month on month. In such situations when business is slack it is straightforward to hold off filling recently created vacancies for some weeks

Chapter : 2 Pharmaceutical SectorTalent or human resource is a major asset for any company. Company invest high amount of money for their recruitment, selection & training and what happens to company if these Talents or Employees leave the organization in short while seeking new opportunities. Pharmaceuticals' is a business driven by research. Talented people are, therefore, any pharma company's assets because they are the source of ideas which drives research.They are trying to have their talent management strategies in place to manage and retain their best people. Thus attrition in the Indian pharma sector is one of the biggest challenges for an HR professional.

For the purpose of research work and clearly understanding the pharmaceutical sector, I have segmented the sector into 3 categories; they are:

( a ) Global Pharmaceutical Sector ( b ) Pharmaceutical Sector in India ( c ) Pharmaceutical Sector in Gujarat

Global Pharmaceutical SectorAccounting for two percent of the world's pharmaceutical market, the Indian pharmaceutical sector has an estimated market value of about US $8 billion. It's at 4th rank in terms of total pharmaceutical production and 13th in terms of value. It is growing at an average rate of 7.2 % and is expected to grow to US $ 12 billion by 2010.

Over the last two years the pharmaceutical market value has increased to about US $ 355 million because of the launch of new products. According to an estimate, 3900 new generic products have been launched in the past two years. These have been by and large launched by big brands in the pharma sector. And in the year 2005 Indian pharmaceutical companies captured around 70% of the domestic market.

As in the present scenario, only a few people can afford costly drugs, which have increased price sensitivity in the pharmaceutical market. Now the companies are trying to capture the market by introducing high quality and low price medicines and drugs.

With the Product Patent Act, which came into action in January 2005, this industry is able to attract big MNCs to India. Earlier these big firms had apprehensions in launching new drugs in the Indian market.

At present, a large number of Indian pharmaceuticals companies are looking for tie-ups with foreign firms for in-license drugs. GlaxoSmithKline is among the top choices for the firms that wish to launch their product in India, but do not have any branch over here.

Contract research and pharmaceutical outsourcing are the new avenues in the pharmaceutical market. Contract manufacturing is growing at a very fast pace and is estimated to grow to US $30billion, whereas contract research is estimated to reach US$6-10 billion.

Indian multinational companies like Dr.Reddy's Lab, Cipla, Ranbaxy, etc have created awareness about the Indian market prospects in the international pharmaceutical market. Approvals given by Foods and Drugs Administration (FDA) and ANDA (Abbreviated New Drug Application)/DMF (Drug Master File) have played an important role in making India a cost-effective and high quality product manufacturer. Furthermore, the changes that took place in the patent law, change of process patent to product patent, have helped in reducing the risk of loss for intellectual property.

SWOT Analysis of Pharma SectorStrength:

Cost effective technology Strong and well-developed manufacturing base Clinical research and trials Knowledge based, low- cost manpower in science & technology

Proficiency in path-breaking research High-quality formulations and drugs High standards of purity Non-infringing processes of Active Pharmaceutical Ingredients (APIs) Future growth driver World-class process development labs Excellent clinical trial centers Chemical and process development competencies

Weaknesses:

Low Indian share in world pharmaceutical market (about 2%) Lack of strategic planning Fragmented capacities Low R&D investments Absence of association between institutes and industry Low healthcare expenditure Production of duplicate drugs

Opportunities:

Incredible export potential Increasing health consciousness New innovative therapeutic products Globalization

Drug delivery system management Increased incomes Production of generic drugs Contract manufacturing Clinical trials & research Drug molecules

Threats:

Small number of discoveries Competition from MNCs Transformation of process patent to product patent (TRIPS) Outdated Sales and marketing methods Non-tariff barriers imposed by developed countries

The Following is a list of twelve largest pharmaceutical companies ranked by revenue as of March 2010 according to their released 2009 reports. Rank Company Country Total Revenues (USD millions) 61,897 50,009 45,304 44,421 44,267 40,870 32,804 30,765 27,428 22,297 21,836 18,808

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Johnson & Johnson Pfizer Roche GlaxoSmithKline

United States United States Switzerland United Kingdom Novartis Switzerland Sanofi-Aventis France AstraZeneca United Kingdom Abbott Laboratories United States Merck & Co. United States Bayer HealthCare Germany Eli Lilly United States Bristol-Myers United States Squibb

Indian Pharmaceutical SectorThe Indian pharmaceutical industry is a success story providing employment for millions and ensuring that essential drugs at affordable prices are available to the vast population of this sub-continent. - Richard Gerster The Indian Pharmaceutical Industry today is in the front rank of Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of medicines, Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control.

The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories and an increasing balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities, supported by Intellectual Property Protection regime is well set to take on the international market.

SWOT Analysis of the Indian Pharmaceutical Sector Strengths: Low cost of production. Large pool of installed capacities Efficient technologies for large number of Generics. Large pool of skilled technical manpower. Increasing liberalization of government policies.

Opportunities: Aging of the world population. Growing incomes. Growing attention for health. New diagnoses and new social diseases. Spreading prophylactic approaches. Saturation point of market is far away. New therapy approaches. New delivery systems. Spreading attitude for soft medication (OTC drugs). Spreading use of Generic Drugs. Globalization Easier international trading.

New markets are opening.

Weakness: Fragmentation of installed capacities. Low technology level of Capital Goods of this section. Non-availability of major intermediaries for bulk drugs. Lack of experience to exploit efficiently the new patent regime. Very low key R&D. Low share of India in World Pharmaceutical Production (1.2% of world production but having 16.1% of world''s population). Very low level of Biotechnology in India and also for New Drug Discovery Systems. Lack of experience in International Trade. Low level of strategic planning for future and also for technology forecasting.

Threats: Containment of rising health-care cost. High Cost of discovering new products and fewer discoveries. Stricter registration procedures. High entry cost in newer markets. High cost of sales and marketing. Competition, particularly from generic products. More potential new drugs and more efficient therapies.

Switching over form process patent to product patent

Top 20 Biotechnology Companies in IndiaRank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Company Biocon Serum Institute of India Panacea Biotec Venkateshwara Hatcheries Mahyco Monsanto Novo Nordisk Rasi Seeds Aventis Pharma Bharat Serums Chiron Behring Vaccines GlaxoSmithKline Indian Immunologicals Shantha Biotechnics Novozymes Eli Lilly and Company Wockhardt Bharat Immunological & Biological Corp. Bharat Biological International Advanced Biochemicals Biological E Revenue (Rs. Crore) 646 565 217 188 166 135 87 84 81 78 78 72 70 69 68 67 53 41 40 36 Revenue (USD millions) 148.6 129.9 50.0 43.2 38.3 31.0 20.0 19.4 18.6 17.9 17.9 16.6 16.1 15.9 15.7 15.4 12.3 9.4 9.1 8.3

USD 1 = Rs. 43.5 Source: BioSpectrum Top 20: A threshold crossed

Gujarat Pharma IndustryBrief overview of the evolution of Gujarats Pharma IndustryAlembic Chemical Works Co. Ltd., one of the oldest pharmacompanies in India, was set up in Vadodara in 1907, just six years afterIndias first domestic pharmaceutical unit Bengal Chemical and Pharmaceutical Works was set up in Calcutta. Srabhai Chemicals was started soon thereafter.

The industry had received strong support from the academic fiels. In 1940, the Drugs Laboratory in Vadodara was established, followed by LM College of Pharmacy. Further in 1989, the B.V. Patel Education Trust, Ahmedabad and Gujarat Branch of Indian Pharmaceutical Education and Research Development (PERD) Centre in Ahmedabad.

In the last few decades, the invested capital to labour ratio has risen significantly. The employment almost doubled between 1978-80 and 1997-98. over the years, the industry has developed strong linkages with related sectors and industries such as chemicals, pharma machinery, information technology,etc.

There are currently approximately 3,500 drug manufacturing units in Gujarat. The state houses several established companies such as Torrent Pharma, Zydus Cadila, Alembic, Sun Pharma,Claris, Intas Pharmaceuticals and Dishman Pharmaceuticals, which have operations in the worlds major pharma markets.

Over the last few years, Gujarats contribution in the growth of Indias pharmaceuticals industry has been significant. The state commands 42 percebt share of Indias pharmaceutical turnover and 22 percent share of exports. Approximately 52,000 people are employed in Gujarats pharmaceutical sector,which has witnessed 54 percent CAGR in capital investments over the last three years.

Gujarats pharma industry: Some key statistics and comparison with the Indian Pharma IndustrySize and Growth of Gujarats pharma turnover vis--vis India

Size and Growth of Gujarats export vis--vis India

Gujarat Pharma a SWOT analysis

Clusters:A cluster is defined as a geographically proximate group of companies and associated institutions in a particular field, linked by commonalities and complementarities.

For any successful industry, one of the driving forces is the pressure of Small and Medium scale Enterprises (SMEs). A peculiar characteristic of SMEs is that, generally they exist and thrive in clusters.

Building Blocks and Key ImperativesThere are certain building blocks that help industries flourish. Gujarats pharma industry is good examples of a well-developed ecosystem with strong building blocks that have helped the industry grow at such a phenomenal pace.

Creation of a Global Pharmaceuticals HubGujarat, an established manufacturing base for bulk drugs and formulations- with its inherent competitive advantage- is poised to capture emerging global opportunities to become a global pharmaceuticals hub. Emergence of SEZs is likely to create a pharma behemoth- with scale and infrastructure on par with international standards, that will enable it to compete in the global market place.

The availability of a well-developed chemicals industry, which has strong linkages with pharma AP/intermediates, can be utilized to boost the high growth of CRAMS sector. This could make Gujarat a strong sourcing base for global pharma companies.

Emerging OpportunitiesMedical Tourism: With India rapidly emerging as an attractive medical tourism hub,Gujarat is also making big strides in this segment. It is fast competing with other places such as Delhi, Maharashtra and Andhra Pradesh in this segment. The state offers high quality and specialized healthcare services and infrastructure at very low costs, thus making it a preferred destination for medical tourism. Gujarat has highly qualified specialists particularly in the ophthalmology, urology, embryology, orthodontics, oncology and orthopedics therapeutic areas. It also offers other advantage such as English-speaking healthcare personnel, no waiting periods for treatment, and high standards of international transport.

Contract Research Organizations: Gujarat is home to approximately 40 percentageof CROs in the country. Its well established healthcare sector,strong infrastructure facilities and relatively real estates costs has lured many global and local CROs to set up shop in the state. Globally, contract research is a high growth segment led by establishing a strong ancillary services industry base-such as bio-informatics and clinical data management centres-which can facilitate and boost R&D and other high-end activities.

Pharmacetical Machinery: There is a strong local and global opportunity for Gujaratin the manufacturing of pharmaceutical machinery, given its strong and well established engineering sector. According to industry estimates, approximately 35-40 percent of

Indias pharmaceutical machinery is produced in Gujarat. The strong growth prospects of the pharmaceutical exports segment and growing demand from the domestic market,will further fuel growth in the pharmaceutical machinery sector. However, Gujarats engineering sector is highly fragmented especially the pharma machinery manufacturing segment. Due to the highly fragmented nature, there is a dearth of pricing power and critical scale. This in turn restricts the ability to produce the technology-driven products required for operating in the global markrts. The pharma machinery manufacturing industry in Gujarat needs to consolidate and synergise the skills to be able to create worls class players with the scale and resources required,to tap the global as well as local demand.

Many pharma companies in Gujarat have adopted the inorganic route to participate in the global markets. However, operating in the world markets is not just about acquiring global assets but also about having a global mindset. In order to benefit from the ongoing integration of the world pharma markets, the pharma industry and companies have to change interbal mindsets to think and compete globally, and create an environment of innovation. Companies would have to imbibe a culture that enhances its efficiency while responding to the global challenges in different geographies. Having a world-class management team,reflective of the diverse global markets in which they operate,would be a start in this direction. The enterprise-wide use of global IT solutions is another areas that needs to be addressed.

Globalisation model

for Gujarats Pharmaceuticals Industry

Chapter : 3

MethodologyObjectives Of Study To study the reasons of high attrition rate in the Indian pharmaceutical sector and the need, aspiration, interest, satisfaction level of the employees so as to know the reason why do they leave their jobs? To find out the impact of high attrition in the Indian Pharmaceutical Sector.

Sample50 employees were randomly selected from below listed pharmaceutical industries. The industries were: Zydus Alidac Fortiza Claris Life Sciences Ltd. Pfizer Limited Cipla Limited Abbott Diabetes Care Ranbaxy GlaxoSmithKline Pharma Eli-Lily & Company

Characteristics Of Sample The employees at all the level were taken into consideration. The employees taken into consideration held different positions and played different roles in their respective organization.

Variable Independent Variable: Dependent Variable: Control Variable:

HypothesisHypothesis 1:Salary, Organizations Brand and Outer image of the organization has effect on attrition rate in the pharmaceutical sector.

Hypothesis 2:High attrition in the pharmaceutical sector is due to poor job satisfaction and weak organizational culture

Tools A self made questionnaire consisting on about 35 questions was drafted to understand the reasons as to why employees leave the pharmaceutical sector or keep on frequently shifting their jobs. Interview were taken personally or through telephonic talks and tried to understand the trends of employment in the pharmaceutical sector.

Research Procedure:The procedure is to enumerate all the steps of the research process in a chronological order. The emphasis has been placed on the steps taken to assert the nature and size of sample. Specific details also have been included in this section regarding the study.

1. Data CollectionThis study involved the collection of data. First step involved making a questionnaire suitable for the the level of employees in the organization. Secondly getting the permission from the organizations head to conduct the research and collect the appropriate data. The objective of the study was made clear to all so that they could give free and frank replies to all the questions without any fear in their mind. Questionnaires were given to employees of different organization either by e-mails or personal visits on a given date for their responses. Whenever necessary, time was spent with them to explain the instructions for the questionnaire. On specified dates questionnaire was collected from respective

candidates. However data could not be collected of same employees as they were busy or were reluctant to give their responses. The higher officials of the organization gave their information by personal and telephonic interviews.

2. Data AnalysisData analysis and Interpretation involves the following: Frequency Distribution, Percentage Distribution, Mean and Median to calculate the collected data in order to obtain the results.

To help in further analysis the data was also graphically represented by using Bar Graph.

Chapter : 4

Results

I experience a sense of community in my organization

Strongly Agree Agree Neutral Disagree Strongly Disagree Total

20 13 6 3 8 50

40 % 26 % 12 % 6% 16 % 100 %

Chart 1: Employees feel a sense of community in the workplace25 Number of Employees 20 15 10 6 5 0 Somewhat Neutral Somewhat Strongly Agree Disagree Disagree Thus we can analyze that sense of community among the co-workers in the organization is a very important to retain them. Their motivation, job satisfaction all adds up to become the resistant force against attrition in the Indian pharmaceutical sector. Strongly Agree 3 20

13 8

I feel I am valued in this organization.


30 12 5 1 2 50

60 % 24 % 10 % 2% 4% 100 %

Chart 2: Employees feel valued in their workplace

35 30 25 Number of 20 Employees 15 10 5 0

30

12 5 1 Strongly Agree 2

Somewhat Neutral Somewhat Strongly Agree Disagree Disagree Majority of the employees have agreed that they are in their respective organization, happy and satisfied in their job because they are valued there for the person they are or for their skills, talent or ability. Acknowledgement, Appreciation, Feedback or Respect is what an employee seeks to gain not only from his superiors but also from his peer members and subordinates.

Promoting respect & fair treatment among all staff is higher priority of this organization


25 12 8 2 3 50

50 24 16 4 6 100 %

Chart 3: promoting respect & fair treatment among the coworkers is a higher priority of the organization30 Number of Employees 25 20 15 10 5 0 Strongly Agree Somewhat Neutral Somewhat 50% of the employees strongly believe that they are been properly treated in the Agree Disagree organization. It also says a lot about the culture, values, attitude and belief of the organization as well as the employees working in it. Strongly Disagree 12 8 2 3 25

For people who feel they are not been treated well, proper grievance procedure should be held for them

Communication among staff in this organization is effective.


25 18 4 2 1 50

50 % 26 % 5% 4% 2% 100 %

Chart 4: Communication among the co-workers is effective30 25 20 15 10 5 0 Somewhat Neutral Somewhat Strongly Agree Disagree Disagree Communication is the back bone for any organization. If proper two way channel of communication is not there then a lot of problems will occur and the organization cannot run smoothly. From this analysis we come to know almost 75% employees belief that they have a good communication system in their respective organization so high attrition due to poor communication is ruled out. Strongly Agree 4 2 1 25

Number of Employees

18

I have a clear sense of the future direction of this organization.


24 17 8 1 0 50

48 % 34 % 16 % 2% 0% 100 %

Chart 5: Employees have a clear sense of future direction of their organization30 Number of Employees 25 20 15 10 5 0 Somewhat Neutral Somewhat Agree Disagree For making any organization successful it is necessary that the organizational, team and individual goals are aligned. If interest of any one is different from the rest then deviations may occur. All employees should have knowledge about the organizations mission, objective and goals. On the other hand even the employer should have knowledge of the employees objectives and future direction. Strongly Agree 8 1 24 17

0 Strongly Disagree

This organizations atmosphere is generally friendly.


25 18 5 1 1 50

50 % 36 % 10 % 2% 2% 100 %

Chart 6: Workplace's atmosphere is friendly30 Number of Employyes 25 20 15 10 5 0 Somewhat Neutral Somewhat Strongly Agree Disagree Disagree If the organizations atmosphere is friendly then work becomes a play, this is what all organization strives for. There is a cut to throat competition in the pharmaceutical sector so all HR people try to lessen the burden the work and create an healthy organizational environment. Strongly Agree 5 1 1 25

18

Morale in this organization is high


25 17 1 3 4 50

50 % 34 % 2% 6% 8% 100 %

C hart 7: Morale of the organiz ation is high30 25 Number of Employees 20 15 10 5 1 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 3 4 25

17

Almost 90% of the employees believe that morale in their organization is high.

I feel there are leaders in this organization that I can trust.


26 15 5 1 3 50

52 % 30 % 10 % 2% 6% 100 %

Chart 8: Employees feel there are leaders in the workplace they can trust30 25 Number of Employees 20 15 10 5 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 5 1 3 15

26

Trust is the most important thing if people are working in a group for achieving a common objective. Without trust no organization can work in a stable manner. Organizational leaders should always work for the better interest of their members and employees as members should show their trust in them and should support them. Through this graph it can be clearly stated that majority of the employees trust their leaders.

There is a spirit of co-operation among staff in this organization


30 18 2 0 0 50

60 % 36 % 4% 0% 0% 100 %

Chart 9: There is a sprit of co-operation among co-workers35 30 Number of Employees 25 20 15 10 5 0 Strongly Agree Somewhat Agree Neutral 2 18 30

0

0

Somewhat Disagree Strongly Disagree

All the employees agreed that there is a spirit of co-operation among its co-workers. This also indicates the congenial and healthy organizational atmosphere of all the organization as well as of the pharmaceutical sector as a whole. If there are too much to conflict among the staff members then maximum time, resources and human efforts are wasted solving those problems.

I know how my job fits in the larger picture of the pharmaceutical affairs


25 15 5 5 0 50

50 % 30 % 10 % 10 % 0% 100 %

C hart 10: Employees know how their job fits in the larger picture of the pharmaceutical affairs30 25 Number of Employees 20 15 10 5 0 5 5 0 Strongly A gree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 15 25

In this competitive world it becomes necessary that an employee has a good career graph. For this graph, an employee individually has to prepare a career path. The organization can also help him prepare his career map with the organization. This would him both the organization and the person. If a person feels he has good opportunities of growth in this organization then he will never hunt for a job anywhere else.

This organization has policies that are supportive of its staff


23 19 5 1 2 50

46 % 38 % 10 % 2% 4% 100 %

Chart 11: Policies are supportive of its staff25 23 19

20 Number of Employees

15 10 5 1 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 2

5

Organizational policies, norms, rules and regulations are made so that there is a normal code of conduct for all working in the organizations. It is necessary that these rules and regulations are enforced properly and at the same time they are supportive of their staff, because if they are too rigid people might feel uncomfortable and leave their job and if norms are too loose then their importance will go away.

Policies in this organization are clearly articulated to its staff.


20 15 11 2 1 50

40 % 30 % 22 % 4% 2% 100 %

Chart 12: Policies are clearly articulated to all25 20 Number of Employees 15 10 5 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 20 15 11

2

1

Making a policy doesnt make things rolling; its the communication and articulation that makes the difference. 40% of employees believe that whatever policies their organization implements is also articulated. Controlling is very necessary so that deviation dont crop up.

Disciplinary procedures in this organization are consistently enforced.


21 20 7 2 0 50

42 % 40 % 14 % 4% 0% 100 %

Chart 13: Disciplinary procedure are consistently enforced25 21 20 Number of Employees 15 10 5 0 Strongly Agree Somewhat Agree Neutral 20

7 2 0 Somewhat Disagree Strongly Disagree

All the organizations have to act by the laws and rules of the state, the particular industry or by the disciplinary laws enacted by Industrial Dispute Act. If they dont abide them then heavy penalty or punishments have to be borne. According to this survey major segment of the employees believe the organization is ethically implementing all disciplinary procedures as and when required.

Workload in this organization is equally distributed.


19 16 11 3 1 50

38 % 32 % 22 % 6% 2% 100 %

Chart 14: Workload is equally distributed20 18 Number of Employees 16 14 12 10 8 6 4 2 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 3 1 11 19 16

One person cannot do all the work. So division of labour is done. Work is equally distributed among all the employees so that the work pressure and stress is reduced from one employees head and distributed. Their efficiency increases as a result productivity and profitability also increases. There are many employees who are neutral about this statement.

This organization has regular staff meetings to plan and co-ordinate the work and makes announcements.


30 13 3 1 3 50

60 26 6 2 6 100 %

Chart 15: Regular staff meetings to plan & co-ordinate work & make announcement are done35 30 Number of Employees 25 20 15 10 5 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 3 1 3 13 30

An employee gets a clear direction of what is to be done, feedback of his past and present work as well as the scenario going in the organization from the meetings. Staff meeting creates a friendly environment within the organization. 60% of employees strongly agree that their organizations have these staff meetings on a regular base and they are helpful.

I know exactly what is expected of me as an employee.


35 8 5 2 0 50

70 16 10 4 0 100 %

Chart 16: Employees know exactly what is expected out of them40 35 Number of Employees 30 25 20 15 10 5 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree 8 5 2 0 Strongly Disagree 35

86% of employees of the Indian pharmaceutical sector have a clear understanding of what is expected out of them. There is no one who strongly disagrees to this statement, with this we can say that the employees are well aware about where they are and what is to be done to go to the next position. Clarity of mind is the most important thing.

I have a clear understanding of how my job performance is measured.


31 16 3 0 0 50

62 32 6 0 0 100 %

Chart 17: Employes have a clear understanding of how his job performance is measured35 30 Number of Employees 25 20 15 10 5 0 Strongly Agree Somewhat Agree Neutral 3 0 0 16 31

Somewhat Disagree Strongly Disagree

Performance Appraisal is important for all the organizations. By this method performance of employees is measured. Almost everyone knows the methods and means of how the performance is measured in the organization. The method should be a standard method and communicated to all. If the employee is appraised according to his potential then he wont think of any other job so risk of attrition lowers down.

I received orientation to this organization and my job when I started.


23 17 7 3 0 50

46 % 34 % 14 % 6% 0% 100 %

Chart 22: Employees had a thorough orientation about organization and the job when he started25 Number of Employees 20 15 10 5 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree 23

17

7 3 0 Strongly Disagree

No proper orientation or induction process is considered as one of the important reasons for high attrition. An employee is new to the organization, the induction programme will breaks the ice and makes the employee comfortable in the new environment. If this process is not successfully done it might happen the employee leaves the job soon and this becomes a cost on the organization.

I feel encouraged by my organization to pursue professional opportunities.


18 19 8 5 0 50

36 38 16 10 0 100 %

chart 19: Employees feel supported by the organization to participate professioanl development and external programming opportunities.20 18 Number of Employees 16 14 12 10 8 6 4 2 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree 0 Strongly Disagree 8 5 18 19

An employee especially in the pharmaceutical sector has to always polish his skills and abilities because everyday there is a change and scope of development and learning. An employee gets motivated when his organization, his peers support them to develop his professional skills and motivates him to participate in external programs.

This organization reasonably accommodates personal needs.


12 25 10 3 0 50

24 % 50 % 20 % 6% 0% 100 %

Chart 28: Reasonable accomodation of personal needs30 25 Number of Employees 20 15 10 5 0 25

12 10

3 0

Strongly Agree Neutral Somewhat he tries Strongly Disagree A person works to fulfilling hisSomewhat needs. If these needs are not fulfilledDisagree to personal Agree hunt new jobs where he can satisfy these needs. By this graph it is clearly indicated that by working in these organizations an employee can somewhat accommodate with his personal needs.

I feel fairly compensated for the work I do in this office as compared to other similar position across the sector.


15 16 11 5 3 50

30 % 32 % 22 % 10 % 6% 100 %

Chart 31: I feel fairly compensated for the work I do in this office compared to other similar positions across the sector.18 16 Number of Employees 14 12 10 8 6 4 2 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree 5 3 11 15 16

Sometimes an employee get job satisfaction from the monetary compensation received to him in the particular organization as compared to other jobs in the organization or similar jobs in other organization. Compensation is the primary driving force for people to work or to increase their productivity.

I like my job and my co-workers. My organization is one of the best places to work in the pharma sector.


30 9 2 9 0 50

60 % 18 % 4% 18 % 0% 100 %

Chart 33: I like my job and co-workers. My organization is the best place to work in the pharma sector.35 30 Number of Employees 25 20 15 10 5 0 Strongly Agree Somewhat Agree Neutral Somewhat Disagree 9 2 9 30

0 Strongly Disagree

60% of the people are satisfied and happy with their current organization. Though there are 18% of people who are not very satisfied, other 18% are not at all happy with their organization and 4 % are neutral towards it.

I think often about seeking employment elsewhere.

NO I dont think about seeking employment elsewhere YES A higher rank position in same organization YES Elsewhere in the same organization YES Outside this organization Total

16 22 6 6 50

32 % 44 % 12 % 12 % 100 %

Chart 35: I think often about seeking employment elsewhere25 Number of Employees 20 16 15 10 6 5 0 no - I don't think about seeking employment elsewhere 44% of the employees are yes - a higher rank position in same org yes - elsewhere in the same org yes - outside the org 6 22

About seeking a higher rank in the same position. 12% want to move out of the from their existing department. Other 12% want to move out of the organization. While the rest 32% are not looking for any changes.

Chapter : 5

Discussion

The study was done to find out the reasons for high attrition rate in the Indian pharmaceutical sector. Samples were selected from the various pharmaceutical companies. There were 50 samples randomly selected for conducting the research work. Employees of different management levels were surveyed.

In all the organizations there are different ways and methods of finding the attrition rate. There are different formulas used. Moreover attrition rate varies from organization to organization, also attrition rates changes in different organizational stratas i.e top level management, bottom level management and lower level management. On the average of these rates the organizational attrition rate is calculated. The attrition of each organization when combined forms the attrition rate of the entire sector.

Higher the attrition, higher is the cost to be borne by the organization so all organization strives to lower their attrition rate. The employee leaving not only increases the cost but also takes the companys knowledge, customers, current projects details and business secrets with him. This impacts the organizations in multiple ways.

A person works to fulfill his personal and social needs. If he is not compensated well according to his skills and abilities then his morale goes down and he is no more motivated to work hard. The survey also shows that employees in the Indian pharmaceutical sector give importance to monetary benefits and about 30% to 35% of employees believe that they are not compensated as per their skills and abilities.

Employees of big and branded companies do not show an inclination to leave their organization as they know that they are working with one of the best organization. Only 12% of the employees want to quit their organization, whereas 44% of the employees want to stick to the same organization but may be at a higher position. This implies that the first hypothesis is proved correct.

Monetary compensation may be the prime criteria as to why an employee joins the organization but the ultimate reason to remain in the organization is his job satisfaction. Job satisfaction cannot be attained from a single thing but many factors are behind it like communication, good rapport with co-workers, organizational culture etc.

An employee spends 1/3rd of the day in the organization so he should be provided with a comfortable environment where he feels at valued so that he can give his 100% performance. His grievances should be heard to with positive results. A healthy relation among the organization should be maintained.26% of the employees feel that they are properly heard in the organization. 58% of employees believe they are being supported by other staff members and management. Thus from we can conclude our second hypothesis is also true.

Chapter : 6

Conclusion

Most of the employers believe their employees leave us for money reasons. Many a times we have heard people saying, If only I could have paid her more, she would have stayed.

Yes, weve lost people because of money, but this research finds that people leave for one major reason and several subordinate ones.

The answer is that most people leave their jobs because of their supervisor or team leader! What is it about this workplace relationship that makes it the number one reason so many people leave their jobs? Basically, its a lackof trust, of communication, of relevant and timely feedback, of appreciation, of fair treatment and of information. In many organizations the size of the company becomes the reason for the lack ofs. research indicates that once a business entity grows to more than 150200 people the lack ofs grow into issues because managers, supervisors and/or team leaders get too far away from their people.When you go higher in the organization, you begin to see a lack of familiarity. A lack of familiarity appears to breed discontent, which results in a high rate of turnover.

Thus, with this we prove our two hypotheses stating that: Salary, Organizations Brand and Outer image of the organization has effect on attrition rate in the pharmaceutical sector.

High attrition in the pharmaceutical sector is due to poor job satisfaction and weak organizational culture.

Thus from the above discussion we can conclude that both our hypothesis have been proved correct.

Major Limitation of Study1. Sample SizeSince the sample size was small, numbering only 50 subjects, the exposure to the subject was also small. Bigger sample size would have given more responses leading to a better and broader idea of the outcomes. The study was limited to only employees of few pharmaceutical in and around Vadodara.

2. Time ConstraintThere was limited time to complete and compile the study.

3. The higher officials of the pharmaceutical companies were reluctant to make their employees fill the questionnaire or give any information about the attrition stating it to be a sensitive issue.

4. There are chances that the study undertaken is not 100% correct. So the allowable error in the analysis is +/-4%.

Chapter : 7

Recommendations

Even though the attrition rate in the pharmaceutical sector seems to be quite favorable, the organization will benefit if it looks into a few issues: The organization must try to empower the employees so that they can make their own decision and have autonomy. This would not only increase their job satisfaction, it would reduce the dependency on the management and hence the management time to look into more pressing issues. Communication amongst all levels must be transparent and speedy so that it leads to a climate of trust and positive working culture. The organization must avoid being bias to few influential people, and hearing out only the stronger employees. A fair chance must be given to all employees and an unbiased attitude must be adopted. The organizational culture should be made enabling i.e it should create a sense of belongingness within it. Continuous updating of the employees skills and knowledge through training and workshops would boost their job satisfaction and also create a positive organizational culture. The employees are not always comfortable to express their opinions freely. To check this, the organization needs to undertake a study of their communication systems and remove employees do not always feel free and comfortable.

Reference Wilipedia, the free encyclopedia Express Pharma, fortnightly insight for pharma professionals. www.livemint.com Attrition Rate Study By Gustave G Wenzel, Hansen, M. Duane, Gustave Business Standard Magazine, Nov 2008 issue www.citehr.com www.managementguys.com Gujarat Pharma Industry by KPMG India

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