Pharma hiring may remain flat in H2

Driven by bleak market sentiments and recent policy changes, pharma companies are adopting a cautious approach to hiring in the second half of the year.

Sumeet Singh, senior vice-president, marketing and communications, Info Edge India said "Although the overall hiring activity in the pharma sector has been moving at a steady pace in the first half of the year, recruiters are now preferring to adopt a cautious wait and watch mode in the coming quarters".

The new drug pricing policy has been recommended by the Group of Ministers (GoM) proposes to control the prices of essential drugs using a weighted average price (WAP) of all brands with a market share in excess of one per cent. According to rating agency ICRA, " While the exact impact of the new pricing policy will depend on multiple factors,... we believe that the impact of new pricing mechanism is likely to result in 10-15 per cent reduction in prices, thereby implying an erosion of 3-5 per cent in market size of the domestic formulations market." A recent Naukri.com survey with recruiters from the pharma sector revealed a drop in overall hiring sentiment. It said that around 51 per cent recruiters are expecting to add new jobs in the second half of 2012 which is 16 per cent lower than what was predicted by them in January-2012 survey. The survey also added that now around 11 per cent recruiters in the pharma space are saying that hiring will come to a halt in the next six months.

R K Baheti, director,finance, Alembic Pharmaceuticals, said, " We have completed our recruitment exercise for this year, and for the second half, we do not have any major plans. As for the first half of the year, recruitments have remained flat on a year-on-year basis. Major recruitments have been in the field forces, and not much in corporate functions." At present, Alembic has a marketing team of 3600 people, Baheti informed.

Commenting on the recruitments in the first half of the year, Sun Pharmaceuticals said, it was steady compared to previous years.

Coming to increments, the Naurkri.com survey pointed out that around 59 per cent of respondents said that increments in 2012 were in the range of 10-15 per cent, while around 25 per cent recruiters said that increments were less than 10 per cent. "Talent crunch seems to be an important issue being faced by recruiters in the pharma sector as 73 per cent said that it is very difficult to find talent suitable for a job profile.", the Naukri.com survey highlighted.

A deeper analysis of the job scenario for the sector shows that about 33 per cent jobs created in the pharma sector in 2012 are from Mumbai, 12 per cent from Hyderabad and 11 per cent from Bengalore. Most job openings in the sector are for job-seekers in the 3- 5 years experience levels.

The overall profitability of the domestic business of pharma companies may shrink by 2.8-4.4 per cent on an aggregate basis, says ICRA. "We believe that MNC pharma companies operating in India are likely to be impacted the most given their significant dependence on the domestic formulations segment and relatively premium pricing strategy that may force sharp price cuts post the implementation of the pricing policy. In addition, some of the mid-size domestic companies with relatively higher reliance on domestic market for earnings would also see a meaningful impact on earnings as their investments in regulated markets are yet to start contributing considerably to overall earnings.", the agency said.