Pharmaceutical Company Case Study

Client Problem

A major pharmaceutical company needed a reliable and cost effective way to monitor hourly rate benchmarks labor in several geographies. The responsibility of determining rates was centralized to the Procurement Group who received requests from hiring managers for openings that needed pricing before distribution to the vendor base. Although the company had defined a certain number of general position descriptions, managers often needed to “customize” the general description by adding more skills, certifications, etc. The company needed a method of analyzing the market to determine the best pricing for their customized job descriptions on an ongoing basis.

Client Anticipated Solution

The company needed a solution that addressed the following needs:

• Easily accessible market pay rates and bill rates
• Market data based on specific job descriptions
• An understanding of the current market rates and trends
• Ability to refer to previously priced openings
• Centralized control of negotiation/retention strategy

Proposed Provider Solution

To meet their needs, the Company chose The People Ticker as their preferred solution because of its unique in its ability to meet the requirements of several user groups (HR, Procurement, Compensation and Hiring Managers).

Need: Easily accessible market pay rates and bill rates

Solution: With an annual subscription to The People Ticker, the Company has unlimited access to the marketplace for both hourly and full-time labor benchmarks. Gaining access to both contingent and full-time data also provides the ability for the Company to evaluate cost factors in determining if a position should be sourced as a consultant or as an employee. In addition, The People Ticker provides the ability to evaluate price differences by geography on a country, state or city/municipal level, thus providing the market intelligence needed for the Company to source from or in locations that translate into greater savings for projects and day-to-day activities.

The goal is not always the lowest price, but a fair price balanced between the worker and the supplier. By analyzing both pay rates and bill rates, the Company understands the market conditions that exist for all parties and can negotiate with confidence. The People Ticker interface makes it easy to analyze the market with just afew clicks requiring minimal training to the user.

Need: Market data based on specific job descriptions

Solution: The People Ticker allows the Company to simply paste in their job description and specific skill set requirements to get market data. This means the Company can use their own job titles, and more importantly, their own definition of what a skill set entails. Companies that use traditional survey-based tools are presented with certain challenges. Survey-based tools utilize generic job descriptions that typically do not meet the needs of the specific skill sets required when sourcing candidates. For instance, a survey job description may present a DBA price point but does not make distinctions between Oracle, SQL, Sybase, Postgress skills and Mainframe or Windows-based skills focus. These specifics may greatly impact the pricepoint that should be utilized to arrive at fair market pricing. This is especially true in volatile fields requiring specialized skills, such as information technology.

Need: An understanding of the current rates and trends

Solution: The People Ticker provides a unique view of current market conditions and historical trends. Visibility into the market allows the Company to strategically set internal rate structures for recruiting metrics and to improve retention rates. Understandingthese fluctuations is key to savings opportunities for new engagements and for re-negotiating the embedded population of consultants. Market fluctuations are often overlooked in long-term engagements resulting in unnecessary costs or retention issues when rates are not aligned with the market. The People Ticker provided the Company with the market intelligence needed to approach the consultant or the supplier for a rate adjustment. A single negotiation with one supplier resulted in annualized savings of $20,000 with a decrease of $10/hour.

Need: Ability to refer back to previously priced openings

Solution: The People Ticker allows the Company to generate market rate cards in addition to internal rate cards. Rate cards provide the ability to monitor market changes and see them concurrently with the Company’s internal rate structure. The market rate card functions like a stock ticker updating on a daily basis. At a glance, the Company can determine price changes for every skill set. When pricing a new opening, the Company has current market data, historical trends, and current market available in real-time to assist setting the internal pay structure for the new position.

Need: Centralized control of negotiation/retention strategy

Solution: The Company’s procurement team is now able to centralize the development of rate structures for historical positions as well as new positions on an as-needed basis. Using market data provided by The People Ticker, the Company can create realistic price point targets for pay rates and build a customized markup for each vendor based on estimated supplier costs and profit by state. Result: A bill rate predicated on market pay rates and markups based on fixed cost factors.

By focusing on market pay rates rather than bill rates, the Company now has the ability to develop retention strategies. Successful retention of the contingent workforce is a function of pay rate and has little to do with bill rate. A strong understanding of pay rate expectations in the marketplace helps the Company develop pricing strategies that are aligned with the market. Depending on the skills set requirements and the marketdemand for those skill sets, the Company can strategically set internal rate structuresat, above, or below the market for a particular skill set in a particular geography.

Results

The Company realized great success in the form of cost savings and increased retention rates by utilizing The People Ticker.

The People Ticker is easy to use and understand which resulted in a efficient utilization of the data, and thus a quickly realized and significant ROI.

Substantial savings (10-12%) were realized through renegotiating the embedded base of contingent workers. The Company continues to realize ongoing savings because they have unlimited access to and clear visibility of market expectations at their disposal. In conclusion, The People Ticker empowered the procurement team to negotiate from a knowledgeable position and proved to be the ideal solution for the Company.