S. Harachand06.04.07
When Dr. Anup Sobti (name changed), a senior Clinical Research Associate with a multinational firm, got a call offering him thrice the amount of his salary and the title of project manager from a rival domestic CRO , he was not so surprised. It was perhaps the second or third call he received that week.
Job calls with 100-200% hike in salaries have become more of a routine affair in India's CRO industry as the rapidity of growth gives this fledgling sector a run for qualified people, making experienced professionals like Dr. Sobti a sought-after commodity.
Growing at a rate of more than 25%, the CRO industry is expected to cross $3 billion mark from the current estimated $200 million in the next couple of years. It would require more than 50,000 professionals by then, figures indicate. And the CROs feel overly confident that the sub-continent is fast evolving a chosen location to offshore clinical research. They hope to claim an even bigger share -- around 30% of trials happening outside U.S. and Europe -- in global CRO business in the near future.
Even as more and more jobs are being outsourced, the booming industry is haunted with the looming fear of "ready-made" resources to man them. "Suddenly the demand [for quality professionals] turned so huge. . . and personnel with experience to run projects are in short supply. This has resulted in a big demand/supply gap," explained Dr. Umakanta Sahoo, managing director, Chiltern International, an Indian arm of a UK-based CRO.
Such a widening gap of rising demand and too few human resources has left CROs struggling not only to secure their staff but guard against poaching too. A few MNCs with captive CRO centers have already lost several of their fellows at middle and entry levels -- where the demand is highest -- to the attrition bug. So they are often left with the option of luring with unmatchably hefty pay packs. Smaller firms are only too willing to pay more to hire such experts with fancy titles. Pay scales vary from company to company and the salaries are yet to be standardized in the sector.
Professional compensation has been spiralling up throughout the Indian pharma industry to the tune of 15-20%, in tandem with IT and other sectors, during the past few years. Staff costs in the pharma sector have gone up by one-third in the last fiscal year, according to an analysis of 50 Indian companies' balance sheets. The appraisal is generally attributed to the prevailing sentiment based on reports that India's economy is firming up.
Payouts in the CRO segment, however, zoomed up about 50% on average in the recent past, against 25-40% in the outsourcing industry in general; contract manufacturing comes next. "At present, 74% of pharma jobs being off-shored to India are from R&D. Researchers with exposure in the U.S. and western European markets are the most cherished. Expatriate scientists choosing to return to India are offered salaries on par with what they were earning while in these countries. This can be 7 to 10 times higher than their average Indian counterparts," observed Mr. Mahesh Sawant, program manager, Healthcare practice, Frost & Sullivan.
While salaries keep on rising, some analysts in the outsourcing industry find it a bit chaotic. How would these firms balance out hefty pay bills with cost-effectiveness? Wouldn't it, eventually, scupper the low-cost advantage plank which India's outsourcing business props on?
But experts like Dr. Arun Bhatt, president of ClinInvent, a leading CRO from Mumbai, think otherwise. He feels rising payments would not necessarily threaten the benefits of being a low-cost base, at least in the clinical research scene. "Lower costs are not always the only factor that make overseas drug companies prefer India to conduct their Clinical Trials . It is equally important for them to reduce the timelines. Since India has large patient groups who are drug-nave, the patient recruitment process for trials becomes quicker. If you can cut back the enrollment time by one month, that itself can be of great benefit. The shorter the time, the less the expense," he pointed out.
Likewise, contract manufacturing services, the other segment witnessing a similar salary boom, is also unlikely to take a direct Hit . It may affect its cost-competitive position compared to China, but will not have a significant impact on the cost advantage vis-a-vis the U.S. and Europe, as India's labor cost is still one 1/5 or 1/7 of these countries, avers a sector analyst with KPMG India.
Job calls with 100-200% hike in salaries have become more of a routine affair in India's CRO industry as the rapidity of growth gives this fledgling sector a run for qualified people, making experienced professionals like Dr. Sobti a sought-after commodity.
Growing at a rate of more than 25%, the CRO industry is expected to cross $3 billion mark from the current estimated $200 million in the next couple of years. It would require more than 50,000 professionals by then, figures indicate. And the CROs feel overly confident that the sub-continent is fast evolving a chosen location to offshore clinical research. They hope to claim an even bigger share -- around 30% of trials happening outside U.S. and Europe -- in global CRO business in the near future.
Even as more and more jobs are being outsourced, the booming industry is haunted with the looming fear of "ready-made" resources to man them. "Suddenly the demand [for quality professionals] turned so huge. . . and personnel with experience to run projects are in short supply. This has resulted in a big demand/supply gap," explained Dr. Umakanta Sahoo, managing director, Chiltern International, an Indian arm of a UK-based CRO.
Soaring Salaries
Such a widening gap of rising demand and too few human resources has left CROs struggling not only to secure their staff but guard against poaching too. A few MNCs with captive CRO centers have already lost several of their fellows at middle and entry levels -- where the demand is highest -- to the attrition bug. So they are often left with the option of luring with unmatchably hefty pay packs. Smaller firms are only too willing to pay more to hire such experts with fancy titles. Pay scales vary from company to company and the salaries are yet to be standardized in the sector.
Professional compensation has been spiralling up throughout the Indian pharma industry to the tune of 15-20%, in tandem with IT and other sectors, during the past few years. Staff costs in the pharma sector have gone up by one-third in the last fiscal year, according to an analysis of 50 Indian companies' balance sheets. The appraisal is generally attributed to the prevailing sentiment based on reports that India's economy is firming up.
Payouts in the CRO segment, however, zoomed up about 50% on average in the recent past, against 25-40% in the outsourcing industry in general; contract manufacturing comes next. "At present, 74% of pharma jobs being off-shored to India are from R&D. Researchers with exposure in the U.S. and western European markets are the most cherished. Expatriate scientists choosing to return to India are offered salaries on par with what they were earning while in these countries. This can be 7 to 10 times higher than their average Indian counterparts," observed Mr. Mahesh Sawant, program manager, Healthcare practice, Frost & Sullivan.
Higher Pay vs. Lower Costs?
While salaries keep on rising, some analysts in the outsourcing industry find it a bit chaotic. How would these firms balance out hefty pay bills with cost-effectiveness? Wouldn't it, eventually, scupper the low-cost advantage plank which India's outsourcing business props on?
But experts like Dr. Arun Bhatt, president of ClinInvent, a leading CRO from Mumbai, think otherwise. He feels rising payments would not necessarily threaten the benefits of being a low-cost base, at least in the clinical research scene. "Lower costs are not always the only factor that make overseas drug companies prefer India to conduct their Clinical Trials . It is equally important for them to reduce the timelines. Since India has large patient groups who are drug-nave, the patient recruitment process for trials becomes quicker. If you can cut back the enrollment time by one month, that itself can be of great benefit. The shorter the time, the less the expense," he pointed out.
Likewise, contract manufacturing services, the other segment witnessing a similar salary boom, is also unlikely to take a direct Hit . It may affect its cost-competitive position compared to China, but will not have a significant impact on the cost advantage vis-a-vis the U.S. and Europe, as India's labor cost is still one 1/5 or 1/7 of these countries, avers a sector analyst with KPMG India.
