pharma · 2017-11-15 · 54%. eighty percent of pharma sector companies cited cost control as the...

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Industry Profile

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

21

07

PHARMAPharmaceuticals/Healthcare

CARTUS | 2017 DOMESTIC U.S. POLICY & PRACTICES SURVEY | INDUSTRY PROFILES: PHARMA 2

I N D U S T R Y P R O F I L E S : P H A R M A

Industry Profiles examine the ways that individual industries approach key program practices and assignment policy features, based on data gathered in the

2017 Domestic U.S. Relocation Policy & Practices Survey.

Nine percent of the 141 respondents to Cartus’ 2017 Domestic U.S. Relocation Policy & Practices survey are companies in the Pharma industry. Volume concentrations for Pharma companies mirror those of companies overall, with the highest concentration of moves between 251-500 moves per year. The gender of transferring employees was 66% male.

OVERVIEWPolitical influences are expected to be felt in the Pharma sector this year with the potential for a revision of Obamacare, repatriation of overseas profits, reduced regulation, and the anticipated tax reform. The industry is still experiencing reverberations from the sharp criticism of price gouging in several highly publicized incidents. As a result, some big Pharma companies are committing to voluntary price restraints or value-based pricing. Many analysts are calling for the Pharma industry to show better price transparency while finding new ways to build and demonstrate a drug’s value, and are predicting a resurgence of biopharma mergers and acquisitions in 2017.

Relocation PolicyAn intensive focus on efficiency, and cost-efficiency, is reflected in the responses from companies in the Pharma sector. The two greatest challenges were relocation costs and high cost areas, both at 54%. Eighty percent of Pharma sector companies cited cost control as the driving need for flexible policy approaches. The majority of companies utilize a tiered program, and the percentage of Pharma sector companies with four or more tiers in their program is higher than overall companies (66% versus 57%), a likely reflection of the sector’s interest in utilizing tiering to control costs. When looking at how policy tiers are defined, 91% of Pharma sector companies defined tiers by employee level, far ahead of all other industries at 72%.

Home sale assistance, in the form of the Guaranteed Buyout, was offered as the primary program by 66% of Pharma sector respondents, with the application of the Guaranteed Buyout being determined by employee level. However, the Buyer Value Option program is offered by 92% of Pharma companies. This sector’s more traditional approach to relocation programs is indicative of the competition for highly-skilled, technical hires. Pharma sector companies offer full coverage of loss on sale slightly less often than all other industries (33% versus 39%).

Many analysts are calling for the Pharma industry

to show better price transparency and are

predicting a resurgence of biopharma mergers and

acquisitions in 2017.

The percentage of Pharma companies

using more than four tiers is higher than companies overall.

3 INDUSTRY PROFILES: PHARMA | 2017 DOMESTIC U.S. POLICY & PRACTICES SURVEY | CARTUS


High Cost AreasFifty-five percent of Pharma companies provide cost of living allowance (COLA) via a formal policy to assist in high cost areas, twice as often as all other industries. Also, 50% of Pharma companies offer a mortgage subsidy as a method of addressing increased costs, far more than all other industries (17%). This can be due to the concentration of Pharma companies having headquarters or operational centers in high cost areas.

Short-Term and Rotational AssignmentsSixty-four percent of Pharma respondents utilize short-term assignments, in line with all other industries, and 55% offer rotational assignments, higher than all other industries at 34%. Eighty percent of Pharma companies that have a rotational assignment program have a distinct and separate policy in place, much higher than the 49% of companies in all other industries.

Talent ShortagesThe majority of companies in the Pharma industry plan to, or are, addressing talent shortages by the use of targeted recruiting (67%), followed by an increased focus on intern programs, intensifying campus recruiting, and offshoring/outsourcing, all named by 44% of Pharma respondents.

Technology will also be playing a larger part in this sector as the market explodes with healthcare apps and other digital innovations geared to boosting connectivity and engagement between the players along the healthcare chain. The evolution of health wearables plays a key role in data-gathering and disease monitoring, which can create additional challenges around data integrity, privacy, collection, and reporting.

Policy Comparison GridThis grid reflects the key elements of relocation challenge and policy, comparing Pharma companies with other industries and highlighting significant differences between the two.

CHALLENGES

Relocation Challenges Pharma All other industries

Relocation cost 54% 57%

High cost areas 54% 36%

Need for more flexibility in relocation policy 31% 28%

Measuring return on investment (ROI) 23% 31%

Recruiting and talent development 15% 24%

Real estate market 8% 31%

Mobility program tracking 0% 14%

Pharma companies provide far more assistance in

high cost areas than all other industries, largely

due to Pharma companies having headquarters and

operations centers in high cost areas.



POLICY

Domestic U.S. Policy Structure Design Pharma All other industries

Tiered 47% 76%

Menu-driven 24% 8%

Core-flex 18% 7%

Single 11% 9%

Drivers of Flexible Policy Approaches Pharma All other industries

Cost control 80% 69%

Attracting qualified candidates 40% 46%

Reducing policy exceptions 40% 43%

Changing employee expectations (Gen X, Gen Y, Millennials, etc.)

40% 38%

Changing employee needs (family, spouse, elder care, etc.)

0% 43%

CORE-FLEX POLICY

Primary Core versus Flex Elements

Pharma All other industries

Core Flex Core Flex

Buyer Value Option 100% 0% 42% 58%

New home purchase closing costs 100% 0% 44% 56%

Miscellaneous allowance 100% 0% 69% 31%

Household goods shipment 100% 0% 71% 29%

Storage of household goods 100% 0% 50% 50%

House hunting 100% 0% 52% 48%

Temporary living 100% 0% 57% 43%

Tax assistance 100% 0% 78% 23%

Car shipment 100% 0% 49% 51%

Rental assistance 100% 0% 42% 58%

Lease breakage 100% 0% 43% 57%

Home sale incentive 100% 0% 16% 84%

Loss on sale 100% 0% 12% 88%

Final trip 100% 0% 57% 43%

Return trips 100% 0% 33% 67%

Guaranteed buyout 0% 100% 24% 76%

Duplicate housing 0% 0% 23% 77%

Rationale for Determining Core & Flex Elements

Pharma

All other industries

Employee level 100% 57%

Move type (e.g., homeowner, renter) 100% 51%

Budget 100% 49%

Move purpose 100% 33%



HOME SALE

Primary U.S. Home Sale Program Pharma All other industries

Guaranteed offer/buyout 66% 35%

BVO without sunset 17% 12%

BVO with sunset (guaranteed offer after a set period of time)

17% 29%

None 0% 0%

Direct reimbursement 0% 8%

By exception 0% 16%

Changes in Past Two Years to Home Sale Policy/Program

Pharma


No 75% 61%

Yes—policy design—added/changed existing program options or core-flex policy provisions

17% 20%

Yes—policy design—added/changed tiers 8% 18%

Yes —added or changed lump sum policy 8% 8%

Yes—changed home sale program type from buyout to BVO

0% 3%

BUYER VALUE OPTION


Offer BVO 92% 62%

Sunset Clause for BVO Program Pharma All other industries

No 100% 74%

Yes 0% 26%

GUARANTEED BUYOUT


Offer guaranteed buyout 58% 50%

Eligibility Determined for Guaranteed Buyout program

Pharma


By level 100% 61%

By hire status 0% 23%

All homeowners 0% 12%

By exception 0% 4%



LOSS ON SALE

Offer Loss on Sale Support Pharma All other industries

Yes, varies by employee level 45% 22%

No 19% 44%

Yes, offer on exception basis only 18% 14%

Yes, for all employees 18% 10%

Current employees only 0% 7%

Case-by-case 0% 3%

RENTER-LEASE CANCELLATION

Offer Lease Cancellation Support Pharma All other industries

Yes 100% 81%

Yes, by exception 0% 9%

No 0% 10%

HIGH COST AREAS

Allowance for Higher Living/Housing Costs Pharma All other industries

Yes, we provide COLA via a formal policy 55% 26%

No, we don’t provide COLA 36% 59%

Yes, we offer on a case-by-case basis 9% 9%

Reflected in compensation 0% 4%

Increases in lump sum or miscellaneous expense allowance (MEA)

0% 1%

Yes, we provide COLA via a formal policy excluding new hires

0% 6%

Mortgage Subsidy Provided Pharma All other industries

No 50% 79%

Yes 50% 17%

Yes, by exception only 0% 4%

Rental Subsidy Provided Pharma All other industries

No 73% 85%

Yes, depends on employee level 9% 7%

Yes, for all renters 9% 4%

Yes, by exception 9% 4%

SHORT-TERM ASSIGNMENTS

Organization Uses U.S. Domestic Temporary/Short-Term Assignments

Pharma


Yes 64% 62%

No 36% 38%



Change Expected in Use of U.S. Domestic Temporary/Short-Term Assignments Over the Next Two Years

Pharma


Increase 50% 39%

Stay the same 50% 53%

Decrease 0% 8%

ROTATIONAL ASSIGNMENTS

Use of U.S. Rotational Assignments Pharma All other industries

Yes 55% 34%

No 45% 66%

Change Expected in Rotational Assignments Over Next Two Years

Pharma


Stay the same 67% 54%

Increase 33% 41%

Decrease 0% 5%

Formal Policy for U.S. Domestic Rotational Assignments

Pharma


Yes 80% 49%

No 20% 32%

No, rotational assignments are done on a case-by-case basis

0% 19%

INTERNS

Relocation Program for Interns Pharma All other industries

No 82% 63%

College interns 18% 34%

MBA/Graduate interns 9% 23%

TALENT MANAGEMENT

Strategies for Overcoming Talent Shortages Pharma All other industries

Targeted recruiting 67% 67%

More focus on intern programs 44% 33%

Intensified campus recruiting 44% 42%

Offshoring/outsourcing 44% 4%

Enriching relocation packages on a case-by-case basis/approving exceptions

33% 18%

Sign-on bonuses 33% 51%

Recruiting from other countries 33% 9%

Offering short-term/temporary assignments 33% 11%

More local training 11% 11%

Enriching relocation packages across the board 0% 2%



Company Using Different Approaches to Manage Millennials

Pharma


No 78% 75%

Yes 22% 25%

Strategies Implemented to Retain Millennial Talent

Pharma


More rotational/developmental assignments 100% 68%

Flexibility (e.g., working remotely, flexible work hours, etc.)

100% 71%

Short-term temporary assignments 100% 50%

Providing mentors 0% 64%

Developmental training 0% 50%

Offering more special projects 0% 29%

More investment in technology 0% 29%

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Survey Report

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

21

07

Cartus’ Industry Profiles series contains the following eight industry sectors. For these reports

and other Cartus research studies, including information on policy comparisons by industry,

please contact your Cartus representative or visit our Resource Hub on cartus.com.

Industry Description

FINANCIALBanking, Finance, Insurance, Real Estate

PHARMAPharmaceuticals, Healthcare

CONSUMER GOODSConsumer Goods, Food & Beverage

RAW MATERIALSEnergy, Utilities, Mining, Forest Products

MANUFACTURING/ CONSTRUCTIONManufacturing, Machinery, Aerospace, Instruments, Construction, Engineering

SERVICE/MEDIABusiness Services, Hospitality, Entertainment, Telecommunications, Media

OIL & GASPetroleum Products, Gasoline

TECHTechnology, Electronics, Computers, Software

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pharma · 2017-11-15 · 54%. eighty percent of pharma sector companies cited cost control as the...

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