Magazine Article | January 30, 2010

Do You Have The Workload But Not The Workforce?

Source: Life Science Leader

By Beth DiPaolo

In today’s global economy, the pressures on companies to do more with less are greater now than ever before. Businesses offering cost-effective, collaborative, innovative solutions to their customers will be the ones to emerge from this recession stronger than ever. As corporations seek to reduce costs, there is a significant trend among pharmaceutical and biopharmaceutical companies to not only outsource laboratory services but now insource laboratory staff, which is gaining momentum. More senior executives are discovering the wisdom of both outsourcing as well as insourcing to increase the percentage of variable cost in their businesses, thereby enabling them to more effectively manage the competing challenges of fixed (or reduced) headcounts and variable workloads.

Pharmaceutical and biopharmaceutical companies faced with hiring freezes or workforce reductions are increasingly collaborating with laboratory services providers to help them juggle their workloads and staffing challenges. The insourced scientific staffing model provides the client’s laboratory with highly skilled scientists who deliver an extensive range of both scientific and support services, while utilizing the quality systems within the client’s facilities. And this insourcing approach frees up the client’s own employees to address core business priorities, while offering a highly managed and productive, cost-effective, nontemporary workforce solution. The culmination of this collaboration is rooted in a simple premise: An experienced laboratory leader under the roof of another industry icon can equal a stronger partnership, creating a greater sum of two parts.

One executive at a leading pharmaceutical company who has implemented an insourced scientific staffing program, and asked to remain anonymous, said, “In our case, we had several issues to solve. We had a lot of projects that had to be done very quickly and didn’t have the people to do them. And with the extremely tight turnarounds required, outsourcing may have taken too long. Finally, to be perfectly honest, we had some proprietary methods and analytical techniques that we really preferred to keep in-house. Addressing every problem we had, this insourcing model gave us the means of getting our work done by high-level scientists with our methods in our house faster than outsourcing.”

So why insourcing vs. the use of temporary employees? A good contract laboratory’s professional scientific staffing program will be specifically designed to provide a “nonpermanent” workforce for anywhere from one year to 10 years or more with no issues of coemployment and at a lower cost than fixed headcounts. The scientific staffing provider will recruit, hire, train, and manage its employees, removing the client’s burden of continually retraining temps, thereby saving time and money. And if the program is structured deliberately and consistently so that the employment relationship is clear and consistent with the IRS 20 Factor Test, this will eliminate all coemployment risk for the client. Also of equal importance, if the contract laboratory employs human resource best practices and has a low turnover, the result will be a stable, motivated workforce that consistently outperforms the temps.

There is another element of the insourcing model that many companies find desirable. Specifically, most companies value the human element of insourcing due to its significance from a morale and economic impact standpoint, as employment opportunities remain local and services are enhanced by in-house collaboration. The silver lining, as businesses are forced to reduce staff, is that a percentage of those laid off may find employment through the insourcing provider at their previous employer’s site, thereby keeping local jobs local.

Willie Chatham, who was laid off by his previous employer, he says he feels fortunate to be among the many hired by a contract insourcing laboratory to work at his previous company’s site. “Insourcing is a great program because it partnered two good companies with similar corporate cultures who care about their people and capitalized on their working smarter together,” says Chatham. “My previous employer simply wanted to focus on its core business and had initially intended to outsource the testing. With outsourcing, core values, ethics, 4 I’s commitment, and performance management make important statements about the people who will be taking care of your projects. But with insourcing, you have people taking care of projects as well as people; therefore, similar aligned values are that much more important.

“Insourcing produces exponential benefits for everyone,” Chatham continues. “Many of us who were hired by the contract insourcing lab are already experts in this project work — no retraining — more proficient than a temp — fewer employees needed to do the job — higher morale, but we’re learning how to do it better and faster to better serve the client. And the client gets projects completed with fewer costs and worries. Believe me, this has worked out well.”

The heart of professional scientific staffing in these tough economic times lies in higher employee morale and productivity due to the conversion potential from laid off or temporary to full-time insourced employment. And the bottom-line benefits for the pharmaceutical and biopharmaceutical firms range from intelligent and proficient use of human resources to cost-structure advantages. Working together, everyone takes home a success story.

With Lancaster Laboratories’ Human Resources Department since 1987, Beth DiPaolo, SPHR, is the managing director of professional scientific staffing, recruiting, and organizational development. Ms. DiPaolo earned a BS in business management/human resources from the State University of New York and is currently pursuing a Ph.D. in human and organizational development.