Hoping for a Turnaround, Schering-Plough Looks to Beef Up Its Sales Force
Michael Conforti knows he has to shore up his sales force. "Schering-Plough is trying to play catch-up," says Conforti, director of human resources for the company.
Schering-Plough posted lower sales in 2003 and a loss for the year. The company’s patent for its money-making prescription drug Claritin expired in 2002, and Claritin was launched as an over-the-counter drug at the end of that year. The company also faces aggressive competition in the cholesterol-treatment market, where its sales force is trying to build market share.
When CEO Fred Hassan took over Schering-Plough last year, he publicly acknowledged the "serious systemic problems" facing the company and vowed to change them. Still, at the end of January, Schering-Plough reported a loss for the 2003 fourth quarter of $181 million, or 12 cents per share, compared with net income of $313 million and diluted earnings per share of 21 cents in the same period of 2002. Fourth-quarter sales of $1.9 billion were 18 percent lower than results for the previous year. "As planned, 2004 will be the year of repair and cleanup, bridging to an expected turnaround starting in 2005," Hassan said in a press release.
"Part of the turnaround is just making sure our sales force is equipped to compete with other sales forces," says Conforti. Schering-Plough hired a top-tier consulting firm to evaluate how its sales force was spending its time, and then make recommendations. The consulting company found that Schering-Plough sales representatives needed to be in front of doctors more often. The firm also recommended that the company hire more district managers, so that each one manages fewer sales reps. The study also determined that managers spent about 7 to 8 percent of their time doing recruiting--valuable hours that could have been used for sales calls.
"We had over 180 district managers who had slightly different processes and hundreds of vendors," says Conforti. The result was an inconsistency in the quality of new hires.
Have someone else do it
Schering-Plough anticipates launching a new drug later this year and plans to hire several hundred new primary-care sales representatives. "We want the premier sales force in the entire pharmaceutical industry in the United States," says Conforti.
Easier said than done. Demand for pharmaceutical sales professionals remains strong, even in a slow-job-growth economy. It’s even harder to find good district managers.
At the end of last year, the pharmaceutical company decided to solve a myriad of problems at once by outsourcing its recruiting for the new sales force to Kenexa. Between December 15 and April 1, Kenexa will screen about 60,000 candidates, and Schering-Plough will ultimately hire between 400 and 500 employees by the beginning of the second quarter. Of those hires, about 15 percent will be people that Kenexa actively recruits from other companies.
Conforti acknowledges that some of the best employees are already working, and that direct sourcing, or "poaching," from competitors will be necessary. Kenexa will focus on six or seven different strategies to source employees, and will concentrate on specific industries where Schering-Plough has had success in the past, says Conforti. He’s careful to say that Schering-Plough isn’t targeting specific companies but rather the pharmaceutical industry in general.
Kenexa will do the screening; Schering-Plough will do the final interviews and hiring. By outsourcing to Kenexa, Conforti hopes to reduce time to hire, find more sales employees with drug-company experience, and save more than a million dollars.