Janssen-Cilag’s prescription for retention

by 12 Mar 2009

Alarm bells sounded in the finance department of Janssen-Cilag in 2004 when they examined the high cost of turnover. However, a few simple changes have dramatically improved retention rates and impacted positively on the bottom line. Sarah O’Carroll reports

In 2004, a lot of employees were leaving Janssen- Cilag. With a turnover rate of 24 per cent, many tal ented people were walking out the door or leaving for other companies. It was costing the pharma ceutical company a lot of money in recruitment and training, and had a noticeably negative impact on the bottom line.

So when finance analysed the problem and the high cost of turnover, it set about figuring out how to lower this cost in conjunction with HR, which was tasked with figuring out why the firm had a retention problem.

The solutions were surprisingly simple.

Recruiting for the wrong reasons

First of all, HR discovered they were simply recruiting the wrong people. The recruitment strategy up until 2004 was to place a strong emphasis on technical and educa tional qualifications and employ people they thought would be best equipped to perform the job. While the company acknowledges the importance of technical expe rience and knowledge, it failed to assess whether or not potential employees would fit the company culture, way of life and core set of values.

“We then started recruiting, not just based on technical skills, but interviewing on ‘fit to culture’ basis,” says Sue Whipps, Janssen-Cilag HR director. “We really looked at the type of profile of an individual who would be suc cessful in our culture and we interviewed based on that.”

Due to a very tight labour market over the past few years in Australia, especially in specialist areas such as the pharmaceutical sector, Janssen-Cilag – whose parent com pany is Johnson & Johnson – was faced with the chal lenge of attracting the best people. However, the results of a revamped recruitment strategy quickly paid off.

“We started with recruitment as a priority and that got the business’s attention, because they started then seeing the benefit of better turnaround times,” says Whipps. “We started measuring things on a monthly basis, around time to fill rates, and we trained our managers on recruitment techniques so we took it to a more sophisticated level.”

The most significant difference was in the type of per son they chose for the job. By testing candidates on core attributes through occupational psychology and behav iour-based interviews, HR could see who would fit the Janssen-Cilag way of life.

“We have a value position; we value people as indi viduals and together we are inspiring at a team,” says Whipps. “So we assess how candidates align to our credo, which is Johnson & Johnson’s core set of values, and we also question people about what motivates them and gets them up in the morning.”

According to Whipps, the common thing they look for in all potential employees is a passion about making a difference to patients and improving outcomes from a health perspective.

“It’s a differentiating factor; people who work here want to make a difference,” says Whipps. “It’s seldom we hold onto somebody whose motivational drivers are very different to that.”

A financial perspective

There is nobody happier about these developments than the VP of finance, Rod Whittington. “Turnover rates have comes right down, and the quality of people we have recruited has really improved,” he says.

“Our turnover rate at a sales force level was sitting somewhere around the 27 per cent mark back in 2004. Today it’s sitting at around 12.4 per cent.”

The savings made as a result of improved retention has had a direct impact on bottom line results. “A real bene fit for me in having HR as a business partner was that we would sit down and define the competencies of the person we were looking for, how these would align with the tech nical and cultural sides, and then we would go out and recruit on that basis,” says Whittington. “We’ve had a very high success rate. There have been very few recruits that we’ve had to let go at the probation stage.”

Holding on to talent

Once the company refined its recruitment strategy, it then looked at another burning issue that was impacting on reten tion: career development and progression opportunities.

“We couldn’t hold on to people even when we were get ting some good people in,” says Whipps. “And their reason for that, we discovered, was a lack of ability to advance.”

The HR team developed a talent management strat egy that had a direct impact on the bottom line, and which led to winning The SHL Award for Best Talent Management Strategy.

“The talent management strategy has really led us to identify who our top employees are. We do it as a man agement group, and this is what Sue and the HR team have driven,” says Whittington. “It has meant that we have kept really good staff, but we’ve also shown a real commitment to their development. It has had a huge positive impact on the business.

Challenges for 2009 - a financial perspective

"The important thing in a tighter economy is that we continue to invest in our people," says Rod Whittington, VP finance, Janssen-Cilag. "It would be a big mistake at a time when we are trying to retain our key staff not to continue the HR activities we have going that we have been successful with. We must continue to invest in the high-performing people in the business.

"There will be pressures on all business to maintain our cost structures and watch over things very closely, but the worst thing we could do would be to pull those resources away from people because of the economic situation. We have to make sure our people are still treated as the assets and key drivers of the business.

"Finance have been asked to look at our profit targets as a business in the current environment and redundancies is, for sure, where I could find the biggest savings if I wanted to.

"But while that might give us a short-term fix and be very tactical for this year, in the long term it will have a negative impact on the business. So, wherever possible, we will be resisting doing anything that will have a major impact on people.

"Yes we will look at travel and entertainment and pull back on costs because we will have to, but at the same time we will communicate to people the reasons.

"At a time when it's getting tougher … you really need to be able to rely on your HR partners to really support the business. They now have an absolutely critical role to play. When times were good it was great - but when times are getting a bit harder that's when you really have to be there to support your people."

About Janssen-Cilag

Janssen-Cilag was originally two pharmaceutical companies: Belgian company Janssen Pharmaceutica and Swiss company Cilag. In Australia, the two companies merged to form Janssen-Cilag Pty Limited in 1988. This was the first Janssen-Cilag merger worldwide and, since then, the two companies have joined forces in most countries around the world.

Janssen-Cilag is now a leading research-based pharmaceutical company, employing more than 330 staff in Australia. The company provides prescription medicines for a range of conditions in the areas of mental health, neurology, women's health, haematology, gastroenterology and pain management.

The company was the winner of two Australian HR Awards this year - The SHL Award for Best Talent Management Strategy and The Turnaround HRM Award for Best HR Team.

Judges’ comments

Janssen-Cilag won the best talent management strategy award at this year's HR Awards. The judges said: "There is evidence of a clear and integrated talent management strategy in Janssen-Cilag, which drives the HR business plan with clear priorities. This is supported by foundations for success in HR excellence, including, importantly, strengthening HR capability to lead and partner in delivering and driving business growth. The key focus is to engage, challenge and inspire employees to be at their best with a strong emphasis on employee engagement, fostering a high-performance culture, building bench strength and retention of talent. Metrics demonstrate the success of the talent management strategy, with significant success in reducing employee turnover and positive outcomes in succession planning."

It also won The Turnaround HRM Award for Best HR Team. The judges said: “The Janssen-Cilag HR team has embraced an end-to-end approach and evidenced sustainable change and success in everything they do. Their ability to understand the business and work with management in a way that they are respected and valued is evident. Their practices, both innovative and refreshingly simple, were clearly in service of results and relevant to the business needs. Their ability to balance the "in the moment" needs against deeper interventions and then turn that into day-to-day practice that their company embraces is a significant standout. The discipline they show to sustain change, set clear policies and measure this as an ongoing activity is a clear lead and recipe for success.”