Monday, December 2, 2013

C&EN on contract employees

C&EN's Linda Wang does an impressive job, as usual, in getting people to talk frankly about temporary/contract employment in the pharmaceutical industry. The article starts off with a terrible (and terribly common) anecdote: 
After being laid off in 2010 from the pharmaceutical company Roche, where he had worked for nearly 14 years, Paul Oleas thought it would only be a matter of time before he found another permanent position. 
But after six months of searching, and no full-time opportunities in sight, the pharmaceutical chemist accepted a six-month contract position with MAP Pharmaceuticals. At the end of the contract, Oleas was offered a full-time position. His relief was short-lived, however, as the company was acquired by Allergan, and Oleas was laid off again. 
Oleas is now in his third short-term contract position in as many years, and he’s accepted the possibility that he may never attain the sense of permanency he once had. “You have to roll with the punches,” he says. “And you have to try to make the best out of it that you can.”
Interesting comments on people with contigent positions:
Within the American Chemical Society membership, roughly 3% of industrial members who responded to the 2013 ACS Comprehensive Salary & Employment Survey reported being in a temporary or fixed-term contract position (C&EN, Sept. 23, page 9). Although this percentage has stayed relatively flat in recent years, new graduates, with a current unemployment rate of more than 12%, may in fact experience a higher rate of temporary work, says Gareth Edwards, senior research associate in the ACS Research & Brand Strategy department. 
Gold says that five years ago, Fairway Consulting Group wasn’t involved in providing contractors, only full-time employees. Now, he says, filling these positions brings in 15–20% of the company’s revenue. 
Similarly, Marc Miller, senior director of medicinal and process chemistry at life sciences recruiting firm Klein Hersh International, has seen an uptick in contract and temporary hiring. Approximately 20–25% of the firm’s placements are for contract positions, and he anticipates that percentage will grow. “I think you’ll see it move toward almost a 50-50 split between permanent and contract hiring into 2014 and 2015,” he says.
What is weird about contract positions is that my impression is that they are paid lower, not higher than full-time positions. You would think (and for some organization (i.e. hospital nurses), it is) that this would not be true, that the temps make more money to compensate them for taking on a more contingent position. That doesn't seem to be the case in the pharmaceutical industry, although perhaps I am wrong.

The professor quoted in the article echoes my concerns fully:
The growth of a contingent workforce worries Erin Hatton, an assistant professor of sociology at the University at Buffalo, SUNY, and author of the book “The Temp Economy: From Kelly Girls to Permatemps in Postwar America.” “Not only do these jobs not offer any sense of job security, these jobs also pay lower wages and offer worse benefits,” she says. 
Permanent employees could also be affected by the rise of contingent workers, Hatton says. “When workers are worried about being replaced by contingent employees, they’re more willing to accept lower wages and worse benefits packages.”
Quite so. Thanks to Linda for a worthwhile article, if a bit depressing. Best wishes to the permatemps, and to all of us. 

10 comments:

  1. During my years as a fellow in a government lab, I got the chance to see what our laboratories paid out for a contractor. I was lucky enough to be good friends with one of the contractors and knew what his salary was at the time. This was information I gained by mistake while in my bosses office using the printer and he was the director of the laboratories. My friend's annual salary, the contractor with Kelly, was $60K and our laboratories paid Kelly $115K for use of this contractor. Oh, and as a research fellow I was paid $62K per year.

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  2. I've seen two different pay scales used for non-permanent employees; one for routine work/workers, and one for non-standard work / workers.

    Routine work is what I did in two diff contract positions - I did the same day-to-day work as a temp as my colleagues did as perm, with the exception of CRO site visits and higher-level meetings (I didn't got). This was all at a lower base rate (~20% less base pay, no performance bonus), and worse benefits than the perm folks.

    Non-standard is work is how I'm describing people like the high-skill manager/senior sci level folks that were brought in on 1-6 month contracts to specifically correct deficiencies in current processes / systems. These were experts in an area like 21CFR compliance, or clean-room operations, etc. who'd have a set of defined responsibilities / jobs to finish. They were usually compensated at a multiple of "standard" pay to compensate for the lack of benefits / permanence (2-3x a perm's annual salary).

    I work at a company with a substantial temp workforce, and am of several minds of the entire enterprise. On one hand, temp does allow the flexibility to adjust your staffing to the shifting needs of projects / tasks, and it allows you to evaluate employees in a trial period and only commit to someone who has proven themselves. However, when you maintain people on contract for 18+ months, and constantly maintain ~15% of the positions as temp, there's a pretty defined need for people in those positions, so why not just codify them into perm spots.

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    1. That ~ 15% figure you discuss corresponds to my experience as well. ACS's ~ 3% figure seems way off the mark. I suspect this relates to a discussion we had a couple months back around here about why ACS salary estimates are inflated as well.

      Who do you think is more likely to be an ACS member at your company - your highest ranking chemist, or the temp? Unless the chances are equal, ACS's average salary and permanant vs temp ratios are going to be skewed.



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    2. I think that this is the key issue at hand...lack of benefits. I did contract work for a government lab for a while. My wife and I actually delayed having kids because our health insurance (paid for out of pocket) didn't cover it. Retirement benefits are another huge issue. Not having access to a 401k, especially with no sort of matching is no way to allow our young (or old) scientists the time it takes to build to a successful retirement. Yes, you can save through an IRA, but the time value of $6k/yr is not the same as $17k/yr.

      Furthermore, having "contract" hanging over your head like an axe is awfully depressing, knowing that you will be the first one cut long before any of the slackass fed employees (not all were like that, but even the worst feds would be kept before you in a RIF).

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  3. Permanent employees could also be affected by the rise of contingent workers, Hatton says. “When workers are worried about being replaced by contingent employees, they’re more willing to accept lower wages and worse benefits packages.”

    I imagine there's a fair amount of this at Lilly, given there are floors of non-Lilly chemists making compounds...

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  4. I've been a contractor in the same job, in the same group for two years. And I'm incredibly fortunate. I have been blessed to have a manager who actually has been giving me progressively more duties/responsibilities so that I can develop my career. I'm being paid a fair wage, relatively speaking. The only thing that I really could ask for is (a) some of the truly outstanding benefits package they offer normal employees, (b) opportunities for raises, and (c) backing for admission to professional organizations.

    You see, I get paid a certain amount, $X. The company pays 1.3*X to my staffing agency, which presumably covers taxes, unemployment, (crappy) benefits, and the "finders fee" for the agency. In theory I can move up the pay rate X by doing an increased work load/more complex work load. But that's really the only way to do it in my job. I had a colleague who had successfully won the battle to increase X by threatening to go somewhere else which would have paid him more. But then he was inexplicably not renewed for his contract whereas all the other contractors in the group remained. So really his fate is serving as a warning to all the other contractors in the group to not try for more. The company, meanwhile, treats their employees very well. Annual profit-sharing checks, peerless healthcare benefits, both the options for a pension AND a 401k that is matched 100% up to I think 7% of annual income, tuition reimbursement, free products for everything that the company sells, and 2% minimal annual raises. Considering how I do just as much work that drives profit as much as my coworkers, it really gives me the rub that I get no room for salary increase, and the only benefit I get is the option to purchase the overpriced insurance via my recruiter**. Really, I'm pretty sure that if you work the numbers if they were to just hire me and cut out the middleman it would cost them the same or less for the next few years.

    The only issue with regards to professional development that I have is that they can't vouch for me for professional orgs which require years of experience as an entry requirements (RAPS, ASQ, ASP come to mind). So now I'm stuck in this cycle of "The permanent position requires XYZ professional membership, but I don't have that and can't get that because I'm not in a permanent position anywhere."

    ** It doesn't qualify for the minimum value required by the ACA, and costs me about 3x more than comparable coverage I can get on the exchange

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  5. My old man's retirement safety job, of owning the ethnic store, is paying off pretty well so the mortgage on his house is paid off early and he's thinking of quitting the organic chemistry research job early. He also recently bought a restaurant that he's turning into a jazz bar and a Greek pizzeria that is going to stick to being a Greek pizzeria for the next little while. He's looking for someone to be a manager for the pizzeria or the ethnic store. It's a position that an organic chemist who is used to a lot of responsibility is perfect for and you could talk to my old man about nasty synthetic routes or reagents from your old life, after work. Plus it's a position with a future and relative permanence compared to the pharma industry these days.

    Technically it's in Canada so you don't have to worry about dying from a treatable disease as you'll have medical insurance after six months of being a resident and pension is taken care of for now. I would take the position myself, but I'm a bit young and I want to give this 'chemical research career' thing a try first.

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  6. I think it's exciting to see that chemists are capable to adapt so well and create a mobile workforce. Hopefully it will help us as a society to tackle looming crisis and stem the widening of the skill gap.

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  7. "What is weird about contract positions is that my impression is that they are paid lower, not higher than full-time positions. You would think (and for some organization (i.e. hospital nurses), it is) that this would not be true, that the temps make more money to compensate them for taking on a more contingent position. That doesn't seem to be the case in the pharmaceutical industry, although perhaps I am wrong."

    I've been working as a contract/temp worker for the past few years and I have experience in the food industry and in formulation chemistry. We get paid significantly less than full time employees. Also, no benefits.

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  8. The Adjunct Professor was one of this year's Chronicle of Higher Education "Newsmakers".

    http://chronicle.com/article/The-Chronicle-List-This/143485/

    Maybe next year it will be the "The Laid Off Pharmaceutical Scientist"? At least we will get some more publicity.

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