If you’re working in the Life sciences sector, you can expect the best salary hike this year

The Life Sciences sector in India has seen significant growth in the last decade contributing to the country’s overall economic growth story. This growth can be attributed to many factors such as the improving quality of living, changing demographic profile, the rise in prevalence of lifestyle diseases, the low cost of production and the availability of technical talent. The growing pace of medical tourism and increased public spending in healthcare are opportunity areas for this sector.

Over the last few years, the rise of this sector has seen a slight fall due to pricing and cost pressures and continued consolidation. Therefore, there is an increased focus on making the value chain efficient and becoming future proof by building research and innovation capabilities.

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According to Aon Hewitt’s 21st India Annual Salary Increase Survey, from a rewards perspective, there is going to be fall in projected salary increase for 2017. This is in tune with the fall in overall salary increase projection across all the industries for India region.

Pharmaceutical:

The Indian Pharmaceutical industry grew at a CAGR of 17.46 % from 2005 to 2016. Currently, the size of the sector is around USD 36.7 billion and is expected to grow at a CAGR of 14.5% over the next few years.

However, 2016 hasn’t been a stellar year for the Pharma Industry with uncertainty in drug pricing in the US which saw a price deflation of generics affecting leading Indian Pharmaceutical companies which manufacture a significant proportion of generics for the world from India. In the domestic market, organizations have tried to scale up their value chain presence, but these moves are expected to reap benefits in the long term.

Therefore, heading into 2017, there is a strong focus on capability building, specific focus on high-performing therapy areas and improving research capability to drive growth while keeping a watchful eye on the bottom-line.

Medical Technology:

The Indian Medical Technology sector is expected to reach USD 8.6 billion by 2020 and grow at a CAGR of 15% in the near term. While ‘Make in India’ aims to provide impetus to the manufacturing of medical devices, this sector continues to be an import-dominated and the effects of recent regulatory changes are yet to be seen.

Some of the key themes worth highlighting are increased the interest of global players in the Indian market due to vast potential and focus on building India specific technologies and products. However, the biggest hurdles that organizations face in India are currency fluctuations and lack of affordability.

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CRO:

The Clinical Research industry in India has seen promising growth in the last few years. Globally this sector has been growing at a CAGR of 11.5%. The success of this industry in India can be attributed to the availability of relevant talent, cost efficiency, large patient pool and varied disease prevalence rates. While the cost of conducting clinical research in India is nearly half of that in the USA, this advantage is expected to diminish over the next few years.

Therefore, CROs have already begun to focus on improving value and service delivery to their partner organizations, aiming to grow in both breadth and depth of the solutions that are on offer.

Talent & Rewards trends

Poonam Chopra – Industry Lead – Consumer &Life Sciences Sector, Aon Hewitt commented that ” Life Sciences has had the highest salary increase across sectors as this Industry flourishing due to macroeconomic factors.”

Life Sciences industry has seen high salary increases in the last few years. However this year there is a fall in the projected salary increase for 2017 which is 11.3%. This is down from the salary increase for 2016 which was 11.5%.

The pharmaceutical industry has seen a drop in salary increase from 11.7% in 2016 to 11.4% for 2017. The projected salary increase for medical devices and CRO industries would be 11.2% and 11.3% respectively. This drop is in tune with the fall in the drop in the overall salary increase for India.

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While there is a fall in the salary increase numbers for the industry, it continues to lead multiple other industries in terms of salary increase. The reason for high salary increases in the Life Sciences industry vis-à-vis other industries would be the low base pay which is seen in the industry. Therefore there has been a focused attempt to correct this aspect of pay with respect to the other industries.

While the attrition in 2016 has decreased with respect to 2015 from 19.1% to 17.3% it is still a key concern for organizations.
The variable pay in the industry has mostly been stable over the years and projected variable pay spending for 2017 would be 16.48%

In light of the changing industry and macroeconomic scenario, it is imperative to look at rewards beyond compensation to attract and retain niche talent. It would be interesting to observe how the industry would prioritize the other aspects of rewards in future.