WalkWater’s leadership hiring trends in India’s API industry are based on research involving 51 API companies and 120 leadership-level candidates. Only four of these are multinational companies and the rest are all Indian firms.
The active pharmaceutical ingredient (API) industry is facing a high churn in leadership talent amid a sharp increase in investments, according to a report by executive search firm WalkWater Talent Advisors.
The high talent churn and the demand-supply gap have led to a rise in compensation levels in the industry, with companies also resorting to extending the retirement age to cope with the scarcity in the short term, according to the report.
Rahul Shah, co-founder and director at WalkWater Talent Advisors, said around 40% of the manufacturing leadership talent in the API industry has moved in the last three years, and are either joining private equity (PE) platforms or at senior levels in other companies. “The API sector talent is moving at 40-50% salary hikes, unheard of in the sector, and are now attracting FMCG-industry kind of salaries,” Shah added.
The demand for site heads, cluster heads and chief operating officers (COOs) managing plants is on the rise, the report said. “You cannot import talent into the industry because most of the hiring is happening within the industry. So, there is a premium put on existing leaders and extending of tenures,” Shah said. Moreover, the domestic API industry is “very risk-averse” and has not picked up talent outside the industry. Prakash HS, vice-president, pharma and life sciences, WalkWater Talent Advisors, said, at the chief operating officer (COO) level, the median age is now at 55 years and 37% of the COOs are 55 years of age or above. For cluster heads, the median age is 53 years and for site heads, it is 51 years. The talent is moving upwards to site heads, then to cluster heads and then to COO levels.
“Everybody comes from the shop-floor level, either from the quality or production executive level…People hardly move from another sector because of the regulations associated with the pharma sector. As manufacturing capabilities are increasing, the regulators are becoming more stringent when it comes to approvals,” Prakash said. The WalkWater report also expressed concerns over diversity as there are no woman leaders in the manufacturing function across all API companies. All companies studied for the report have 100% male leadership in manufacturing roles.
“There is no diverse talent at the leadership level and the industry has never invested in good talent management strategies…Moving people around within the industry cannot be a long-term strategy,” Shah said. Attracting diversity at entry level and getting talent from outside the industry is the need of the hour, he added. The report further said Andhra Pradesh, Telangana, Maharashtra, and Gujarat are the three emerging talent clusters, constituting over 82% of leadership talent. WalkWater’s leadership hiring trends in India’s API industry are based on research involving 51 API companies and 120 leadership-level candidates. Only four of these are multinational companies and the rest are all Indian firms.
Source: Financial Express