CRO Employee Turnover Rate Spikes

CRO Employee Turnover Rate Spikes

March 29th, 2013 // 1:58 pm @

As the contract research organization readies for a rebound this year, many CROs may find their trusted employees are getting ready to walk out the door. These companies are experiencing “dramatically” higher turnover rates compared with other industries, thanks to a hot job market in the CRO sector, according to a new survey.

Quality Agreement Tip – Remember Definitions!

Specifically, the turnover rate among CROs last year was 12.5 percent compared with a 1.5 percent national turnover rate. The rate reflects voluntary departures among people who left for new positions with higher compensation or greater opportunities, according to HR+ Survey Solutions, which queried 17 public and private CROs that, collectively, employ tens of thousands of people.

Why is there such turnover? CROs may want to look closely at how they treat existing employees – the take-away message from the survey suggests there is more value placed on new hires. The survey noted that 65 percent of CROs use sign-on bonuses to lure new talent, yet only 29 percent offer retention bonuses to retain employees. Meanwhile, target annual incentives and projected long-term incentive levels are markedly lower for CROs compared with other industries.

Exclusive Expertbriefings.com Compliance News

For instance, CRO execs with salaries of $250,000 were eligible for, on average, a target annual incentive of 26 percent of their salary and a long-term incentive of 35 percent. But execs situated in similar positions in other industries were eligible for annual incentives and long-term incentives of 44 and 51 percent, respectively.

Moreover, 90 percent of senior vp’s and vp’s were eligible for annual incentives, but only 50 percent actually received any. About 40 percent were eligible for long-term incentives, but only about 35 percent to 40 percent received a grant.

At the manager level, 65 percent were eligible for annual incentives, but 45 percent received bonuses, and 6 percent were eligible for long-term incentives, but only 2 percent received them. At the director level, 47 percent received stock options and 53 percent received long-term incentive bonuses. And business developers earn bonuses that are, on average, 1.7 to 4 times higher than non-sales positions.

Further down the ladder, the survey found a 24.5 percent voluntary turnover rate among clinical research associates. The rate was nearly 20 percent among project managers and 13 percent among data managers. “In many cases, CRAs and project managers work from home, but (actually) spend much of their time away from home at the clinical sites,” Judy Canavan, who heads the firm, writes us.

“My understanding is that employees will switch jobs for a variety of reasons including location of the study (if they prefer the location of the study to which they will be assigned), nature of the study (e.g., oncology vs. ophthalmology), opportunity to gain needed experience to round out resume, pay, and promotions. The project managers had very high turnover outside the US in 2012, but I cannot say exactly what caused that.”

“If they want to keep people,” she continues, “they have a lot of opportunities to use compensation and to do so in more strategic ways, such as increasing performance based pay. Right now, there’s a tendency to use recruitment bonuses to hire people away and think the cro’s could switch that around a little bit and use a bonus to keep people.”

Source

Upcoming Expertbriefings.com Webinars 2013

Check out our latest FDA drug and device news, too


Subscribe Now

Testimonial

"ExpertBriefings.com always selects excellent speakers – some of the best I have ever heard. Their messages are direct, clear, timely, and relevant."

Anon A. Mouse

Featured Partner