Pharmacy managers should be careful not to overlook their most important assets: employees.
If you ask pharmacy leaders and managers to list their companies’ assets, they will usually begin with physical resources and the drugs and biologics that line their shelves, or the product lines they manufacture and market. Indeed, these assets have high dollar values and, on a spreadsheet, they represent gigantic capital investments. The company’s most valuable asset, however, is probably missing from the spreadsheet’s rows. A company's most valuable asset is its employees—the people who find and interact with customers, create goodwill, and represent the company to the public.
Few Jobs, Many Applicants
If this is the case, why do so many leaders and managers forget to appreciate employees as assets? Part of the answer is history, especially recent history. With unemployment high and applicant pools bursting, many managers have come to see employees as interchangeable and replaceable. This has never been a wise position, and it’s becoming increasingly unwise. United States employment experts project that 50 million baby boomers will retire over the next decade, leaving a deficit of approximately 10 million workers. It appears that the shortfall will be especially acute among the brightest and most educated workers—those who are always the most difficult to recruit and hire. These also happen to be the type of workers needed in pharmacy-related businesses.
What’s more, employee attitudes have changed. Younger employees are less likely to feel loyalty to their employers and more likely to be on the lookout for better opportunities. While a higher salary may attract these younger employees, they may also be lured by family-friendly workplaces, flexible benefits, good growth potential, and a receptive, welcoming work environment. And, increasingly, employees want to work in enlightened organizations that keep pace with new technology and have policies that are broad-minded and inclusive.
Examining employee satisfaction and retention in your workplace is critical. Good employees develop good relationships with customers, which helps ensure that these customers return. Employees also contribute to your reputation: cheerful, skilled, and articulate employees improve it; employees who are anything less detract from it. Hard assets are one thing, but without employees and the customers they attract, hard assets are simply numbers on a spreadsheet.
Employee turnover affects your customer base. Most customers don’t like change, and losing a favorite pharmacist, technician, or business contact may cause them to take their business elsewhere. In addition, turnover is costly for organizations. You have to pay overtime (or allow tasks to pile up) while you look for a replacement employee; pay administrative personnel to process the departure paperwork, separation, or severance pay; and sometimes, incur higher unemployment compensation premiums, which may be calculated in part based on employee turnover. A critical vacancy can also cause workplace stress as other employees try to cover the increased workload, and morale problems, especially if the employee was a thought leader. Some workplaces see a mass exodus when an exceptional or influential employee leaves, and the ripple effect can be extremely expensive.
The Cost of Doing Business
Replacing a departed employee can be costly, too. Costs including advertising, screening applicants, conducting interviews, and processing pre-employment paperwork can add up to thousands of dollars. Further, few employees walk into a workplace and begin to work at 100% efficiency. You still need to train the new hire. The Center for American Progress
has determined that it costs approximately 16% of an annual salary to replace employees who make less than $30,000 annually. The costs rise to roughly 20% for employees who make more than $30,000, and the costs are higher still (approximately 30%) if the job requires higher education. Replacing an executive can cost more than twice their annual salary.
To determine whether you have a problem, look at your employee turnover. Nationally, employee turnover averages 12%. If more than 12% of your employees have left each year in the last few years, you may have a problem. Review data from exit interviews. (If you don’t conduct exit interviews, you need to start doing them. Today’s best managers have human resource policies in place that solicit feedback from incoming and, especially, departing employees). If former employees have identified reasons for leaving, examine them carefully and consider how you can address them. Review your policies, considering whether each helps or hurts employee satisfaction. In addition, ask employees from time to time if they need anything to help them do their jobs better or if reasonable changes to policies or processes would help.
Ms. Wick is a visiting professor at the University of Connecticut School of Pharmacy and a freelance writer from Virginia.