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50 S e p t e mb e r 2003 PharmaVOICE clinical trial staffing A T E M P O R A R Y S O L U T I O N the days of temps as lowwage, lowstatus secretaries without benefits have passed. Now highly specialized — and often highly paid — scientists and oth ers involved in clinical research are joining the temp world. Their skills are valued to such a degree that the organizations that employ them often offer medical benefits, paid time off, and retirement options. Contract workers — from clinical research associates, biostatisti cians, medical writers, study coordinators, programmers, and regulato ry affairs personnel — are sought after by pharmaceutical, biotechnol ogy, medicaldevice companies, and contract research organizations. Companies look toward these types of arrangements as a way to avoid the human resource costs of fulltime workers and, more importantly, to meet their staffing needs for certain projects — both short and long term — that need trained people who can produce from day one. “We don’t consider ourselves a temp agency,” says Ellen Maynard, VP of business development, client relations at ClinForce. “We are a B Y D E N I S E M Y S H K O Pressure to find a qualified, reliable contractor combined with fears over employment laws mean that rather than taking on independents companies are starting to turn to staffing organizations that screen and evaluate temporary and longterm assignment workers from across the clinicalresearch spectrum. NICK DEMLING Using freelancers allows companies to get expertise for the particular area that they need it in. niche staffing organization. The caliber and the type of candidate that we supply is very specific to the client’s needs. These are trained, experienced clinical research associates.” According to a CenterWatch analysis, 80% of participants say there has been an increase in the number of professionals becoming consul tants, and 59% believe there will continue to be an increase in the hiring of these profession als in the next two years. The survey, which was conducted this spring, analyzed two market segments: project management functions at pharma, biotech, medical device, CROs, and executive recruiters; and study conduct func tions at sites, including site management orga nizations and academic research centers. the employment landscape The nature of employment is changing, with millions of workers no longer in tradi tional work arrangements. These individuals are part of the workforce that includes tempo rary, parttime, contract, and other nonstan dard work arrangements — a subdivision often referred to as “contingent” work. Whether called contingent, flexible, alter native,, or nonstandard, the portion of the American workforce engaged in nonperma nent or less than fulltime employment con stitutes anywhere from 5% to 30% of the workforce, depending on the type of work arrangements that are included. The contin gent workforce comprises many categories of workers, ranging from highly paid manage ment consultants to lowpaid service sector workers. (See box below.) The Bureau of Labor Statistics defines con tingent workers as people who do not expect their jobs to last or who report that their jobs are temporary. Most experts say the contingent and alterna tive segment of the workforce is growing. American staffing companies employed 11.7% more people across all industries in the first quarter of this year than in the same period last year, according to data from the American Staffing Association. The ASA, whose members provide temporary help, contract labor, and per manent placement services, does not break down data by industry, however. One company that relies heavily on con tract workers is Applied Biotech Inc. At any given time, contract and temp workers consti tute about 25% of the company’s workforce, says Gail Jones, human resource manager. The company uses contract workers for a variety of positions — from administrative and clerical work to production, assembly, and warehouse work to lab tech and chemist level work — and for a variety of reasons — to fill in for vacation and medical leaves, for shortterm projects, and for temptohire positions. “We have trouble finding employees with enough experience,” she says. “With all the col leges in the San Diego area, there are plenty of college students and graduates. That’s great for lab technicians and even for some chemist posi tions. Sometimes, though, we need to find someone with at least five years of experience.” benefits and drawbacks In the CenterWatch survey, 75% of respon dents say there are benefits to working with contractors compared with fulltime staff, CLINICAL TRIAL staffing ELLEN MAYNARD If we can understand what companies are looking for, what their needs are, and the timelines involved, we can be part of their solution. U.S. Workforce by Category of Worker Agency temps 0.9% Directhire temps 2.5% Oncall workers and day laborers 1.7% Contract company workers 0.6% Independent contractors 6.3% Selfemployed workers 4.8% Standard parttime workers 13.2% Total of contingent workers 29.9% Source:General Accounting Office review of Bureau of Labor Statistics data, Washington,D.C.For more information,visit gao.gov. Editor’s note: The information contained in this chart is the most uptodate data (1999) available from the GAO; the study was commissioned on behalf of Congress. Percentage of Total Workforce 51 PharmaVOICE S e p t e m b e r 20 03 52 S e p t e mb e r 2003 PharmaVOICE CLINICAL TRIAL staffing including the ability to hire on an asneeded basis; flexibility; no human resource issues; no training or benefits required; and being able to hire a person for a specific project or time. “Using freelancers allows companies to extend their areas of expertise to meet their clients’ needs,” says Gregg Berkowitz, princi pal and president at PharMed Staffing LLC. Organizations also can determine whether a person is a good fit for the company, says James C. Walker, president and CEO of Octagon Research Solutions Inc., a develop ment partnering organization that uses con tract workers. “We can’t afford to have a high turnover, so using contract workers enables us to find out how well we work with those people,” Mr. Walker says. “It’s worked well over the past few years because some people just haven’t worked out and we’ve been able to let them go.” The projectbased nature of the pharma and biotech industry means staffing needs vary, says Chris Jock, general manager of Kelly Scientific Resources. “Companies don’t want to be straddled with what is perceived as a fixed cost,” he says. Mr. Jock says that contract workers can account for upwards of 10% to 15% of a phar ma company’s workforce. “For some projects, it could account for almost 25% to 30% or more, depending on whether there is outsourcing.” Mr. Walker notes that Octagon employs almost 70 people. “For a small company, employee turnover is pretty costly,” he explains, adding that contractors offer the company flex ibility. “We use them if we feel there is an immediate need but we’re not sure whether there will be followon work. Bring ing somebody in on a con tract basis allows us to gauge work flow while avoiding hiring costs.” As biotech companies grow, they are starting to use more services from staffing organizations, says Nicholas Demling, direc tor of business develop ment at MedFocus. “Companies are using staffing organizations across the board, includ ing to fill positions in the areas of stats, data management, and CRAs,” he says. “Biotechs often work with limited capital from venture capitalists, especially as they start to move out of the research stages and into the clinic. These emerging companies usually outsource their data management, their statistics, and their programming to a CRO. They then tend to rely on staffing firms for project CRAs or regional CRAs.” But while hiring independent contractors allows for greater staffing flexibility, this is by no means a cheap option. Typically, contrac tors are highly skilled and highly paid, mean ing sponsors are likely to pay a premium to hire these individuals. “There certainly is a premium for certain positions, such as biostatisti cians and clinical research monitoring,” Mr. Jock says. “Those positions tend to command higher wages because it takes more to recruit those individuals. On top of wages, those individu als are given a higher level of benefits to attract them to work with a staffing compa ny. It is really driven more on what it takes to find, recruit, qualify, retain, and maintain those individuals.” who’s the boss? Working with contract workers, however, does present some challenges. In fact, compa nies throughout many industries are taking a critical look at their use of independent work ers because of concerns about coemployment issues. In a wellpublicized case in 2000, Microsoft settled a suit brought by temporary workers for $97 million after the IRS determined that the company had misclassified temporary workers. The company agreed to pay overdue employee withholding taxes and to compensate the inde pendent contractors for overtime pay. “Several clients who use consultants have turned to us to help them deal with the coem ployment issue by moving these consultants on to our payroll rather than theirs,” says David Hands, principal and managing partner of MedFocus. “Coemployment has definitely been identified by the larger pharmaceutical companies as an issue, though not yet by the smaller biotech companies.” Ms. Maynard agrees that how companies use consultants has become a cause for con cern. “Because of the Supreme Court decision in the Microsoft case, coemployment is a real issue,” Ms. Maynard says. Using staffing companies can limit the exposure to companies, she says. “Because these workers are ClinForce employees and because we take out their taxes and we pay their benefits, they are far removed from employee status at the pharmaceutical compa ny,” she says. “We’ve worked long and hard to make sure that we’re compliant.” Not everyone agrees, however, that the use of independents is decreasing because of coem ployment issues. “All of the people we have in our network stay busy,” Susan L. Coultas, pres ident and cofounder, InfoQuest Clinical Net work Inc. Ms. Coultas says one of the big issues is whether a company has the right to control the details of a workers’ performance. Whether someone is an employee or an independent contractor is an important ques tion.The answer determines a company’s liability to pay and withhold Federal income tax, Social Security and Medicare taxes, and Federal unemployment tax. In general,someone who performs services for a company is an employee if a company can control what will be done and how it will be done. Thecourts have considered many facts in deciding whether a worker is an independent contractor or an employee.These fall into three main categories: BEHAVIORAL CONTROL. A business has a right to direct and control an employee’s behavior. These include when, where, and how to work;what tools or equipment to use; what workers to hire or to assist with the work;where to purchase supplies and services; what workmustbeperformedby a specified individual;and what order or sequence to fol low. FINANCIAL CONTROL.A business has a right to control the business aspects of a work er’s job, including the extent to which theworker has unreimbursed expenses; the extent of a worker’s investment;theextent to whicha worker makes services available to the relevant market;how a business pays workers; and the extent to which a worker can realize a profit or loss. TYPE OF RELATIONSHIP. An employee/employer relationship can be determined by: written contracts describing the relationship the parties intended to create; whether the worker is provided with employeetype benefits; the permanency of the relationship;and how integral the services are to the principal activity. Employee or Independent Contractor ACCORDING TO THE INTERNAL REVENUE SERVICE THE NATURE OF EMPLOYMENT is changing, with millions of workers no longer in traditional work arrangements. 54 S e p t e mb e r 2003 PharmaVOICE “Most sponsor companies are accustomed to having employees whose daily activities are in their direct control rather than independent contractors,” she says. “In addition, many of our members have established their own com panies so the liability for the sponsor company is not quite so high.” Still, coemployment remains a gray area, Mr. Hands says. “One question that arises is: are these consultants or contractors being treated like employees while they are on site?” he says. “That’s a big issue since the Microsoft CLINICAL TRIAL staffing According to Gregg Berkowitz,founder and president of PharMed Staffing LLC,freelance personnel play an evergrowing role in the suc cess of the medical communications industry. The very nature of pharmaceuticalsupported education and marketing efforts contin ues to require an evolving and specialized freelance community. Today, clients not only are more demanding then ever but also increasingly costconscience. Budgets at medical communications companies are similarly constrained,meaning only a limited number of fulltime personnel can be hired to meet anticipated business pro jects. Yet, the quest for new business is a fulltime and essential pur suit.This, in turn,creates a need for experienced, reliable, and quality freelance help. The medical communications industry is one industry that capi talizes on freelancer workers. Freelance personnel are costeffective, relieving an organization of the financial and logistical commitments of additional fulltime staff, particularly when only project assistance is needed or anticipated. In addition, freelance writers often specialize in particular project areas (monograph, slide kits, etc.) and tend to have more extensive expertise in particular therapeutic areas. While most freelance meet ing planners cover all aspects of onsite events,some specialize in the preplanning or logistics phase. So,depending on the need,the med ical communication organization can select the freelancer with the most applicable expertise to meet the particular client project need. Trying to identify appropriate freelancers can be a cumbersome, time consuming,andexhausting process for medical communication firms. Here are a few tips for success in helping to sort through the pool of freelancers and find the ones who can really provide value to an organization: PHONE SCREENS: Try not to rush a conversation just to hear the freelancer mention the key capabilities needed for a job.A 15minute phone conversation should allow the recruiter to get enough infor mation and build a rapport with a person to determine if that person would be a good fit. Make small talk about nonwork issues. People often provide better insight into their qualities and can reveal a lot more about themselves when talking about everyday things. THE “X” FACTOR: There are some excellent freelance personnel with outstanding resumes, references, and samples. Unfortunately, sometimes with that great skill set may come with “challenging” per sonality traits. A client may change his mind and a project needs to take on a new direction in a moment’s notice. Perhaps, the greatest qualities a freelancer can have, besides skill,are flexibility and a will ingness to work with a client and accommodate changes in timelines or deadlines. STARTSMALL: It’s a good idea to give a person a small,preliminary project to test the waters.Later, offer the freelancer work on big pro jects to test additional abilities. This method enables an employer to evaluate how the person fits, how he or she works, and how to best work with that person. BRING THEM IN: The best time to talk to freelancers is when the company doesn’t need them.When a person isn’t under the gun to find someone as soon as possible, it is easier to evaluate a freelancer’s capabilities andpotential fit within the organization.Whenanoppor tunity does arise, the company already has taken the opportunity to speak with that individual and formulate an unhurried and unbiased opinion. WORKWITH AN AGENCY: If an organization does not have the time and/or resources to find freelancers itself, it should consider working with an appropriate freelance agency that specializes in its field or need.These organizations offer a valuable, extra level of secu rity in helping to find qualified freelancers.They should be thorough ly screened, evaluated, and tested by the agency. While there are no guarantees, a reputable agency will increase an organization’s ability to provide quality and timely outcomes. Most freelance companies are built around a business model that only charges a fee if the client uses someone the agency has recommended. Following these suggestions will hopefully help make the task of finding a qualified freelancer that much easier. Source:PharMed Staffing LLC,NewYork.Formore information, visit pharmed staffing.com. Working with the Freelance Community GREGG BERKOWITZ Freelance personnel play an evergrowing role in the success of the medical communications industry. 56 S e p t e m b e r 2003 PharmaVOICE CLINICAL TRIAL staffing ruling. Many of our large pharmaceutical clients have limited the tenure of our consul tants, no matter how good they are, to avoid uncertainty.” Classifying workers correctly is important not just from a tax perspective, but also from a labor law perspective. Employees are pro tected under the Fair Labor Standards Act, which provides standards for worker wages, hours, overtime, and minimum wage. The Department of Labor has tried to clar ify current laws. In general, an employee, as distinguished from an independent contractor, is one who “follows the usual path of an employee” and is dependent on the business that he or she serves. According to Daniel Perlman, CEO and president of ReSearch Pharmaceutical Services Inc., using staffing organizations may not completely shield pharmaceutical companies from liability, especially if a staffing company is using independent contractors. “It is an issue for pharmaceutical compa nies to monitor and control contractor rela tionships,” Mr. Perlman says. “Each company has its own rules about the use of contractors. Go to five different pharmaceutical companies and each will have a different set of rules for coemployment.” For a small company, turnover is pretty costly. We use contractors if we feel there is a small initial need but we’re not sure about followon work. Bringing somebody in on a contract basis allows us not to incur any hiring costs and gauge the work flow. JAMESWALKER SHELLY CAROLAN The benefit of using a service versus hiring staff is that companies can keep projects on schedule.There are a lot of things — such as staffing up, training, employee management, the screening and verification of candidates — that are not necessarily expensive but can take a lot of time. s Right now, the pharmaceutical industry is looking to cut costs. Companies are now weighing between hiring contract staff and running trials internally or outsourcing them completely to a CRO. t The goal of using a contractor is to bring someone in who can provide instant success to the project without human resource commitment. It might be cheaper to hire in most situations,but companies would be missing the opportunity to bring somebody in who is going to have instant success. DAVID HANDS DAN PERLMAN 57 PharmaVOICE S e p t e m b e r 20 03 CLINICAL TRIAL staffing Being flexible is key for overcoming some of the issues related to coemploy ment, says Christine Ver Straate, VP of business development, PharmaPros Corp., which uses contract and independent workers to extend their team and sup port key projects. “Our con sultants can work their own hours,” she says. “They use their own equip ment. In our case, we’re very flexible and we’re not dictating hours. But once committed to a project, they are responsible for meeting their deliverables and producing topquality work.” best practices Mr. Walker cautions that companies need to be careful about who they select to conduct employee searches. “We’ve had more success finding people on our own, only because we’ve had some good references from our own employees. It is really hard to find quality people, even through orga nizations that have a big database of contractors.” Some staffing organiza tions don’t assess the con tractors as well as they should, he cautions. “We’ve run into a lot of people who don’t listen to the job requirements and the description of the type of person we’re looking for,” Mr. Walker says. “I know right away that we’ve chosen the wrong recruiter if I get 10 resumes that day. If it was that easy to find somebody, I wouldn’t need a recruiter.” Those on the recruitment side, however, say that if a company truly enters into a partner ship with a staffing organization, it can facili tate the process of finding the right contractor. Mr. Berkowitz agrees. “The most impor tant thing is for the staffing organizations to understand the dynamics of a company — how it conducts business, what its business philosophy is, and how it likes to work with freelance personnel,” he says. “Once the staffing organization understands this critical information, then it can begin to determine how to satisfy particular clients’ needs and who would be a good fit.” Communication is especially critical when working with a staffing organization, says Shelly Carolan, senior VP, lab support, with On Assignment Inc. “The better the commu nication between the technical resources of the agency and the technical resources of compa ny, the better fit companies will have right off the bat,” she says. F PharmaVoice welcomescomments about this article.Email us at email@example.com. Experts on this topic GREGG BERKOWITZ.Principal and president,PharMed Staffing LLC, NewYork; PharMed Staffing identifies, screens, interviews, and evaluates potential freelance personnel with experience in medical education,communications,and advertising related to the pharmaceutical industry.For more information,visit pharmedstaffing.com. SHELLY CAROLAN.Senior VP, lab support, On Assignment Inc., Calabasas, Calif.; On Assignment provides healthcare and science staffing professionals to leading healthcare institutions and research firms.For more information, visit onassignment.com. SUSAN L.COULTAS.President and cofounder, InfoQuest Clinical Network Inc., Burleson,Texas;InfoQuest Clinical Network is a network of independent clinical research professionals providing a full spectrum of clinical research services to pharmaceutical,medicaldevice,and biologic companies.For more information, visit infoquestclinical.com. NICHOLAS DEMLING.Director,business development,MedFocus,Des Plaines, Ill.; MedFocus offers clinical research contract consulting and staffing to the pharmaceutical,biotechnology,and and clinicalresearch organizations. For more information, visit clinforce.com. DANIELPERLMAN.CEO and president, ReSearch Pharmaceutical Services Inc., Plymouth Meeting,Pa.; RPS provides customized solutions to assist companies with the management and execution of their drugdevelopment programs as well as specialized staffing arrangements.For more information,visit rpsweb.com. CHRISTINEVERSTRAATE.VP of business development,PharmaPros Corp., Cambridge,Mass.;PharmaPros is a clinical services organization that offers expert products and services focused on the implementation and integration of clinical technology with optimal business processes, training and support to the pharma,biotech,device, and CRO companies.For more information,visit pharmapros.com. JAMES C.WALKER.President and CEO, Octagon Research Solutions Inc., King of Prussia, Pa.; Octagon Research offers a suite of regulatory electronic submissions, regulatory affairs, clinical data management,statistical,and information technology services to the lifesciences industry. For more information,visit octagonresearch.com. medicaldevice industries. For more information,visit medfocus.com. DAVID HANDS.Principal and managing partner,MedFocus, Des Plaines, Ill.; MedFocus offers clinical research contract consulting and staffing to the pharmaceutical,biotechnology, and medicaldevice industries.For more information, visit medfocus.com. CHRIS JOCK.General manager,Kelly Scientific Resources,Troy,Mich.; Kelly Scientific Resources (KSR), the scientific business unit of Kelly Services,provides scientific staffing services on a temporary,project, and fulltime basis to a broad spectrum of industries. For more information,visit kellyscientific.com. GAIL JONES.Human resource manager, Applied Biotech Inc., San Diego; Applied Biotech is a developer,manufacturer, and marketer of pointofcare, rapid diagnostic tests and is a subsidiary of Apogent Technologies Inc., which manufactures laboratory, lifesciences, and diagnostic products. For more information, visit abiapogent.com. ELLEN MAYNARD.VP,business development, client relations,ClinForce,Morristown,N.J.; ClinForce,with headquarters in Research Triangle Park,N.C.,provides contract staffing and direct hire recruitment services for pharmaceutical,biotechnology,device, CRO, THE INDUSTRY currently is being especially careful about the use of independent workers. But in the future, companies will likely start to employ longerterm contractors.