HR and legal practices in the post-pandemic era

India is now in the third position in terms of cases of infection by the SARS-CoV2 virus, with the US and Brazil in the top two positions. The country has the fifth-highest number of deaths due to COVID-19, as per the COVID-19 dashboard by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University.

However, the COVID-19 cloud is not without a silver lining. As per Ministry of Health & Family Welfare data, as of August 8, 68.32 per cent of COVID-19 patients in India (1427005) were discharged/recovered while 2.04 per cent (42518) died due to the pandemic.

This relatively low death rate is thanks to the availability of repurposed medicines. Thanks to manufacturing collaborations within the pharma and vaccines sector, patients’ lives have been saved using repurposed medicines. And hopefully, with more than 160 vaccines at various stages of research globally, including six which have advanced into stage 3 trials, there is hope that one day, we might be able to protect our populations from the SARS-CoV2 virus.

As the sector supplying the ammunition to fight the virus, the pharma sector in India, like its global counterparts, could not shut down. And thus bore the brunt when a national lockdown was announced in March, followed by an exodus of migrant labour back to their villages.

This exodus hit some companies harder than most as they were expanding production, to diversify their supply chains of key starting materials (KSMs) and active pharmaceutical ingredients (APIs). The border tensions with China further underline the need to hasten rather than postpone these measures, even though the supply of APIs from China have now resumed, with prices too moderating to more reasonable levels.

But one of the learnings from the COVID-19 pandemic and the simmering border tensions is that pharma companies will have to re-look their HR policies.

“A post-COVID-19 world will see a new job market, especially in the field of pharma, health and hygiene,” points out Pooja Ramchandani, Partner, Shardul Amarchand Mangaldas & Co. This is because the Indian pharma industry now caters to the global demand of pharmaceuticals as one of the most favoured destinations for producing high-quality generic medicines sold around the world.

Being an organised sector, pharma companies and its employees/workers are governed by well-defined labour laws. Thus Ramchandani feels that in a post-pandemic era, the HR and legal practices would need to be tailor-made keeping in mind the safety and well-being of the employees and the targets and size of the company. She predicts that changes would include matters concerning working hours, leave structure, office safety protocols, and training sessions on post-COVID-19 norms, amongst others.

“The important considerations post the pandemic would revolve around job security and other ancillary considerations majorly circumvented by health and safety concerns along with contemplations about remuneration,” highlights Sonam Chandwani, Managing Partner, KS Legal & Associates

Chandwani believes that the next quarter is marked to witness reshaping of the biopharma business model in India influenced by varied market forces and that HR considerations will be of paramount importance in these plans to emerge self-resilient.

Pointing out that there is an immediate requirement of a huge skilled workforce to enable India to emerge with a flexible pharma sector, she believes that the industry is likely to get into short-term agreements with much of the current workforce, to build the foundation of a robust sector.

She also predicts that employees will demand higher benefits and added health protection opportunities under the terms of employment. The changing dimensions of labour considerations would necessarily have to be aligned with the provisions of the newly introduced Wages Code Bill.

Atmanirbhar Bharat

Many pharma companies are participating in the government’s schemes to boost the manufacture of KSMs, drug intermediates and APIs to reduce India’s dependence on exports, especially from China. As the Department of Pharmaceuticals firms up the guidelines for the promotion of bulk drug parks and production linked incentive schemes, do we have the skilled resources to run such facilities? Hence the time to starting planning is now.

Dheeraj Nair, Partner, J Sagar Associates suggests that this may be an area where the government can step in and assist in meeting demand by training persons through skill-based training institutions. “Provision of common infrastructure like logistics, laboratory testing, training centres etc. by the government could provide an answer. This may be done by state governments in bulk drug parks.”

The contract vs permanent debate

The pharma sector has traditionally employed a fair amount of part-time/casual labour depending on production schedules. Will this change post the pandemic? Will companies prefer to train their workforce to manage with less staff, so that they can offer better facilities like on-site/near-site accommodation, etc?

Chandwani believes that this is where the pharma sector is perhaps set to see a major structural overhaul, with the cutting down of much of its part-time casual labour. She harks back to the COVID-19 nationwide lockdown when thousands of labourers were laid off. As the industry resumes, the fear of infections lingers over individuals getting back to work.

“The possible solution here,” suggests Chandawani, “would be to reduce the number of labourers to be in a position to provide better facilities including health and hygiene measures.”

The flip side would be that the reduction in the number of employees would entail higher work pressure for the employees with rigorous training and staff management programmes. In turn, the employees could be provided for added transportation and accommodation facilities taking into account the current worsening situation, suggests Chandwani.

Ramchandani also highlights that in addition to shortages and higher-priced APIs from China, inter-state transportation hurdles due to lockdown in various states added to the woes of pharma manufacturers.

But she believes that a paradigm shift from the current model of employing part/time casual workers to permanent staff will depend on various factors including the size and the organisation structure of the company, availability of trained staff for production and marketing in this field and the COVID-19 situation in India. Depending on these factors, companies may or may not adopt a change in their workforce model.

Nair too says changes in hiring patterns would depend on size and growth prospects of the specific pharma company. Even so, he spotlights certain key areas (such as quality assurance) where there is a requirement for skilled workers and hence such persons are likely to be employed as full-time staff.

He too agrees that in the post-COVID-19 scenario, pharma companies, depending on their size and expansion plans, may also consider providing housing for the labour force and keep them on-site/ near-site to avoid any disruptions in production.

New product lines post-pandemic

Thanks to the pandemic, the pharma sector has seen more, not less demand. As other sectors are contracting, the pharma sector has actually seen higher sales of medicines as customers/patients stocked up on medicines in certain months, besides higher demand for vitamins, supplements and the like to build immunity.

In fact, as Nair puts it, the increased demand for certain items such as PPE kits, sanitisers etc. in this pandemic has opened up new business or product lines for pharma companies.

Thus unlike other sectors where there have been significant layoffs on account of the loss of business and workforce disruptions, he points out that the pharma sector has remained relatively unaffected in terms of layoffs.

But the dearth of labour could be a speed-breaker. According to him, most pharma companies are working on the basis of shift timings and adapting to COVID-19 related restrictions on physical distancing with multiple shifts.

As demand increases, to meet higher production schedules, pharma companies may have to either hire more staff or increase shift timings by paying overtime to existing workers working in multiple shifts, reasons Nair.

He points out that pharma companies may also have to consider automation of processes to meet demand and training of people to adjust with such automation.

For example, he says companies engaged in the medical technology sector may focus on hiring staff with expertise in artificial intelligence, to decrease the timing taken between the drug discovery phase to the marketing phase.

Chandwani warns that existing employees will have to compensate for the deficiency in the workforce, in addition to working following pandemic protocols like alternating shifts.

Thus companies will have to devise HR policies which balance pandemic protocols and available human resources with business opportunities.

Ramchandani points out that while disruptions with respect to non-availability/ disrupted supply of raw materials in the initial months of the pandemic have reduced to a certain extent, availability of trained labour is still a persisting issue.

She warns that with the increase in shift timing and reduction of staff, pharma companies would need to devise a new plan for meeting targets keeping in mind the workforce and the working hours without impacting the well-being of their employees.

Ramchandani, therefore, suggests that flexible working hours, change in leave/holiday structure and work from allowances are some of the measures that should be undertaken by the employers.

Future uncertain

So what does the future look like? As companies in all sectors try to work harder to compensate for the lost revenues of the Q1FY2021, how will employers help employees to better their productivity, while still maintaining pandemic protocols and keeping the virus at bay? Especially with Work From Home (WFH) firmly entrenched as part of the new normal?

Will companies be tough but retain staff as they now need to fight harder to make up for lost revenues of Q1FY2021?

While Chandwani feels that pharma companies would be possibly looking forward to retain staff, given the surge in demand for drugs and ongoing clinical trials, Ramchandani expects some amount of headcount reduction in most sectors, including pharma.

Nair agrees that measuring productivity has become difficult as interactions between pharma sales teams and doctors have shifted online. “However, owing to increased business flow, many pharma companies have retained the existing sales staff.”

He believes that pharma companies may amend their HR policies, specially regarding the training of its sales teams to ensure efficient WFH mechanisms and for SOPs to be followed in case of in-person meetings with doctors.

Nair reasons that as there is a surge in business as well as a growing need to assess the actual situation on the ground in terms of demand for medication, the performance of drugs and treatments, pharma companies may not resort to reducing headcount at this stage.

However, he caveats that by pointing out that as with most business, any future reduction in headcount would depend upon business operations, projections regarding future performance etc.

New skills for the new normal

With work from home (WFH) firmly entrenched as part of the new normal, at least for the time being, companies have devised new digital tools to track employee performance, especially of their sales teams.

With changing times the HR policies would need to be revised to take into consideration the productivity measures while WFH, says Ramchandani.

Ramchandani also points out that employers in all sectors would now expect employees to up-skill / re-skill and contribute to the revenues in a manner which works well in a WFH scenario as well. “Employees and employers would need to focus on building digital skills, productivity and collaboration skills in coming times.”

According to Chandwani, “With most interactions shifting to virtual medium, HR considerations have to be seen with a contemporary outlook. Major customer visits and deliberations are being carried out by virtual platforms making it difficult for HR personnel to keep track of the actual performance.”

Nevertheless, she feels that given the enormous stress the entire industry is under right now, there will not be too much laxity as companies have geared up to battle COVID-19 in the hopes that they will return to pre-COVID levels of business.

Thus while the pharma sector is at the frontlines of fighting the COVID-19 pandemic, each company will have to find the best balance between motivating their employees to better productivity, without impacting their health.

Returning to pre-COVID times would be pointless as the pandemic has shown us the weak links, be it overdependence on API imports or casual/migrant labour.

But playing a part in the new post-COVID world is definitely an opportunity that India’s pharma sector do not plan to miss. And since they cannot do it without healthy and motivated employees, HR practices in the pharma sector will have to evolve to meet this new paradigm.

After all, companies are only as resilient and successful as their employees. And HR practitioners will, therefore, have to work towards making this part of the company’s DNA in the post-pandemic era.

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