Excelling in – and then Redefining – Recruiting
After graduating from Davidson College, all Megan wanted was to move to Boston and live with her friends. When she was offered a telephone sales job she immediately took it, and quickly found herself right at home. Megan was promoted within 6 months, and enjoyed the fast-paced culture. As she felt her growth potential begin to plateau, she transitioned to working for a bio-pharmaceutical recruiting firm.
This new role seemed to be a perfect fit, as she had a knack for sales and had also been considering medical school. Megan became the #1 recruiter in the office within the first year, and top 10 in a company of over 400 people within four years. She remembers feeling strange about all of the money she was making. At the age of 25, her income had outstripped that of her parents, and she recalls pondering what it all meant.
As a developmental project, Megan requested permission to personally hire and train an employee. When that first hire made over $100,000 their first year, and Megan was more excited about her trainee’s placements than her own, her destiny for management became clear. The owners, however, had different ideas, and rebuffed notions of starting a team or Megan becoming a partner. Around this time, a design build firm client of Megan’s turned the tables and recruited her. The objective? Starting a sister recruiting company to help the design firm’s clients staff their new facilities. PharmaLogics was born.
The Rise of the Specialist
Almost every recruiting process outsourcing (RPO) firm in the United States is diversified among many industries. PharmaLogics, in contrast, is the only “pure play RPO firm in life sciences,” Megan shared. With a mission of “becoming the #1 biopharma recruiting company in the world for companies that are improving and saving lives,” PharmaLogics has certainly gotten off to a strong start.
Megan started PharmaLogics in 2004, and has grown the business to 70+ employees, a rarity in a fragmented industry. The company has weathered both bull and bear markets, and Megan described the life science industry as being “the last to get hit by a recession and the first to recover.” Periods of upheaval do provide an opportunity for reflection, however. During the 2008 crash, Megan found herself questioning the industry standard 25% (of the recruited individual’s salary) placement fee. Why 25%? Why contingency?
Since PharmaLogics tracks every phone call, Megan had a mountain of data at her disposal. The metrics showed that on average, an effective placement took 80-200 hours. With an average contingency fee of $36,000, clients ended up paying $500/hour for a placement. Megan went to a few of PharmaLogic’s largest clients and pitched them on an hourly model, with a guarantee that the cost would never exceed the 25% benchmark.
Clients loved it, and the new pricing opened doors for much larger scale recruiting projects. This approach has required building a radically different business model, relying more on established processes and organizational knowledge than on hiring ‘lone wolf’ superstar salespeople. Despite managing a large volume of placements, PharmaLogics boasts a 95% client retention.
Priorities Moving Forward
“Technology is huge for us,” Megan explained. In 2015 alone, the company launched a new accounting system, a new time management system for billing, a new applicant tracking system, and implemented Salesforce.
In addition to continuing to invest in technology, the company is focused on building a culture that makes PharmaLogics an employer of choice. Perks include yoga on Wednesdays, workout classes in their building’s in house fitness facility, and free fruits, vegetables and coconut water available for employees to snack on during the day. Knowing their workforce values work/life balance, the firm has instituted programs where employees who hit their monthly goals can earn Fridays off, as well as the ability to earn the week between Christmas and New Years as bonus vacation time. In recognition of these programs, in 2016 PharmaLogics has been named to both the Boston Business Journal’s Best Workplace list and as a member of the Boston Globe’s Best Places to Work list.
Having also been on the Inc 5000 fastest growing private companies list for the last 3 years, Megan has learned a number of lessons from other Inc. 5000 CEOs at the annual conference. One recently implemented change was shifting more of the entry level staff’s pay structure to salaried, so that they could have a greater sense of financial security and predictability. This change, along with others, has contributed to doubling revenue, customers and employee retention over the past year.
Megan recalled the weekly bullpen meetings, held every Monday, which she uses as an opportunity to keep the company on the same page and motivated. Looking out at the 70 people the company now employs, seeing them growing and thriving in their work, and having built the company without sacrificing her own family values and time with her husband and kids – the scene makes feelings of thankfulness and joy almost inescapable.