2019 Innovative Initiative Winner Profile: PharmaLogics Recruiting
In June, we held our inaugural Innovators' Breakfast to celebrate 100% Talent Compact signers advancing women in the workplace through innovative initiatives and effective practices. Following a competitive application process, we reviewed dozens of submissions by diverse employers in size and in industry.
PharmaLogics’ initiative demonstrated the cost of promoting pay transparency was low compared to the broad impact that it continues to have. Moreover, there was a deep commitment demonstrated by the management team to make working women’s - including working mothers'- lives easier. BWWC Marketing & Events Manager, Joana Ortiz, sat down with Megan Driscoll, CEO & Founder, PharmaLogics to learn more.
Initiative: Wage Transparency
Category: Closing the Gender-Based Pay Gap in Total Compensation for Women
Industry: Professional / Scientific / Technology Services
Interviewed: Megan Driscoll, CEO & Founder, PharmaLogics
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JO: Tell us about your origin story. Was wage transparency part of your business strategy?
MD: When I first started PharmaLogics in 2003, I wanted to be the #1 bio pharmaceutical recruitment firm in the country. I saw that we had the potential to build a large and impactful organization and become a big name that you could trust in our space. In the first few years, we hired 12-13 people and really started to make headway on our goal, and then the recession hit. It was 2008 and although it was a good year financially, we knew 2009 was going to be rough. I was also preparing to have my second child and as a working mom, I started thinking “what do I want my work life to be like?” I still had this idea that we could become a great, big company, but I become tired of some of the aspects of the recruitment industry. The fee structure wasn’t based on time spent recruiting and recruiters and HR had kind of a combative relationship. Due to the high fees, the people that were attracted to full desk recruiting, our employees, were money hungry and aggressive. I just wasn’t sure that was the kind of work I really wanted to continue doing.
So, spent my maternity leave in the summer of 2008 developing a new program that would solve for the problems that were keeping me from getting excited about my work. Based on 10 years of metrics I knew we could make placements for less money if we stopped charging the industry standard 25% fees, and replaced it with a paid by the hour model. I also knew that HR would love saving money, so we could sell our new model to them, and build relationships with HR instead of avoiding working with them. We decided to completely disrupt the premise of our entire business and in doing so, we went from a 1.5 million dollar revenue to 15million in revenue last year.
Megan Driscoll accepting Innovative Initiatives Award (June 2019)
The first time it had occurred to me that we could represent a social movement at all was the first year we made INC 5000 fastest growing private companies list 6 years ago. I went to their corresponding fastest growing conference which ends in an awards ceremony for those companies on the list. At one point in the evening, they asked all the female CEO’s to stand up. They wanted to congratulate us for our representation growing 1% over the previous year.
People were clapping because the list went from 13% female ownership to 14% female ownership. I was like, “You gotta be kidding me?” I sat back down and spent the next 20 minutes doing math on my napkin. What I deduced was that maybe by 2550, women would be 50% of the list if 1% continued as the growth rate. That was ridiculous. I was upset.
“It was then that it dawned on me that perhaps I could use my female CEOship platform in a different way and begin to not only point out the lack of equality, but the programs and companies and women who are doing something about it.”
Inequity, in any situation is not random, it’s systemic, and it needs to change. It was from that point that I would use PharmaLogics as a platform to talk about women doing awesome things, how to be inclusive, how to be diverse, and why women in leadership, in the corner office, in the boardroom, matter. We began a social media campaign, #DoitForYourDaughters as our platform for which to speak about everything. Over time, these conversations evolved into our talking more broadly about equality. We started challenging others on fairness and pay parity which led to our massive interest in wage transparency. It’s not just about women being paid fairly, it’s about women and minorities being paid fairly.
JO: In your practice, how do you combat the traditional mindset of how you enter a workforce? Do you heavily you rely on market value?
MD: What we value most is what is the job, and to do that job, what should we pay. From there, if you are qualified for the job, then you are paid that wage-regardless. At PharmaLogics, we have made it very clear what you will be paid at each level within the organization and we share that information with all new employees, and every time someone is promoted. Everyone knows where they are at, that the person next to them is earning the same amount for the same job, and what they will be paid as they move up the ladder. Wage Transparency doesn’t take info account what you look like, the color of your skin is, what religion you practice, or if you’re a man or female. Your base and bonus potential is what it is. The nice thing about this is not only transparency, but also the fact that everyone knows what they’re looking forward to as they grow within the organization. We’ve just ripped the curtain back on the whole process.
PharmaLogics team with Mayor Walsh, at a special gathering celebrating the 2019 Innovative Initiative winners. (August 2019)
One of the things that owners don’t usually like, but is happening, is people talking to others about how much they’re earning. And they’re often inaccurate. As a result, there is misinformation of everyone’s earnings because of it. We’ve chosen instead to make it very clear. There are so many companies that have longstanding pay inequities and those are really hard to solve for. Some of those companies would have to spend a lot of money to go back and create pay parity. But if you build your company with equity and fairness in mind from the beginning, you will never get yourself in that position. Inequity might not have been a big deal in the last ten years, but it will be a much bigger deal in the next twenty. If you don’t get on board to make the change now, it’s going to cost you a lot of money later.
JO: How do you embrace the varying skills and experience employees bring and how do you develop their professional skills within the company?
MD: There are two levels of entry-level pay. There is one where you’ve just graduated college with no industry experience. If you are someone that comes with a couple years of industrial experience, you enter with slightly higher pay. If you’re promoted quickly, let’s say in 6 months, where there are other people that have already been there 2 years, you’re still getting paid the same base level that others are making because you’re being paid based on the job requirements. Hire the person for the position.
If you’re changing the job description for someone, you’re changing the job itself. If someone doesn’t meet the requirements, then don’t hire them. If they do, then hire them and pay them what their peers are earning if your asking them to do the same job.
JO: How have you seen this initiative, this policy, impact the internal culture?
MD: Innovation is a hallmark of what we do and a core value. We don’t just do things that others are doing ‘just because.’ We want to think out of the box. Since implementing this policy, there has been no backlash. I would say some of our progressive policies haven’t always been winners, but this one has proven to be a culture building success story. The transparency has allowed for a great overall adherence to who we are as a company- innovative, collaborative, adaptive, enthusiastic and resilient. We’re not just living it, we’re holding everyone accountable.
Since they’re already aware of the pay, they focus on what position they aspire to hold and what skills they need to develop to reach that. It’s getting people to think about how they can perform better to get to another level which pays better.
JO: I imagine this effort didn’t happen overnight. What was the process like of implementing this into your practices? What advice would you give other businesses considering the same approach?
MD: We have had this policy in place for about 3 years now, but our moving to an overall transparent business more broadly has been underway since the recession.
It was not hard to do and it did not take us a long time to implement it. It took one HR team member’s time to create the pay range map, verify the compensation information, and then roll the results out to staff. It’s been routinized into our onboarding process now and updated as necessary. There is no better way you can send a message to your employees about their value to your organization than with paying people equally.
JO: It’s removing the room for bias.
MD: 100%. There can’t be bias when you have already stated and clearly set parameters.
JO: What misconceptions have you squashed in your efforts to be a transparent business?
MD: People are naive to think that, in general, women and minorities are paid the same as men for the same job, and I am surprised at how many people don’t want to see the inequity, or they mask it with a bunch of what they consider “good reasons.” Women and minorities are not, at any level, paid the same. We have to accept this and be proactive. It’s 2019 and my son has a 75% greater chance at being a CEO than my daughter because he’s a boy. There is something really wrong with that. I think people think we’re very progressive in Massachusetts, but the truth is we’re just as being behind.
Source: Boston Women's Workforce Council 2017 Report
Based on BWWC data, we’re not doing any better than the national average. As business leaders, it’s our duty to pave the way for women and minorities in leadership. It’s not okay for me to just be happy with what I accomplished for myself. I need to work to ensure future young girls,women, and minorities face a different reality than the one I had.
JO: Since implementing this initiative, do you believe it has changed your bottom line?
MD: It’s hard to measure that because this implementation occurred when we were in the process of taking on a private equity partner. Everything is a little different than it was in 2015 or 2016. However, do I think we have a positive culture? Are we an employer of choice? Do we hire equally and quickly? Are we able to hire the creme of the creme of new grads or seasoned people? One hundred percent. We make more money each year. We continue to grow. If you want your company to be relevant in 2030, you have to adapt to what is happening. Women and minorities are demanding change, you can’t ignore it.
JO: Where do you hope to be in 2030?
MD: PharmaLogics will be breaking through established norms on some other front, being led by the very progressive Megan Lanham who took over as CEO of PharmaLogics in July. Maybe by that time having been bought by a larger staffing firm where PharmaLogics can impose their social policies upon the larger group and therefore making an even greater difference! As for me, I hope to have helped 1000’s of people transition into roles aligned with their purpose.
About the Initiative:
Pharmalogics believes the path to pay parity will be accelerated through pay transparency. At their company, the pay of each level of position is known by all employees so that all employees know there is no wage gap that exists within the company walls. In addition to launching this movement for wage transparency, PharmaLogics CEO and Founder, Megan Driscoll, has founded the social media platform, #DoItForYourDaughters and partnered with local organizations like Business for a Fair Minimum Wage. To learn more about PharmaLogics and their initiative, please visit: wagetransperency.com
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