PDF HCA Benchmarking Sub-Committee Update

HCA Benchmarking Sub-Committee Update

Report on 2017 activities and a look to 2018

The HCA Benchmarking Workstream

Our objectives are:

To help foster optimum working practices in healthcare communications, both between and within agency, associate and in-house HCA members;

To provide a real value-added membership service via HCA benchmarking activities;

To leverage the results of the benchmarking surveys to raise awareness of the role of the HCA in promoting the highest standards in healthcare communications.

The main activity conducted by the benchmarking workstream is the annual HCA Agency Benchmarking Survey. The survey provides agencies with confidential quantitative data looking at key parameters in the areas of finance, human resources and business development - for use in reviewing internal operations and business planning.

From time to time, the group carries out other activities which may include surveying general trends in healthcare communications, or looking at specific topical issues in depth (for example during 2016 we looked at predictions for the impact of Brexit, inviting the views of all HCA member types), or running round-table discussions and producing relevant guidance documents. In the future, we hope to expand the group's role in monitoring the environment and drawing on external sources of information that may be useful to HCA members.

Overview of the 2016-17 Agency Benchmarking Process

The annual benchmarking survey among consultancies was conducted in May 2017. (Twenty-three organisations responded ? half the agency membership). This year's survey was significantly shorter than in previous years, focusing on true benchmarking of agency financials, HR data and business performance over the year to December 2016. Participants represented a range of different sized organisations, wholly/partially owned agencies and independents. A spectrum of PR and Medical Communications activities were conducted by these organisations, with work fairly evenly spread across UK-specific, European and Global remits. Most participating companies were healthcare specific, with most of their work coming directly from the pharmaceutical industry.

The benchmarking exercise is handled according to the strictest codes of confidentiality, carried out by a specially commissioned, independent market researcher in order to guarantee anonymity and confidentiality. Only aggregate data is shared and the names of participating companies are not published.

This survey is conducted in an online format ? we would like to thank M3 Global Research who conducted the programming and data collection on our behalf. The new secure platform (introduced in 2016) offers enhanced data security and greater automation of data collection and processing, thus improving efficiency. The survey is divided into sections, which are accessed via a simple menu page, making it easy for participants to navigate and fill in.

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More than one key person within a given company ? e.g. finance and HR ? can work on the survey in parallel, via the company's unique link.

Findings of the 2016-17 Agency Benchmarking Survey

Participating consultancies have been provided with a full report, including detailed information on financial parameters such as charge-out rates and human resources data such as salary bands. The reports are individually tailored and include the organisation's own data benchmarked against the averages for many of the key charts.

Here's a quick look at some of the highlights. If you would like to receive the detailed data, outlined below in pink, be sure to participate in 2018!

This year's survey presents a picture of squeezed profit margins ? as consultancies face continued pressure to discount fees

? Almost half the participating organisations reviewed their billing rates during 2016, but only a quarter actually made any increases to standard rates;

? Discounted fee for volume and fixed fee to deliver scope were the most common specific pricing arrangements;

? However, there has been a fall in discounting at the top job levels, suggesting an increase in recognition of the value of key services such as strategic counsel.

Survey participants have received: Data on turnover, fee income and profit margin, and how financial performance relates to client accounts and staff headcount; Actual average hourly billing rates by job level, and typical `blended rates' where these apply; Average discounted rates by job level; Detailed data on the types of pricing arrangements entered into; Added value services provided to clients.

In addition, HCA pharma members have been provided with the average hourly billing rates (We know that agencies do sometimes show these data to their clients during procurement negotiations and we feel it is more transparent to share it directly. It also means that we can offer more value to pharma members).

Average hourly billing rates by job level

MD-Europe MD-UK

Director/Partner Associate Director/CSD

Account Director Senior Medical Writer

Senior A/C Manager Account Manager Medical Writer

Senior A/C Executive Account Executive Trainee PA/Admin

Mean Own consultancy

?

Fig 1.

Illustration of the billing rates chart provided to participating agencies

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Staff retention and recruitment are key challenges, with companies responding by funding modest salary increases and providing an attractive range of staff benefits, including a continued trend towards flexible working.

? Staff turnover has increased slightly compared to the previous year, meaning that recruitment costs are increasing, and there's a reliance on freelancers to fill shortterm gaps;

? 96% of the agencies surveyed awarded salary increases to at least some staff, with 65% awarding rises at all or most staff levels;

? 83% gave bonuses to at least some staff; with 61% awarding them at all or most levels;

? The top benefits (in terms of percentage of organisations offering them) ? as illustrated in fig. 2 ? were a mixture of lifestyle benefits (working from home, flexible hours) and those with a more direct financial value (private medical insurance and additional pension provision);

? However, whilst companies are still managing to provide attractive packages to attract and retain staff, there's a risk that continued escalation of pressure on profit margins may start to have an impact on quality - we are already seeing training budgets suffer.

Fig 2. Percentage of organisations offering various benefits to their staff.

Survey participants have received: Detailed data on staffing and turnover, recruitment costs and use of freelancers; Actual average salaries by job level, including a range of support staff roles as well as account handlers; Further data on bonuses; Daily rates paid to freelancers at different levels/for different types of work; Further data on the provision of key benefits, including maternity, paternity and shared parental leave provision above statutory requirements; Training spend ? in terms of both money and time.

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There is an encouraging trend for new business to be awarded without a pitch ? especially from clients where there is an existing relationship

? HCA agencies enjoy a good level of pitch success - on average winning over half the pitches they take part in;

? Overall, almost half of all new accounts were won without a pitch. Whilst work from a totally new client is more likely to be awarded via a pitch, it's common for existing clients to award new business without pitch to an agency they trust;

? Only one in five of the organisations surveyed had taken part in any online auctions over the year.

Survey participants have received: Quantitative data on pitch success; Breakdown of new business wins by new/existing clients and by pitch/no pitch.

Looking ahead to 2018 - benchmarking plans

A new Chair for the group

We are delighted to announce that Sorcha Ferris, Executive Director at Synergy Vision Ltd has stepped up to take on the role of Sub-Committee Chair. As well as bringing vital communications expertise to bear on the group's direction and activities, Sorcha is ideally placed, being relatively new to the team, to bring fresh ideas and continuity to the process. We'll also be fully in touch with the wider objectives and activities of the HCA through Sorcha's involvement with the Executive Committee, so that we can ensure everyone is working towards the same goal.

Aline Rogers will continue in a consultancy role, driving the Agency Survey process and providing the important independent analysis of the results.

We also welcome Sarah O'Donoghue, Syneos HealthTM, bringing HR expertise in place of Polly Purser, who we thank for her contribution as she steps down to focus on new responsibilities.

Next year's survey

The 2017-18 survey (looking at data for the year to Dec 2017) will be distributed in April (in the form of a unique link to allow you to access and complete the survey online), with a submission deadline of early May.

Here's what some previous participants have said about the benefits of taking part in the Benchmarking process:

"Fascinating survey ? great to take part"

"Another interesting and helpful report" "

"Our procurement discussions with clients are better informed"

"It has helped us get pay reviews approved (by the parent company)"

"Our financial acuity has improved. A more discerning focus on pitch opportunities"

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We look forward to your participation!

We will also be conducting other, ad hoc activities, to elicit members' views on key topics, depending on needs and the focus of other HCA initiatives and priorities.

If you have any specific queries at this stage, please contact Aline Rogers, independent market research consultant to the Sub-Committee - aline.rogers@ / 07876 543782.

HCA Benchmarking Sub-Committee

Antonia Betts OgilvyHealthPR

Julia Cook StepBack Healthcare

Claire Eldridge Aurora Healthcare Communications ? from 2018

Sorcha Ferris Synergy Vision (Chair)

Sian Hurst Aurora Healthcare Communications ? to end 2017

Polly Purser Syneos HealthTM (Human Resources) ? to end 2017

Sarah O'Donoghue Syneos HealthTM (Human Resources) ? from 2018

Aline Rogers Independent market research consultant

Mark Swainson Virgo HEALTH (Finance)

Please feel free to contact any of the team with general comments or suggestions at any time (see website hca- for contact details).

Note: The consultancy survey is completed by one key individual (typically the agency MD), with input from finance and/or human resources as required. These individuals are in a good position to give an overview of what is happening within their own organisations, as well as the prevailing attitudes towards communications, though the survey does also reflect the personal opinions of those individuals who responded. It is also important to note that the results represent the circumstances and points of view of a subset of the HCA membership ? which, whilst providing a good representation of members' views, cannot speak for the whole healthcare communications industry. The HCA Benchmarking survey may tend to offer a more positive reflection of the industry than its whole, as participants are likely to be the more forward thinking, successful organisations, but it should still give a good indication of trends.

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