Joining private companies for Biotech-Pharma R&D sector in India.
B. B. Goel
Sunday, 28 June 2009 17:18 UTC
It seems to be a problem for many PhD and postdocs to decide whether to join public research institutes or private ones. Once they decide and get suitable opportunity to join a private research institute the first problem they face is to determine how much they worth. In whole life they did research and never did self-evaluation from monetary point o view. One thing we must make clear that there is absolutely no rational and honest criteria for anything in a company. Two candidates having same academic achievements and background can have vastly different salary and parks. It mainly boils down to candidate’s own negotiation skill and showing symptoms of desperation to get a job (as perceived by the prospective employer). The first question they face during a HR interview (once they are selected as a potential candidate by scientific/research body of that institute) how much they except as salary. This is a very tricky question and very tough to answer, particularly for those who is looking a job for his/her first employment in a private organization. The general trend is to say, for example, “about 7 lakhs per annum”. By the time company asks this question, they have fairly good idea about the upper limit they can offer. If the asking salary, by the candidate is below the company limit (mostly it is) they accept after some usual (cosmetic) rhetoric (which also reduces the salary for the candidate) and pressure to join as early as possible as if the Company will stop functioning if the candidate does not join soon (which is mostly false but nonetheless very effective to put pressure on the candidate). Extra benefits depend on the difference between asking salary and company’s expected upper limit. Now the next and most widely used trap, the “cost-to-company” (CTC) concept. In academics we have no such concept and so when a company says that your CTC will be X lakhhs then we tend to think that is my net salary (without tax of course). So when you join and get your first salary, you get surprised. Before actual joining, it’s almost impossible to make the HR people admit, in writing, the actuall take-home salary (considering the all legitimate govt taxes and other minimum deductions, as per company law). After the first salary, the candidate start exploring why the actual take-home salary is so low. Now they start understanding the greatness of terms like “productivity linked incentive (PLI)”, “deduction under chapter VIA”, “choice pay” etc. It’ll be less stressful in future if the candidate accepts that PLI will never be given to his/her in some pretext or other. That amount varies depending on company, your negotiated CTC and many other factors. In general it varies from 7-15% of CTC. Actual calculation for PLI is deliberately kept very vague and complicated and with too many variables (which is beyond your own performance and control). It will be better to accept that you will never get that part of the salary. Now “choice pay” part, another tricky business. Before joining it seems that we will get all that part of your proposed CTC. But soon after joining you realize that it’s not the case. Financial benefits and other parks are very well defined in public institutes and we can get a fairly good idea about our actual take-home salary there.
Companies mainly think that once you join the company it will be very tough for you to change or to go back to US/Europe or other countries. They highly exploit that situation. Majority HR will insist that you join first and everything will be OK then. For an average postdoc in US, it’s very hard to waste about $ 10-15 K during relocation and initial settlement in any metro city in India. Financially many of them cannot afford to come back, even if they do not like to continue that job (although some do just that and that trend is increasing as well). Some out of compulsion and rest out of fear, many publicly praise their new job, exaggerate their salaries among his/her friends. Sometimes it’s very tough to get actual salary scale by talking to acquaintances and friends. Private employers just love that aspect. They encourage it (even sometimes in writing) so that candidates do not discuss their salaries and parks among themselves.
Now let’s come to intellectual property rights. Many of us wrongly think that whatever we accomplish in a private company belongs to the company. Probably it’s not right. It’s only the business and financial “right” that belongs to company but the company has the legal obligation to give the candidate due “academic” credit (e.g while filing patents). They almost force the candidate to sign a very lengthy document which most of the candidates will not read but sign, to avoid such complications and deprive the candidate his/her legal rights.
It seems that majority of the candidates working in Indian private companies in R&D will not get the opportunity to come back to basic research and academics after working in such private R&D sector in India. Firstly they will not be much productive so far research is concerned, in terms of publications and novel, usable patents. In other words they have to stick to same type of work during rest of his/her life. Scientifically it’s very boring and frustrating, if they really like to do research. In most of the cases the family life of the candidates will be ruined, particularly if they prefer to join a company where Saturday is a working day. Just like many other Indian companies (both in IT and other sectors), you are expected to stay till late into the night if your boss stays, even though you may not have any work, but to keep up with others in pleasing the higher management. This is very important for the company to measure your “productivity”, as they perceive. Once you climb the hierarchy you feel more pressure for such acts, more meetings after 7pm and during weekends/holidays. It is more problematic for women, as we can understand.
But if played properly, there is a huge scope to earn money, a lot of that, particularly for few who are street-smart and have a flare of public speaking and some managerial skill.
Let’s hear some other thoughts and opinions.
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Anonymous
Thanks for the interesting post. I appreciate your effort to bring transparency in the system. I hope it will help a lot of people thinking to join such so-called research institutes.
The salary (CTC) offered by many, if not all, private institutes and private universities may seem a lot in the beginning but it may be not that huge when you actually get it after joining, as you rightly indicated. In my opinion the net salary difference should be about 2.5 times as compared to Govt institutes to consider joining such private organizations.
On top of all what Mr/Dr Goel have mentioned, many times the “scientists” are coerced to do many unethical and sometimes downright criminal activities for the company, which is beyond the scope of this open forum discussion.Many such organizations do not even subscribe any research journal yet call themselves “research institute”. Most of the time the best employee awards goes to administrative and management staff in such “research” organizations. It seems that scientists and other research staff are working for those people, not the other way round.
One thing I realized as an employee in one such private company, the only thing you can achieve working in such companies is money, only money (that too for few people). But you have to pay a huge price for that. You have to sacrifice your research ambitions, your family life and above all your own self-respect (in most of the cases) to prosper in such organizations.
It will be my take-home message better to very cautious before joining any private research/academic organization in India. In becomes more important if the company is headed by a typical Lala-type businessman who has no (broad) subject matter specialization in the area they are doing business with. -
Anonymous
Sorry, there is few typing mistake:
It will be my take-home message: better BE very cautious before joining any private research/academic organization in India. IT becomes more important if the company is headed by a typical Lala-type businessman who has no (broad) subject matter specialization in the area they are doing business with. -
From many personal and second-hand experiences, I think India is still not suitable to transform to a knowledge-based society in near future, as many of our politicians like to think. Indian IT sector raised that hope but that hope is disappearing fast. Most of the so-called knowledge based (KB) industries imitate and implement their age old habits of running semi-skilled labor intensive industries. They are yet to grasp that fact that main resource they have in a KB industry is its people. Employees are not just numbers, but each and every one has a specific quality, personality and ability. Industry must retain the best brains to compete in this fiercely competitive sector. Moreover, the quality of competition is also very different from labor intensive industries. Many of such Indian KB industries think they can afford to do that as they are mainly doing business on BPO, routine jobs (it includes IT sector, generic drug “development”, clinical trials etc, which does not need much “research” per se). Our famous management institutes do not prepare future managers on how to deal a person who already have got good education, some degree of self respect and most importantly, who can think for themselves. There are very few captains of Indian industries who understand the complexity of the subject they are dealing with. For majority of them it’s just another investment and they want profit asap (other than tax and some other govt incentives), without really understanding the assets and liabilities of that specific sector from technical/scientific point of view. This is not the case for many foreign MNCs. The founder/CEOs of many famous companies working in R&D sector in US-EU-Japan etc are subject matter specialists and/or know the ins & outs of the business from very bottom. They themselves can evaluate a future promising technology; can understand the potential asset and also the risks from science-technology point of view. It’s almost impossible to talk nonsense to them so far subject matter is concerned. It’s almost impossible for a general MBA to run a Biotech company, even if he gets his degree from Stanford or Harvard.
How many form Indian industries dealing in biofuel (there are many, I know) can write a well-informed article in a scientific journal like Science, as a US venture capitalist Vinod Khosla did? I bet, not even one. Almost all of India’s biofuel research is a great hype, not much scientific substance, not many scientific debates. Even Indian govt could not make a coherent national policy for this promising technology.It’s also an irony that typical management staffs deliberately do not allow scientists to enter in the management of the company, even when the concerned employee proves decent managerial, interpersonal and technical skills. This is probably true for western companies as well, unless the company is founded/run by well qualified scientist(s).
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Thanks for the responses.
I think I should mention all potential candidates to become very cautious regarding the term “upto”. This term is sometimes used in CTC calculation and is a widely used trap for dishonest companies to cheat the prospective employees. Suppose your CTC says that you are entitled to get a “car maintenance allowance” upto 1,75,000/- per annum. Your CTC will be calculated on basis of 1,75,000/-. But after joining the company you may realize that your actual “car maintenance allowance” is only 50,000/- per annum. It’s useless to argue with HR guys then. They have all the reasons to justify how 50,000/- is the correct figure. If you still insist, the discussion will ultimately end with “this is company policy”. Stop. Better to clarify such “upto” points before you join.
I also heard from some of my friends that some Indian biotech-Pharma companies (e.g Reliance) used to give “gifts” to its employees during festive seasons (e.g Diwali) and then deduct the money from their salaries at the end of the month. Practically it’s a tactics to evade tax. In reality it’s the Indian govt (general tax payer) who is paying for your company’s Diwali “gift” to itself and its employees. -
All the “choice pay” and other such terminologies are mainly used to evade tax. Why Indian Govt can not tax on gross salary or CTC (as the case in many European and American companies)? Indian tax rate is surely one of the highest in the world, but our colleagues in govt institutes and universities do pay such high tax. Salary disparity is a major reason why some bright people do not like to go back to India and join Govt institutes/universities. If Govt proposes tax on CTC or gross salary in private companies then the tendency of tax evasion and cheating its own employee by private companies, using some terminology as shield, should reduce, as I think.
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I noticed that throughout your article the focus is on the “foreign-returned researcher”. Will this article apply to “India-bred researchers” too? When you talk of a 7 lakh per annum salary, many people might be led to believe that scientists do get that sort of salary in private companies in India. But the situation is a lot worse than that. When you are fresh from reasearch without prior experience in a private comapany, no company will give a 7 lakhs per annum salary, especially if you have never been “abroad” before!
Jayanta Chatterjee hits the nail on its head when he says India is not yet ready for private-sector research. Cmpanies are run by management graduates whose prime concern is to make money the quickest way. They do not understand research work where initial investment will be high. The skills of the researcher will always be ranked below the skills of the management unit, although the two cannot be compared in any way. Jayanta’s analogy to the BPO/IT sector is very good. A researcher will always be looked upon as a “factory worker” (also called the “production unit”) by the management.
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Thanks Shailenddra for your feedback. Yes, most of my comments and analysis is equally applicable to “India-bred researchers” too. One thing I realized that higher education in a foreign/developed country cannot change the core value of a person. I was emphasizing “foreign return” as many in India think that foreign degree is synonymous to knowledge, character and honesty, which is clearly not true. This image was shrewdly cultivated over the ages and strengthens by our colonial past. Many foreign degree holders manage to climb hierarchy just for their degrees; not for knowledge, honesty or ability. This trend needs to be changed.
Now coming to your 7 lakh salary thing. Yes, you are right. But if you come to US and talk to Indian postdoc community, you may get a feeling that 10 lakhs annual salary is very less! They all talk salaries of 15 lakhs (as a first job after 5-10 years of postdoc). So far I know, more than 10 lakhs salary (CTC) in private company in India is very rare in research jobs, at least for first appointment.
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The main problem for a general businessman/MBA to run a knowledge based industry is selection of technical and research manpower. In such cases there is a very high chance that the top level of technical/research positions are selected on a wrong basis; on the basis of what rosy picture those “scientists” paint in their beautiful PowerPoint slides, impressive inter-personal skills. People with ignorance of scientific knowledge easily get impressed by nice packaging, but fail to understand the real product quality. Once the high positions are occupied by “wrong” people, the inefficiency, and tendency to shift responsibilities in case something goes wrong and wrongly claiming credit for someone else’s productive work become the rule. This type of work culture is very common in Indian Biotech industry. It takes a huge toll but that takes relatively long time to feel its impact. It’s almost impossible to stand up against it being in junior position. And in a private company where almost everything is compartmentalized and fragmented (stating from “research” to administration to business operations), it becomes next to impossible for (non-technical) top management to fix it, even if they want. It also becomes easier for top level “research” staff to convince higher level people to continue with the routine jobs and portray that as “great research”. Highest level people who take business decisions are also happy with short term profit, but fail to perceive the long term consequences. This ignorance ruined Indian antibiotic manufacturing industry during early 1990s. Yet they did not learn from the past mistakes, it seems.
I hope India would not become the dumping ground of obsolete products/technology, risky “research” (from environmental and public health point of view) and becoming a colony of foreign industries to shift mainly their routine jobs in India. -
My question is: Can good research happen in private firms in India today with the current setup and scheme of things? Most people say they are there only for money and if the renumeration was better in the government research institutes and centers of higher learning, they would have never moved to a private firm where one is forced to learn/develop management skills (which are not always positive skills) to move up the company hierarchy. Unfortunately, management skills and scientific skills do not always match and the person with sound scientific skills but with poorer management skills falls behind those with the opposite set of skills. This is detrimental to research and to the firm in the long term because people with poorer a skill set start taking major research decisions after some time.
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This is an interesting question. In current Indian situation, the answer is a big ‘NO’. Almost all Indian private R&D establishments do not have the basic requirements to do real research. They do not have the ambition to become a leader in innovation and lead the global market with new and better products and/or services. Such ambition comes from confidence which in turn arises from knowledge (not degrees). They do not have any of those basic requirements to become a serious global player in R&D. They can only become a cheap manufacturer of generic drugs or other well tested biotech products (abroad).
Many Indian pharma companies have good number of people to track which patented drug is going out of patent control, dig out the patent application of such drugs (from US patent office web site or other such sites) and find out how they can make it cheaply. Lately foreign pharma industry is also taking steps to extend the “life” of patented drug and colluding with generic drug producers. Some countries are worried with such “malpractice”, which is against the norm of free market, as they suggest (a BBC report). Previously Indian companies used to do it more openly, encouraged by “inefficient” Indian patent law and below satisfactory implementation of existing laws regarding intellectual property rights. This may be good from employment generation and profit point of view but it can not be termed as “research” in any way and more importantly, such business practices can never be sustained in the long term. Countries having weaker law enforcement, cheaper raw material and cheaper manpower is always a threat. And there is no shortage of such Asian, African, south American and east European countries!This question becomes very interesting if you expand your horizon and ask the same question in global level. According to many reports, basic discoveries in biology almost always come from universities and institutes, mostly supported by public funding. It’s the survey type work; products developed through screening techniques are done best by R&D centers of big corporate houses. Big pharma companies always site R&D cost as a major reason for high price of existing drugs. But facts shown by many NGOs and govt scientific staff indicate that major research work for any novel drug was established, in lab scale, by public funded work at a university/institute. The high cost arises from clinical trials, scaling up for industrial production and the main huge cost arises from marketing the drug (bribing physicians, Govt/hospital staff etc, besides massive advertisement campaign). Even the doctors/hospitals in countries like USA are not safe from the huge influence of big pharma companies. The result is in front of all of us: spiraling out health cost with almost no improvement in treatment and quality of life/health in this country (BBC report).
One more thing: we cannot always trust data given to us by big pharma companies. Some recent law suits against some big pharma companies have proved that they do lie about their research findings, suppress data from clinical trials and so on. It also came to light that, at least few academic researchers are influenced by such companies to publish papers, even in high impact journals, having their names at (corresponding) authors to show/advertise how great the drug/technology is, developed by the private company. Such publications heavily rely on data given by concerned industry and many times can not be independently verified.
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