Ranjit Bains

While rebadging is an option that has been around for years, the COVID-19 pandemic spurred more widespread use. As pharmaceutical and biotech companies grappled with the pandemic and needed options to reduce internal headcount while maintaining expertise and business continuity, many turned to the flexibility and value that makes rebadging appealing in both the short and long term.

In a nutshell, rebadging is the process by which a client transfers employees and/or contractors off its payroll and onto the payroll of a functional service partnership (FSP) vendor. The client then re-engages those same staff members, who are now employed by the FSP vendor. While rebadging is disruptive, when done well it offers benefits to all parties involved.

Clients maintain speed and stability as tried-and-true staff members continue in the same roles as before, without negatively impacting ongoing programs. Rebadging also reduces fixed or direct costs for clients, as well as the legal risks associated with using contractors in full-time, long-term engagements.

Employees are assured secure employment, re-assigned back to their original employer (as a vendor contractor) or via new positions within the FSP vendor.

Vendors find rebadging not only an important source of revenue, but also gain broader access to top-level talent, critical for any successful service provider.

In this article, we’ll take a closer look at the benefits and challenges of rebadging for companies that perform clinical trials and other pharmaceutical/biotech services.

Rebadging offers numerous benefits and the risks are manageable, so it’s an effective way for companies to address workforce capacity and labor uncertainty while retaining access to the skilled, experienced personnel on whom they rely. First and foremost, the client maintains continuity across programs. In some cases, rebadging can help to avoid costly severance packages and payouts, as well as the bad press that can be generated for layoffs. It also shows good will to departing employees by helping make the best of an unfortunate scenario.

While FSP models with or without rebadging are ultimately about capacity management, the best vendors deliver wide-ranging value to help the client:

retain access to a dedicated team of full-time equivalent (FTE) staff for a broad range of services (data management, medical writing, program leadership, clinical supplies, regulatory, clinical monitoring, statistics, medical, etc.).

increase flexibility, including on-demand access to time and materials (T&M) or unit-based models that can deliver services with work volume that does not require
dedicated FTEs.

access additional vendor expert staff from across the globe and shift or centralize services to increase efficiency, reduce timelines and save costs.

accelerate and optimize key HR processes, including hiring, onboarding and training.

Working with a vendor may offer reduced risk

Legislative restrictions around co-employment and contingent workers can increase legal and operational risks when “temporary” staff are dedicated to a client in a full-time, long-term capacity. Examples include:

assuming risk when there are employment law violations–companies can be liable for a staff member’s actions when they are
a co-employer.

inadvertently violating wage and hour laws, which are complex and vary by country
or region.

It is important to ensure that co-employment risks are successfully mitigated through a series of contractual and operational designs, and clear delineation between vendor and client responsibilities and oversight for staff.

Ideally, contracts define the specific services and obligations of the vendor and client in respect to the staff. For example, as the legal employer of the staff, the vendor should deploy a management layer with the responsibility of providing day-to-day direction to the staff. These managers should also cover the usual line management responsibilities such as career development, performance management, while the overall functional oversight remains with the client.

For employees affected by a rebadge, the primary benefit is obvious: their continued employment, surrounded by familiar teammates, systems and project work. Rebadging, when done well, should not result in undue financial burden for the employees. For example, in the EU and elsewhere, ARD-type regulations are in place to help ensure employers don’t take advantage of their employees by offshoring their work or forcing them to rebadge with lower salaries and benefits. The FSP vendor must be expert at navigating these regulations to meet the needs of all parties to ensure each employee is “made whole.”

Moreover, joining a successful FSP vendor gives the employees a range of value beyond job security. Over time it allows for easier movement from one client to another via assignment within the vendor, rather than having to quit one client company and take a chance on another.

During any organizational transition, is important to keep employees engaged to keep turnover in check, and rebadging can help. Like many other fields, average voluntary turnover rates in the global CRO industry are increasing–from 15.5% in 2019 to 16.3% in 2020 alone.

The global market for outsourced clinical development services to CROs, including FSP providers, is estimated at approximately US $44.3 billion, and projected to grow to US $57.2 billion by 2024 (CAGR: 6.5%).

 While it is uncertain how much of this comes from rebadged employees, this large market does indicate that the overall appetite for outsourcing is strong.

For vendors, one of the major benefits of the rebadging model is that it gives access to proven professionals who are among the clients’ most valued employees. This in turn helps the vendor understand the client’s needs and perspective to ultimately serve them better. Transferring qualified employees is also much easier and more economical than the typical recruitment and new hire process.

Rebadging is a great way to identify and onboard employees who are highly motivated, self-sufficient, tech-savvy, adaptable and able to learn quickly, make decisions and take action. For FSPs servicing the pharmaceutical and biotech industry, among the functions and key roles that are in high demand are project manager, oversight director, clinical research associate, clinical trial coordinator, medical writer, global clinical supplies manager, biostatistician, medical writer, data manager, safety manager and regulatory expert. For these and many other roles, rebadging is an important means for vendors to identify and retain the top talent that enables them to keep pace with the rigors of clinical development, just as it is an important way for that top talent to remain meaningfully engaged (and steadily employed).

Rebadging can be an attractive win-win proposition, but the implementation is no simple matter. Companies need to have the following capabilities:

–The knowledge to handle all aspects of each staffing transfer properly and compliantly, including ARD and non-ARD staffing models and global best practices.

–Planning for rebadging, change management and business continuity, which is especially vital when transferring staff. The staff transfer process needs to be handled thoughtfully, with a transition manager coordinating interactions with HR, legal, IT, contracting and the affected employees.

–Look for an FSP vendor that is growing and has plentiful business aside from your own work, including through the COVID-19 pandemic or other disruptions. This helps assure they can readily absorb your employees and promote a positive outcome for everyone involved, regardless of the ebbs and flows in work volume.

–It’s critical to have a partner to calibrate your capacity and ramp up quickly across any function or service. Service-level agreements are an important step to ensuring FSPs interview, vet and make offers to candidates within a set timeframe. Transfer varies widely, from as little as 10 business days in the United States to three to six months in countries with ARD legislation and works councils or unions.

While there are numerous reasons why pharmaceutical and biotech companies would want to shift workforce from the traditional headcount to a contract or on-demand model with FSP vendors, clients need to recognize the potential for significant hurdles, including regulatory and legal risks. By navigating the regulatory waters and focusing on maintaining both employee and employer satisfaction, an FSP vendor can help companies engage a steady, agile, full-time workforce while avoiding burgeoning payrolls, direct costs and debt–all while maintaining continuous, high-quality service and speed.

Rebadging is just one option an experienced and trusted FSP can offer to help manage significant volatility in work volume. Successful FSP vendors should help calibrate capacity and ramp up quickly across any function and service, including pharmacovigilance, regulatory, biometrics, on-site and remote monitoring, supporting both clinical trials and post-approval marketed products.

2020 CRO Market Size Projections: 2019-2024 - COVID 19 Update. July 2020. Accessed May 18, 2021.

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Capacity management and stability offer value for clients, their employees and FSP vendors.

Rebadging Gains Momentum Amidst COVID

	Through its dedicated business unit, PPD

 FSP, PPD has been involved in bespoke functional service partnerships (FSP) for more than 20 years, ranging from the very small, single protocol or product projects, to very large global projects spanning functions from lab programs through postmarketing safety and regulatory support.

	This article reviews a recent FSP in which the client required PPD to assume clinical monitoring and site support responsibility for more than 50 ongoing clinical trials across 45 countries, and launch new studies, while simultaneously reducing the client’s annual operational spend by more than 20%.

	Following the initial award, the client then requested that PPD implement the model a second time for a different business unit that operates in a very different clinical environment, with a separate management structure and unique workforce. PPD’s solutions included:

		Ensuring the smooth transition of ongoing clinical trials from the client to PPD and successful new study launches and execution

		Reducing the number of countries where our clients maintained operational staff and facilities

		Transferring and rehiring staff from the client to PPD, colloquially known as “rebadging,” thereby reducing or avoiding the redundancies or layoffs often associated with large-scale process improvement or reorganization efforts

	In certain European Union (EU) countries, this “rebadging” meant acquiring the client’s employees based on existing terms and conditions of employment (EU Acquired Rights Directive [ARD]

). In other countries, this meant the employees exited the client organization and PPD hired them on new contracts of employment-non ARD. Where necessary due to existing and proposed work, PPD could become responsible for the management of the client’s contingent workers.

	Key topics include the planning and implementation of the projects, continued oversight, data on employee engagement and program success to date, as well as an overview of the key benefits to both parties.

	A summary of the two programs can be seen in Table 1.

	The initial award (Program A) was made to PPD in July 2015, with the second (Program B) awarded in January 2016. For each program, the first activity was a joint kickoff meeting held between PPD and the client at which the executive sponsors and key stakeholders agreed on the following:

		Key performance indicators (KPI), both for the transition activities as well as ongoing operational delivery

		Governance, with agreed escalation pathways to project and stakeholder management

	Following the kickoff meetings and through close collaboration with the client, the HR, and local legal information gathering process, regarding the staff and the countries involved commenced. Obtaining this information enabled joint PPD-client HR project plans to be put together, whose timelines and deliverables were linked to the overall operational plan.

	The second stage involved setting up a number of joint workstreams to cover all aspects of the project (Figure 1). The purpose of the workstreams was to collaboratively agree and document the process in the 

joint operations handbook from implementation through to ongoing operational delivery.

	All workstreams were accountable to the PPD-client joint executive sponsors. It was essential that these workstreams collaborated closely with each other due to the interdependencies of certain activities and the necessity to adhere to local requirements from an operational, legal, financial, and people perspective. These workstreams had specific objectives and reflected the major aspects of program startup and ongoing maintenance. The workstreams created country-specific plans and processes that took into account local operational milestones as well as legal compliance. For the purposes of this article, we will focus in detail on the activities of the people and communications workstream.

Council Directive 2001/23/EC on the approximation of the laws of the member states relating to the safeguarding of employees’ rights in the event of transfer of undertakings, businesses or parts of undertakings or businesses. Also known as the Acquired Rights Directiv

		The objectives of this human resources (HR) workstream were:

			The smooth and timely transition of the client’s employees to PPD, in compliance with all applicable national legislation and any relevant client collective agreements or established policies/practices

			Maintain client business continuity for ongoing and newly launched clinical trials during all activities

			Achieve a better than 75% take-up of employee transition to PPD and the attraction to PPD of existing contingent resources

		While the HR team consisted of a central steering committee that was comprised of the core decision-makers, there were wider sub-workstreams consisting of representatives from legal, compensation and benefits, change management, corporate communications, and training and development (Figure 2). A large and diverse team was required as all stakeholders were closely involved in key “people” decisions and were able to provide their individual expertise in a coordinated effort. 

		One of the key deliverables for the HR team was to produce a detailed joint project plan of all HR activities

 both before and after the announcement, which would frame other operational activities thereafter by providing the legal parameters under which the transfer of staff could take place. Alongside this, a joint communication and engagement strategy plan was established in order to ensure early engagement with impacted employees immediately following the announcement within the client organization.

		In addition, PPD’s local line management was given special coaching and mentoring on how to achieve the successful, timely transition and onboarding of the client staff, and how to manage the emotions associated with change. These proactive approaches helped minimize any local issues and facilitated the rapid development of employee-manager relationship, which resulted in high retention rates.

		It was imperative that the HR team worked closely with the operational deployment team to ensure that timelines for HR activities and the transfer of staff were in line with the operational timelines for study transfer in each country. As such, the country-specific plans with transition timelines took into account individual in-country consultation periods with impacted employees. There were a total of 25 country plans for Program A and another 22 for Program B, for 118 staff total.

		Under the EU ARD, when there is a transfer of undertakings or business from one employer (client) to another (PPD), then there may be a legal requirement that the employee has the right to transfer with the work. ARD provides certain protections for the employees involved. As such, employees transferred from the client where this directive was applicable by law had their terms and conditions of employment protected upon transfer to PPD. Therefore, PPD effectively took a “lift and shift” approach to these EU employees. Specific consultation requirements had to be complied with in these countries, following the initial announcements for both programs.

		Employees in these ARD countries were provided with further reassurance that their terms and conditions would remain unchanged upon their transfer to PPD, both during the initial announcement and in follow-up meetings that took place within two weeks.

		For the non-ARD countries-where from a legal perspective the staff are terminated from the client but immediately hired by PPD to continue performing their same tasks-timely communication was paramount in order to immediately reassure and engage them, as well as to provide them with an insight into PPD and the opportunities they could expect. This was made possible by a series of country visits where the PPD and client executive sponsors met with employees by way of town hall and one-to-one meetings to explain the program and how it would affect them. At the time of the announcement it was noted that the client’s employees, although surprised by the announcement of the partnership, were looking forward to the opportunities that lay ahead for them with PPD. This is testimony to the carefully constructed and professionally executed communication and engagement strategy, as well as the competitive offers PPD rapidly provided and the protection of terms and conditions of employment where applicable. Feedback was extremely positive following these visits and employees were appreciative of the opportunity to have their concerns addressed immediately in one-to-one sessions. These initial country visits then were followed by further meetings within two weeks with their local PPD line manager and HR representative, again on a one-to-one basis.

		During these meetings, employees were provided with details of the role offered by PPD along with compensation and benefits packages and an opportunity to meet the management. For both ARD and non-ARD countries, the goal was to have the client staff or contingent workers close out work on a Friday and then return to the same work on the following Monday, with the only significant difference being that PPD would be issuing their paychecks.

		A program of this nature and complexity is not without its risks. In order to plan for and mitigate such risks, a joint risk register was maintained between PPD and the client. Table 2 illustrates several of the major risks, along with the agreed mitigation strategies.

		In order to assess results for the affected employees, we administered an employee engagement survey in the first year, followed by smaller “pulse” surveys thereafter. The surveys addressed the employees’ experience with:

A review of a recent FSP in which the CRO partner assumed clinical monitoring and site support responsibility for more than 50 ongoing trials.

Ranjit Bains

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Rebadging Gains Momentum Amidst COVID

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