The last few years have been a wild ride for life sciences companies. With the introduction of mRNA vaccines to battle variants of Covid-19, interest in next-generation production platforms has skyrocketed, spurring innovation and opening doors to new therapeutic possibilities. In turn, this initiated a surge of venture capital investment in biotech start-ups — and the demand for new hires who know the value they bring because of their coveted technical skills and talents.
Other trends are also shaping the industry. In a post-pandemic workforce, employees expect work-life balance and demand more flexibility when it comes to working from home and flexing their schedules. They know if they are not completely satisfied in their current roles, they can land at another company, often with a higher salary and a higher-level title. The statistics provide evidence of this: the average turnover rate in life sciences and medical devices is 20.6%, which is higher than financial services, energy and other sectors.
As biotech and life science companies approach the end of year, it takes careful planning to ensure they are properly staffed for 2023. With that in mind, experts at PharmaLogics Recruiting, working with colleagues from Elysian HR Consulting, have put together a checklist of key considerations that people leaders across the industry should consider including in their end-of-year strategic planning.
Go Beyond the Numbers
Joe Perez, Senior Vice President of Business Development at PharmaLogics Recruiting, encourages biotechs to resist the urge to start end-of-year planning by looking solely at the numbers. As he points out, “There is so much busywork that happens in biotech companies in budget planning, then forecasting and re-forecasting.” This occurs because, all too often, Finance departments go to each function seeking the headcount needed. They get best-guess estimates, which then inform budget forecasts. Unfortunately, these estimates usually don’t tell the whole story or create a complete picture of the company, which leads to mid-year adjustments and urgent candidate searches.
According to Anushka Arellano, Founder of Elysian HR Consulting, it’s far better to take a strategic approach to workforce planning. “Finance tends to drive headcount discussions,” she says, “when it really needs to be an integrated discussion with leadership across the board.”
Ann Corkum, Anushka’s partner at Elysian agrees: “It’s important to start people planning discussions at a strategic level by asking, what do we need to accomplish in the upcoming year and what skills and capabilities will we need to deliver on those key business objectives?”
Maximize In-house Talent
When answering headcount questions, it’s critical to think about in-house talent management as much as talent acquisition. Adam Kaner, Senior Vice President of Project Management at PharmaLogics Recruiting, advises life sciences hiring managers to avoid being too shortsighted. “Many organizations have a hiring thought process focused on the here and now, not down the road. You can hire a bunch of people today, but what is the impact of that downstream?”
A solid talent management process includes succession planning, ensuring that employees have plenty of growth opportunities, that they have a clear path to transition smoothly from one role to another with minimal disruptions, and that they will be able to consistently leverage their strengths and further develop their skills.
This means a company may have the capabilities it needs in-house to fill some of its hiring gaps. An employee in one business unit could be a potential fit for an open role in a different business unit, even if the two functions seem to be in far-flung parts of the organization (e.g., R&D versus Commercial). In fact, this creates a win-win scenario — one in which employees get to enjoy new professional development experiences and the company gets to use its resources efficiently. It’s also an excellent way to show employees that the company is serious about retaining and developing its talent.
Of course, people managers must remain open-minded about their direct reports wanting to take on different responsibilities. This requires a realistic assessment of where current talent is in terms of both performance and potential, as well as their behaviors and interpersonal skills. It also requires that managers act as advocates and coaches, supporting moves that are good for the company and the employee even when it means letting go of a top performer on their team.
“It’s essential to have managers who are willing to have employee development conversations,” Corkum observes. “These need to be holistic discussions: What are the employee’s interests? What are their goals and aspirations for a satisfying career trajectory? How can these interests be aligned with current and future business needs? These kinds of discussions can be intimidating if managers think they need to have all the answers (they don’t), and employees don’t always know how to ask for it, but it is incredibly important to have these conversations.”
Focus on the Employee Journey
Looking at internal talent will only get you so far. To fill certain gaps, you will need to hire candidates from outside the organization. The good news: the talent management story still plays well during the hiring process.
In its recent How to Attract and Retain Talent survey, BioSpace asked life sciences professionals to list their top motivators when evaluating job opportunities. Compensation was a top driver, but growth opportunities were even more important, with 63% of respondents saying they were seeking out roles that could advance their learning and development.
For this reason, Arellano advocates that companies focus on employee development from the very first interview. “Let job seekers know that your company is making an investment in their career. Explain that professional development is part of the fabric of your company and that you evaluate leaders on how well they do this. This will be attractive to candidates.”
Be Realistic about Compensation
Ultimately, conversations with candidates will come down to compensation, and biotech companies must go into the hiring process with their eyes — and piggy banks — wide open, says Kaner. Hiring for Q1 can be especially challenging. Candidates are unlikely to walk away from a cash bonus in Q4, which sometimes isn’t awarded until Q1. Hiring managers should be prepared to cover at least part of the year-end performance bonus while also offering a sign-on bonus for the value left on the table with the current employer. As Corkum puts it, “Nobody makes a career move to earn less. Trying to negotiate on this point simply isn’t going to work, especially if it’s an end-of-year bonus.”
At the same time, Perez notes, it’s possible to counteract forces that contribute to salary inflation by staying open-minded to potential talent. “If a candidate checks all the boxes but doesn’t have the 10 years of experience specified in a job description, then you may be able to get the talent you need at a lower salary. Instead of paying at a VP level, you may only pay at the Director level and have a clear growth opportunity to offer a candidate.”
“Managers in biotech too often overvalue papered credentials,” Corkum says. “They disregard candidates who aren’t PhDs or fall short of the 10 years of experience they feel is needed. They would be better off focusing less on quantitative details and more on qualitative factors. Look at what candidates have accomplished, not their number of years of experience or whether they come from an Ivy League school.”
No matter what, hiring managers should be cautious about title inflation. Dressed-up titles may make up for compensation shortfalls, but they can also attract unqualified candidates. Ultimately, excessive title inflation can hurt the reputations of companies and their recruiters and can reduce the productivity of existing teams.
Emphasize Culture, Not Just Compensation
Finally, don’t forget that culture can be a differentiator when it comes to attracting scientists and drug developers. While you’re shoring up your talent management strategy, don’t forget to hone the messaging that clearly communicates the purpose and mission of your business. This should include a commitment to create a supportive and flexible work environment along with company culture differentiators that you can back up with examples.
When all of these elements come together, HR professionals and hiring managers at biotech companies can compete effectively — and be well-prepared to start 2023 with a pipeline of high-quality candidates.