Pharmaceutical companies need to rethink their strategies to ensure they are hiring the best talent available in today’s market.
In the wake of the pandemic and sluggish economy, many companies have slowed hiring, some significantly. In fact, a recent PwC survey found that 51% of US companies have started or plan to layoffs. However, the pharmaceutical and life sciences industries are resisting this trend statistics. This sector has continued at a high rate of growth year after year – globally – with no sign of slowing down as we approach 2023.
According to Cushman & Wakefield, “Life sciences employment has continued to outperform the US labor market, with growth of 7.9% YoY in 2020 and 11.4% in 2021, respectively.” We see the same trend among our customers around the world.
What is driving the increasing demand for talent?
One factor driving high demand for pharma talent is the vaccine boom. Companies that make vaccines have been operating at an accelerated pace since the outbreak of COVID-19, and they’re still going strong as new variants emerge. Additionally, the unprecedented R&D breakthroughs achieved during the development of these vaccines are being applied to other disease areas and processes, further supporting the growth of the industry.
Our aging senior demographic is also driving growth. This market segment requires more specialized care, more newly developed medicines and more targeted treatments.
We’re also seeing faster development of emerging and more responsive markets that can now afford more drugs. The APAC region, for example, has become an attractive location due to its proximity to a growing consumer base and the strong technology talent that can be found there.
The combined result of these growth drivers is an incredibly stable industry worldwide. KPMG found that 70% of companies across all life science industries, including pharmaceuticals, expect to increase their M&A activity. According to LinkedIn, two of the five fastest growing jobs are related to pharmaceuticals. However, as demand continues to rise, filling these positions remains a sticking point.
Why is it still difficult to fill roles?
As the demand for pharmaceutical products and services increases, the increased need outstrips the resources available to fill vacancies and newly created positions. The result is a talent shortage due to attrition and a skills gap that is likely to remain for the foreseeable future.
Turnover rates are unlike anything seen before in the pharmaceutical industry or any other industry. According to McKinsey, the voluntary termination rate is 25% above pre-pandemic levels, with two in five employees globally considering quitting in the next three to six months. In India, 60% of workers expressed a desire to leave their current job, while in Singapore 49% expressed job dissatisfaction. Both are higher than the US, which is at 40%.
What makes this turnover rate even more challenging is the fact that it’s not just employees leaving their current positions for others who are similar. As McKinsey also points out, 65% of graduates leave their industry entirely. Our experience in the industry tells us that the industry as a whole has historically relied heavily on hiring ready-to-work talent from competitors, with graduate hiring and cross-industry hiring seen as less favored by hiring managers. With current fluctuation trends, this talent pool of employable candidates is shrinking. Larger pharma companies that have deeper pockets can sometimes offset this challenge by offering higher salaries and other perks to attract the talent that is still available to work. However, mid-sized and smaller pharma companies are struggling to do the same.
The current economic climate is also playing a role in the hiring turmoil. High inflation and the high cost of living are driving employees to seek higher salaries, and the most effective way to achieve this is through job rotation rather than internal mobility. Corresponding a study by the Pew Research Center,
From April 2021 to March 2022, 60% of workers who changed jobs saw an increase in their real income, while the median workers who remained in place over the same period saw a loss.
While it is uncertain how other economic factors will play out over the next 12 months, based on what AMS is seeing, we expect the same hiring volume in the industry today to continue into next year. This means pharmaceutical companies need to be smarter, faster and more strategic than ever to attract the talent they need.
Competing for talent in unconventional ways
Looking ahead, pharmaceutical companies need to find new ways to attract workers in this highly competitive and financially driven work environment.
Rethink your approach to professional skills
Rather than only considering those candidates who meet specific skill parameters defined for a particular role, seek to fill roles based on an applicant’s complementary skills, soft skills, or potential to learn new skills.
This could mean looking within your existing workforce to upskill employees through training and learning initiatives that allow them to rise from within. It also means being open to raises if your current employees take on a new role.
Organizations should be open to hiring someone who may not have the required experience – be it a recent career changer or someone looking to change industry or career focus within an existing industry – but who has great potential to move into it Role to being successful is their previous experience, strengths and transferable skills.
Redesign roles
Consider splitting one role into two if you’re having trouble finding a person with all the skills required, or reduce the initial complexity required to get the job done. For all positions in the company, be open to offering more flexible working arrangements and working conditions that suit the desires of your multi-generational workforce.
Look outside the pharmaceutical industry
Don’t rule out targeting talent from other industries with transferrable skills or talent from distant geographic locations. Data-based recruiting can help you get better matches for all open positions. For example, software can help companies better identify specific required skills, and AI can match those skills with candidates from other industries.
Decide quickly
Because talent is so scarce, candidates are likely to receive offers from multiple companies. While you don’t need to feel rushed, the recruiting and hiring process needs to be expeditious. Consider shortening the interview cycle with interview panels (instead of multiple 1:1 interviews). Be flexible in terms of time and location; For example, be open to an after-hours video interview, even if you originally intended to meet in person during normal business hours. Coordinate with the hiring team and HR so that once you know you want to make the offer, there are processes in place to renew an offer without delay.
Looking to next year
Given what we’ve seen in 2022, all signs point to more pharma hiring in 2023. While companies are cautious about the global economy, the vast majority of life sciences and pharmaceutical companies I work with expect a strong 2023.
Customers report that they are on track to exceed their growth targets for this year and we expect targets for 2023 to be even more ambitious. At a time when unpredictability seems to be the only constant we can count on, the pharmaceutical industry is well positioned to meet the economic and industry challenges ahead.
Jim Sykes is Sector Managing Director for Pharmaceutical & Life Sciences and Professional Services at AMS (formerly Alexander Mann Solutions).
