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Pharma companies need to rethink their strategies to ensure that they hire the best available talent 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 51% of U.S. companies have started layoffs or are planning to start. Bucking this trending statistic, however, are the pharmaceutical and life sciences industries. This sector has continued a high rate of growth year over year—globally—with no signs of slowing as we near 2023.
According to Cushman & Wakefield, “Life sciences employment has continued to fare better than the U.S. job market, with year-over-year (YoY) growth up 7.9% and 11.4% in 2020 and 2021, respectively.” We are seeing this same trend with our customers around the globe.
One factor driving high demand for pharmaceutical talent is the vaccine boom. Companies that produce vaccines have been operating at an accelerated pace since the onset of COVID-19, and they are still going strong as new variants emerge. In addition, the unprecedented breakthroughs in research and development that were made during the creation of these vaccines are being applied to other disease areas and processes, further supporting industry growth.
Our aging senior demographic is also driving growth. This market segment requires more specialized care, more newly developed drugs, and more targeted treatments.
We are also seeing faster development of emerging and addressable markets that are now able to afford more medicines. The APAC region, for example, has become an attractive location given its proximity to a growing consumer base and strong technology talent found there.
The cumulative result of these growth drivers is an incredibly stable industry worldwide. KPMG found 70% percent of companies across all life sciences industries, including pharma, expect to increase their M&A activity. According to LinkedIn, two of the five fastest-growing jobs are related to pharmaceuticals. While demand continues to rise, hiring to fill these roles, however, remains a sticking point.
While demand for pharmaceutical products and services is on the rise, increased need is outpacing available resources to fill vacant and newly-created roles. The result is a talent shortage based on attrition and a skills gap that is likely to remain for the foreseeable future.
Attrition rates are unlike anything seen before in the pharma industry, or any industry for that matter. According to McKinsey, the voluntary quit rate is 25% higher than pre-pandemic levels, with two-out-of-five employees globally thinking about leaving in the next three-to-six months. In India, 60% of workers expressed a desire to leave their current jobs, while in Singapore 49% expressed job discontent. Both are higher than the U.S., which comes in at 40%.
What makes this turnover rate more challenging is that it’s not just employees leaving their current roles for other similar ones. As McKinsey also points out, 65% of job leavers are leaving their industry completely. Our experience in the sector tells us that the industry as a whole has always had a heavy reliance of hiring job-ready talent from competitors with graduate hiring and cross-sector hiring viewed as less preferred by hiring managers. With the current turnover trends, this talent pool of job-ready candidates is diminishing. Larger pharma organizations, which have deeper pockets, are sometimes able to offset this challenge by offering bigger salaries and other perks to attract what job-ready talent is still available. However, midsize and smaller pharma entities struggle to do the same.
The current economic climate is also playing a role in hiring turbulence. High inflation and a high cost of living are driving employees to seek higher salaries, and the most effective way to achieve this is through changing jobs instead of internal mobility. According to a study from Pew Research Center,
from April 2021 to March 2022, 60% of workers switching jobs saw an increase in their real earnings, while the median workers who stayed in place during that same time saw a loss.
While it’s uncertain how other economic factors will play out over the next 12 months, based on what AMS is seeing, we expect the same hiring volumes in the industry today to continue into next year. That means pharma companies have to be smarter, faster, and more strategic than ever before in order to capture the talent they need.
Looking ahead, pharma companies will need to find new ways to attract workers in this highly competitive and financially motivated job environment.
Rethink your approach to job skills
Instead of considering only those candidates that meet specific skills parameters defined for a particular role, look to fill roles based on an applicants’ complimentary 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 will allow you to promote from within. It also means being open to increasing salaries when your current workers take on a new role.
Companies should be open to hiring someone who may not have the exact experience required—whether that’s someone who is entry level or someone looking to change industries or career focus within an existing industry—but who shows great potential to be successful in that role based on their past experience, strengths, and transferable skill set.
Consider splitting one role into two if you’re struggling to find one person with all needed skills or reduce the level of complexity initially required to do the job. For all roles across the company, be open to offering more flexible working arrangements and work conditions that align with what your multi-generational workforce wants.
Look outside the pharma industry
Don’t rule out targeting talent from other industries with transferable skills, or talent from remote geographic locations. Data-based recruiting can help you hone in on better matches for all open positions. For example, software can help companies better identify specific skills needed and AI can match those skills against candidates coming from other industries.
With talent so scarce, candidates are likely getting offers from several companies. While you don’t need to feel rushed, the recruiting and hiring process must move expeditiously. Consider shortening the interview cycle by interview panels (instead of several 1:1 interviews). Be flexible on interview time and place; for example, be open to an after-hours video interview even if you originally wanted an in-person meetup during normal business hours. Align with the hiring team and HR so that once you know you’d like to make the offer, processes are in place to extend an offer without delay.
Given what we’ve seen in 2022, all signs point to more hiring in pharma in 2023. Whilst companies are cautious about the global economy, the large majority of life sciences and pharma companies I work with are anticipating a strong 2023.
Clients are reporting that they’re on track to exceed their growth goals for this year and we expect 2023 goals to be yet more ambitious. At a time when unpredictability seems to be the only constant we can depend on, the pharmaceutical industry is well-positioned to weather the economic and industry challenges on the horizon.