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The Shifting Landscape of the Life Sciences Job Market

Pharmaceutical ExecutivePharmaceutical Executive: March 2024
Volume 44
Issue 3

Planning for a post-recession scenario is essential, ensuring companies are prepared to scale up when funding permits.

Image credit: Nicholas Felix/peopleimages.com | stock.adobe.com

Image credit: Nicholas Felix/peopleimages.com | stock.adobe.com

In recent times, the biotech industry has experienced a significant downturn, challenging both public and private companies in their pursuit of funding. A recent STAT article highlights the industry's transformation from a perceived “sugar high” to a period in which companies are grappling with downsizing, mergers, and closures. This shift is underscored by a nearly 60% drop in a major biotech stock index since early 2021, indicating the severity of the situation.

By early 2023, layoffs had already reached unprecedented levels, surpassing the job losses observed in the previous year. The Biotechnology Innovation Organization (BIO) reported that 107 companies had laid off employees in the first half of 2023, double the pace of the prior year.

Simultaneously, the number of open positions in the biotech sector witnessed a sharp decline. Bioscience job postings, which stood at approximately 19,000 in February 2022, plummeted to 10,000 by October 2023, according to labor market analytics firm Lightcast.

Current Trends

Throughout 2023, the biotech industry has grappled with a depressed market, increased contract spending, and reduced permanent hiring. This situation arises from a confluence of factors, including the pandemic's overfunding of research, a broader market recession and more.

Historically, the life sciences sector has been less volatile than other industries. The surge in investment during the pandemic led to increased hiring and inflated salaries. However, a subsequent overcorrection, driven by investors seeking improved returns, resulted in a recession unprecedented in the life sciences sector.

In this challenging environment, career mobility has stagnated, and the talent pool has become saturated. Funding for development is scarce due to investor caution amid economic downturns, impacting North American and European Union markets. Proposed restructuring in Europe aims to reduce costs, but workers still face uncertainty, hindering any job transitions.

Reevaluating Resources

Key implications for resourcing in the biotech sector include continuous layoffs, scaling back research pipelines, increased focus on development programs with rapid advances and reduced interest in platform companies. There is also a trend towards less reliance on fully outsourced models, with sponsors seeking greater control and options to bring contractors in-house.

Investing in current employees to build loyalty and avoiding the cost of replacing staff has become a priority. This strategy involves greater focus on employee education, talent development, and overall workforce stability.

Predicting Future Trends

The potential for larger pharma companies to acquire smaller biotechs with strong assets may increase in the future, accompanied by forced mergers and acquisitions. A skills gap is emerging due to increased remote work and reduced hiring, impacting the ability of workers to develop new skills.

As the industry recession persists, a reduction in investment in R&D is likely, leading to fewer development programs and increased competition for jobs. The most highly-skilled professionals may secure top positions, but without a rebound in investment, fewer new drugs may reach the market.

Implementing a Coherent Resourcing Strategy

Life science companies should incorporate intentional flexibility into their workforces, understanding the clinical development environment and making appropriate changes to R&D plans. Maintaining a close eye on competitor and partner activity is crucial. Planning for a post-recession scenario is essential, ensuring companies are prepared to scale up when funding permits.

To navigate the uncertain future, life science companies should consider partnering with an external resourcing specialist. This partner should recommend a right-sized solution, possess a proven track record, and have access to extensive networks of high-quality talent. Such a partner can provide valuable insights into market trends, aiding companies in planning for future rebounds.

The biotech industry finds itself in uncharted territory, with the ongoing recession challenging companies and professionals alike. While IPOs and acquisitions continue, a strong resourcing strategy is crucial for navigating these turbulent waters. Monitoring key indicators and staying prepared for market improvements will be essential for life science companies aiming to thrive in the evolving landscape.

About the Authors

James Nyssen, VP of Global Talent & Client Delivery and Matt Gallant, Senior Director of Business Development Strategic Resourcing, Advanced Clinical.

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