A looming talent crisis
SummaryFew, if any, of those running life sciences companies in the UK or any of its peer economies in the West will look back on this point in history with great affection.
Few, if any, of those running life sciences companies in the UK or any of its peer economies in the West will look back on this point in history with great affection. The pharmaceuticals sector is under pressure all round – from increasing competition in the emerging world, from healthcare reforms and the effects of austerity and from the ongoing challenges of bringing drugs successfully to market. So, with so many problems already competing for managerial attention, it’s perhaps no surprise that a significant talent crisis looming in the background seems to have gone largely ignored.
When headline writers keep telling us that employment markets, particularly in the European Union, are in meltdown, it’s tempting to assume that the human agenda of the industry will take care of itself. But is this really true or is it the mark of dangerous complacency?
Optimists here in the UK have pointed to the fact that applications to science degrees went up last year – in chemistry, for example by nearly 4% and in biology by almost 7% - and suggest that this could be a trend which will provide a pipeline of eager and able graduates to fill future research positions. But this rise may actually be something of an aberration, a spike prompted by a bid to avoid the new increase in programme fees. Furthermore, if one looks at figures from the Higher Education Statistics Agency (HESA) it appears there has been a drop in the number of students on chemistry degree programmes since the mid-1990s. And while biological sciences at first seems to have experienced significant growth, closer examination shows that this is almost entirely confined to ‘softer’ sub-sets, such as psychology and sports science, rather than those from which researchers are traditionally drawn. At the same time the historically reliable pool of graduates from overseas is drying up. Tighter entry requirements have made the UK more difficult to work in and many of the brightest and best are no longer so keen to develop their careers in the West as their predecessors. The rapid growth of opportunities in the Asia Pacific region, for example, often means that studying in the West is now a route to a job back home rather than in the host country.
And, of course, it’s not just at entry level that life sciences faces significant staffing challenges. Several years of stop/start recruitment of graduates, of culling researchers in established economies to create cheaper operations in emerging markets and insufficient investment in career development have all led to gaps amongst the experienced workforce, both within end-user companies and CROs.
Those who make their living from predicting the future seem to believe that a shortage of the right talent is going to become a significant problem across a wide range of industries, not just life sciences, over the next few years. A recent report from the strategy consultancy, McKinsey & Co, forecasts that there will be a staggering shortfall of 85 million high and middle skill workers around the world by the year 2020. Perhaps not surprisingly the latest annual survey of top CEOs conducted by PwC found the sourcing and retaining talent to be one of the key worries keeping them awake at night.
Time, perhaps, for the life sciences sector to wake up and smell the coffee.
At first sight it does look as if a number of major life science companies have grasped the importance of the impending talent crisis and are doing something to address it. Many have developed in-house recruitment departments, for example, to focus on sourcing the right people for business critical roles. However, anecdotal evidence suggests that such departments are not being given the necessary resources and direction to achieve real results. There is still too much reliance on conventional advertising and specialist recruitment agencies, which both pushes up costs and extends the time necessary to make hires. And, perhaps most worryingly of all, there is little in the way of robust assessment of quality of hire. The results will come as no surprise. Organisations’ ability to respond to the market with speed and agility is constantly undermined and the morale of existing business critical staff, working under constant pressure with insufficient support is steadily eroded.
So what is going wrong and what does the industry need to do to remedy it?
One of the major problems that any life sciences company faces in addressing talent shortages is a lack of alignment between the human agenda and overall commercial strategy. Or to put it more simplistically, there is no point making a commercial decision if you don’t have – or can’t find – the people to implement it. Although apparently blindingly obvious, this approach of ‘strategic workforce planning’ is not only extremely rare in the pharmaceuticals sector, it’s decidedly thin on the ground everywhere. While there is certainly plenty of enthusiasm among senior HR professionals to implement it, truly successful examples, such as those in operation at parts of Telefónica and at the steel giant, ArcelorMittal are few and far between.
The difficulty lies in convincing corporate boards that making the necessary investment of time, effort and cash, particularly in tough economic times, is worthwhile. To do so successfully means going back to the basics and defining what advantage a business derives from its people in its chosen marketplace and, more specifically, how they set it apart from its competitors. But understanding how this works now is just the start. What really counts is understanding how it is likely to work in the foreseeable future.
At first reading, of course, this might sound vaguely nonsensical. As a species we’ve proven spectacularly bad at predicting what’s going to happen next week, never mind several years down the track. But the pace of change in the modern world means that having some form of educated guess about what is to come isn’t just a game, it’s a commercial imperative. Few companies can rely on their traditional markets remaining static over the next few years. Change and adaptability are the order of the day. Just look at how O2, for example, has responded to the over-crowding of the mobile telecoms space with plans to diversify into areas such as financial services, how TNT has moved from mail and parcel delivery into logistics and facilities management or how GE Healthcare has developed process improvement consultancy as an adjunct to the provision of medical machinery. And all this means that the skill sets which make a business successful now may be of little or no use in just a few years time.
Identifying these ‘future skills’ is therefore vital. And so is analysing how much of the talent that possesses them is available to pipeline for when it is needed. But this must be done in an atmosphere of stark realism rather than unjustifiable optimism. Wish lists of people who don’t exist or whose availability is in doubt are worse than useless. Scoping out the ground in this way is the essential precursor to putting the machinery in place that will actually deliver the necessary talent as it is needed – the establishment and communication of a strong employer brand, advertising, marketing, the use of special media and the creation of dedicated talent pipelines. And while there is little evidence of this happening in life sciences yet, canny operators in the sector may gain spectacular competitive advantage from learning how to replicate successful programmes already in place in other, similar industries.
The multi-national conglomerate, GE, for example, faced a challenge in its European operations that will be familiar to many responsible for staffing in the pharmaceuticals sector – how to find and retain sufficient highly qualified technical specialists and how to line up candidates from the talent pool for roles that had not yet even been fully defined. Because the target group – in the GE case, sub-sea engineers - was not only relatively small, but in high demand, conventional recruitment techniques had proven distinctly inadequate.
The solution has been to map out the talent market and then segment it into target individuals and groups to allow for relevant, compelling and useful messaging. This messaging is designed to go well beyond the simple flagging up of job opportunities by providing its targets with genuinely helpful and interesting opinion, news, predictions and authoritative thought leadership. The key is to build engagement, putting GE into an ongoing conversation with the people it will want to hire either immediately or at some unspecified, but highly likely, point in the future. And, perhaps most important of all, it allows HR to contribute directly to commercial decision making, giving it the tools to state with high certainty if the individuals necessary to a project or development actually exist and how easy or difficult it will be to acquire them.
If one thing is certain in an increasingly uncertain world, it’s that things rarely get better on their own. For a whole host of reasons that very likely seemed to make good sense at the time, the life sciences sector is simply not producing enough trained and able people to service its needs. The clinical research population is already too small and is dwindling all the time. GCP attainment levels are becoming embarrassing. In Europe only around 40% of those taking GCP qualifications pass them. The pool of talent is drying up. So if anywhere looks likely to be the next front in McKinsey & Co’s notorious ‘war for talent’, the pharmaceuticals sector is it.
But this is not a picture of unrelieved doom and gloom. Those companies that are willing to embrace the new approaches of building engaged talent communities and developing pipelines of talent, of matching their business to their people planning for the future will gain demonstrable commercial advantage and render themselves more proof to the shifting demands of the market . This, I would argue is the time for ambitious employers in the life sciences industry to take the initiative. This is most definitely not the time to ‘wait and see’.
About the Author
Julie Copperthwaite is a Director at Ochre House and considered a leading expert in Pharma and Life Sciences talent sourcing, with 20 years Human Resources and Recruiting experience, including extensive international experience across EMEA and APAC. Julie can be contacted through her email
About Ochre House
Drawing on more than fifteen years' experience, Ochre House is a major international player in recruitment outsourcing and the wider talent management field. Ochre House delivers innovative workforce management solutions by integrating its expertise in talent sourcing with employee engagement, development and retention capabilities. It serves its multinational client base from operations based in nine countries across the globe. More information on Ochre House is available at www.ochrehouse.com