Johnson & Johnson’s JLABS incubator in San Francisco recently convened a meeting of biopharma industry executives. One of the hot topics for one of the panels was the competition for talent.
Original publication date: October 24, 2018
Johnson & Johnson’s JLABS incubator in San Francisco recently convened a meeting of biopharma industry executives. One of the hot topics for one of the panels was the competition for talent.
“The talent shortage is acute,” said Fred Kohler, vice president of people for GRAIL, a company focused on liquid biopsies for early screening of cancer.
In a wide-ranging discussion, executives discussed the differences between older job candidates and millennial job seekers, and how to handle high salary demand for biotech startups that aren’t generating revenue.
This is not particularly new, particularly in the San Francisco Bay Area and the Boston area, the two largest clusters of biotech startups in the country and possibly the world. MedCityNews recently tackled the subject as well, noting, “The San Francisco Bay Area is one of the most—if not the most—challenging markets in the world for hiring. This is especially true for life sciences and digital health companies that require people with highly specialized skill sets and advanced degrees.”
In the San Francisco area, the cost of living and difficult commutes are the largest factors. The Bay Area Council conducted surveyed registered voters in the nine-county Bay Area this summer and found that 46 percent of those surveyed indicated they were likely to move out of the area, and possibly out of the state. Exorbitantly rising housing costs that significantly surpass the top of the list of reasons why.
According to the California Association of Realtors, a San Francisco household would require $333,270 a year in income to afford a median-priced home of $1.6 million with a 20 percent down payment and a 30-year mortgage with a fixed rate of 4.44 percent. The monthly payment would be $8,330.
There are plenty of numbers to contemplate there, but let the median home price of $1.6 million sink in.
And for renters, the average rent for a one-bedroom unfurnished apartment in the city is about $3,258 per month.
At the JLABS meeting, Camille Samuels, a partner at venture capital firm Venrock, noted that job searches are “incredibly difficult” and that sometimes the results were high salaries for lower-quality candidates. “The problem we have is, if you have a company not getting to revenues and paying $6 (million) to $10 million (in salaries), you’re putting a noose around a company.”
Older job candidates may be willing to trade cash for equity, the panelists suggested, and can be teamed with up-and-coming employees. But hiring alone isn’t the problem. Alpna Seth, chief operating officer of Vir Biotechnology, noted that the attrition rate in biotech had almost doubled in the last five years.
Although some companies—and anyone outside the San Francisco Bay Area—might consider moving outside the Bay Area, MedCityNews says, “The short answer: absolutely not. San Francisco continues to be the top national life sciences and digital health hub offering countless benefits to the companies that call San Francisco home: access to talent, partners and VCs, as well as strong business development incentives and resources.”
But that will place pressure on companies to be extremely competitive in what they’re offering top talent. MedCityNews writes, “Because of the current hiring climate in the Bay Area, companies need to be more progressive in how they evaluate potential hires. Today, soft skills and an aptitude for learning are actually more important than traditional education and experience. Assessing a candidate’s ability to learn and grow with the company is how one needs to hire now. REWRITE your position profiles.”
MedCityNews also suggests that salary may not be the only compensation, although in a city where a six-figure salary is considered low income, it’s hard to imagine how effective that would be. Robin Toft, the author of the MedCityNews article, is founder, president and chief executive officer of Toft Group Executive Search. She points out that while the baby boomers in biotech value the traditional 9-to-5 in-office worker, millennials are more interested in flexible schedules and work-from-home opportunities.
Toft was also on the panel at JLABS. “Millennials are not bad people,” she said at the meeting. “We just need to manage them differently.”
Millennial job hunters are interested in their voices being heard, knowing when they will be promoted. They are also interested in training programs.
But in a talent pool of “super-seasoned” and “super young” job candidates in high-demand areas, Toft says, “candidates are calling all the shots.”
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