72% of employers are currently experiencing a decrease in the volume of candidates applying to their jobs.
One can scarcely glance at an economic report these days without reading about “The Great Resignation”. In November, a record 4.5 million people voluntarily quit their jobs according to the Bureau of Labor Statistics. Unsurprisingly, biopharma recruitment budgets are soaring compared to 2021.
“I think the war on talent is over because talent has won,” said Koenraad Wiedhaup, co-founder and CEO at Leyden Labs during BioSpace’s Recruiting Strategies for 2022 – Winning BioPharma’s Struggle for Talent panel. Wiedhaup was joined by Matt Zabel, vice president of sales strategy at Biotricity, Nancy Deisinger, SVP of human resources at ImpediMed and Raynie Smith, senior director of human resources at Glympse Bio.
Key concerns included how to merge virtual and physical workforces, remote hiring and flexibility and how to communicate a winning employer value proposition. There was a common theme connecting them, however, and that was the question of compensation.
Growth Causing Friction?
Attendees wanted to know if panelists were seeing a trend toward inflated compensation expectations and whether they were paying market salary for where employees are based or where corporate headquarters are located. These challenges may be particularly pertinent to the biopharmaceutical industry.
According to a recently-released report by the Biotechnology Innovation Organization (BIO), employment within the biosciences industry has seen significant growth over the past several years, with average wages nearly two times that of the national average. The average biosciences worker earns more than $107,000 – a whopping $50,000 better than their average counterpart in the private sector. But, in the current candidates’ market, does this need to be even higher?
“The biggest reason why job offers are falling through is that employers aren’t offering enough money,” said Josh Goodwin, CEO of BioSpace, referencing experiences from BioSpace Pro, BioSpace’s recruitment services arm.
According to BioSpace’s 2022 U.S. Life Sciences State of the Recruitment Market report, 72% of employers are currently experiencing a decrease in the volume of candidates applying to their jobs. The number of employers who believe the job market favors the candidate is up 31% from 2021 and 70% of employers say it’s taking longer than last year to fill open roles; in fact, it is taking the majority 2 to 3 months – or longer – to fill open positions.
Notably, 87% of survey respondents say candidate qualifications are inadequate for open jobs, yet 73% say they are facing challenges with their compensation offers being too low.
More Employees Considering Their Options
“I think there’s definitely a lot more people that are starting to explore the market, but we are definitely seeing a lack of available talent and the competition has definitely increased,” Deisinger said, adding that they are also “definitely going up against employer counteroffers.”
Of employers polled in a recent BioSpace survey, approximately half (51%) have made a counteroffer to retain an employee who received an outside offer, while 49% have not. Of those who have, the highest numbers either matched or offered to beat the competitor’s offer.
In what other ways can a company compete? Zabel shared that Biotricity is leveraging stock options, while Deisinger mentioned sign-on bonuses, equity and the intangible benefit of employees having ownership in the company. She also said that ImpediMed approaches these conversations from a “whole package” perspective.
“For us, it’s really talking holistically about what [employees] are getting from working at the company; the benefits of working in a smaller company, being in health care, obviously it gives a great purpose to what they’re doing,” she said.
Paying the Brave New Hybrid Workforce
The new hybrid workforce has also opened employers up to a wealth of global talent, but even this does not come without its compensation challenges. When it comes to benefits offered, Wiedhaup commented, “It becomes more complicated across different countries to standardize…it becomes really, really complicated because of the different tax systems in different countries.”
Of employers with remote workers who responded to the BioSpace survey, a slim majority, 57% say they pay the market rate for where the company is located, rather than where the employee resides.
For Dr. Michael Tkach, chief behavioral health officer at Affinity Empowering, a provider of workplace compliance and risk management services, the solution is a salary range. To guard against compensation adjustments for employees living in lower and higher-cost regions, Affinity will post jobs with a salary range.
“We try to just have a fairly compensated area where everybody starts from, and then where you live is where you live,” Tkach said. “That way, people can make an informed decision: based off of this compensation rate, with where I’m living, does it make sense to have this role?”
Within this range, employees have the freedom to move to another location without having to consider whether or not there is another physical office for them to work out of. For virtual roles, this is yet another benefit of the new hybrid workplace. When it comes to ex-U.S. hires, Affinity relies on a competitive market analysis, assessing industry benchmarks for the accepted rate for a role in a particular country. For Affinity, however, this is largely determined by the company’s business model.
“Because we work with a lot of either healthcare payers or other types of government contracts, there are more limitations on when people are in-country or out-of-country,” Tkach said. “Having that separated to base pay for this role in one country as opposed to another makes sense because that often dictates what projects and what things people can work on.”
Retaining High Performers
The challenges don’t stop when an employer and candidate reach an agreement, either. This is when the issue of parity between new and existing employees arises. Current employees were not hired in such a formidable candidates’ market, and they are just as eager to take advantage of the current one to better their situation. Sixty percent of life science industry professionals are actively looking for a new role, and another 21% claim to be “casually looking.” This makes for 81% of the workforce that employers need to do their best to retain.
Of employees polled in the most recent BioSpace survey, 58% had received a salary increase in the past year, and 76% of those increases came at the respondents’ current jobs.
Tkach shared that when needed, Affinity does consider whether an adjustment may be appropriate based on the current salary range and what makes sense for the role.
“The main challenge is, do you want to maintain and retain good employees and people that have experience who have been high performers, or do you want to replace your work staff? Because if you don’t do those adjustments…you are at risk of losing people,” he said. “You lose a lot of top talent when you don’t consider what the current economic state is and perceived equity and equality among team members.”
Adjustments are one strategy, but the panelists stressed that compensation was not the only factor to consider, suggesting that employers investigate what their employees’ true motivations are for looking elsewhere. It may be a salary increase or simply a more fulfilling role. “Competition might be one thing, but it’s usually something else as well,” Smith said.
After all, not everything in life is about money.
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