How to workforce plan in emerging Life Sciences companies

What are the big growth areas for the Life Sciences industry? How is investment being secured to fuel that growth – and how will this change over the coming year? And what does all this mean for workforce planning? 

My article below provides you with the answers to these questions and more.

Since I began working in the Life Sciences workforce solutions space in 2004, the landscape has changed dramatically, driven by a multitude of factors that together have allowed for significant improvements to patient healthcare, both through prevention / early detection and treatment. The healthcare industry is incredibly innovative, embraces change, and has more recently become heavily reliant on technology and its ability to further speed up the rate at which we can innovate and save lives. The goal for any healthcare company is to improve patient outcomes and create solutions to the ongoing healthcare challenges we face in 2024. To do this, it is important that they have highly capable and well-planned workforce strategies.

 From the late 90’s to the early 2000s the landscape was dominated by big pharma who tended to focus on developing drugs for conditions with larger patient populations such as cardiovascular and respiratory disease, cancer, diabetes and so on. These companies focused on diseases that will affect most of us at some stage in our lives - a sensible commercial strategy with a focus on helping the highest number of patients at one time while improving public health.

From around the year 2000, however, we started to see increased attention turning to delivering solutions for smaller patient populations and for rare and orphan diseases. This trend was driven by developments in scientific capabilities and the fact that good treatments were already widely available for many more common conditions. Of course, as well as costing a lot to develop, drugs for smaller populations are also more expensive to prescribe and harder to get approval for. As such, a sensible strategy is to work in areas that combine larger patient populations with unmet medical need, such as first line metastatic cancers. This approach has led to an increase in the number of Venture Capital funds appearing in the Life Sciences market, attracted by the ability to support innovative companies with the goal of improving public health, while also providing the potential for high returns on their investment if a drug was approved and became reimbursed.

But what are the most recent trends emerging?

For the past 18 months, the post covid Biotechnology investment slowdown has been the biggest industry wide trend within the emerging and mid cap biotechnology segment, with companies needing to prioritise key pipeline products, cashflow run rates and streamline their operating costs to survive. We have therefore seen multiple waves of redundancies in this sector as companies try to realign strategic goals and make best use of their current assets. A leaner and more capital-efficient approach is emerging, with biotech's relying more on outsourcing.

Most recently, the technology revolution has begun transforming how we develop new drugs and treat patients by using machine learning (ML) and artificial intelligence (AI). Because of this, we can expect a significant uptick in the progression of science and drug development, coupled with the eventual drop in cost as this process becomes more automated. The focus is certainly on prevention and early detection where possible, coupled with increasingly technical solutions to treat diseases such as personalized medicine. From drug discovery to clinical trials, AI is already beginning to save time, automate and improve overall efficiency. I expect technology to have the biggest single impact on how we develop new drugs over the next 24 months, assuming companies can obtain and train the talent required to execute.

And how have these trends affected recruitment and workforce planning in the Life Sciences sector?

This surge in technological innovation combined with the diversification into treatments for a wider range of disease types has caused real challenges for recruiters in the Life Sciences sector. The number of emerging areas in which only a small pool of people has specific experience is accelerating at pace. For example, an in-depth knowledge of an innovative cancer immunotherapy treatment – such as CAR T-cell therapy – can often be confined to a small group of expert researchers and clinicians.

This is where an open-minded approach during recruitment is essential. Looking at candidates with adjacent skill sets and those with relevant experience from outside the Life Sciences sector are both key strategies in tackling the talent scarcity problem. As is the introduction of upskilling and development programs that can help new hires and existing talent alike release their full potential. Such approaches are essential to avoid simply entering a bidding war for a small, finite pool of rare talent.

Nowhere is this truer than in the field of technology. Those with AI and ML experience are in particular demand across the Life Sciences industry to develop bespoke tools in areas from end-to-end drug discovery to diagnostics. The Health Tech, Fem Tech and Telemedicine sectors are all expanding rapidly, with a host of start-ups driving innovation, growth - and competition for talent. So, attracting tech professionals from other markets and upskilling them with sector-specific knowledge (for example, specific governance around the use of data in healthcare) is an important part of any attraction strategy.

Additionally, it has become increasingly important for companies to give careful consideration to the optimisation of their workforce engagement strategies. Carefully balancing their portfolio of full-time employees; temporary workers and independent service providers can help companies balance their ability to scale flexibly while still maintaining a committed and developing workforce. 

The benefits in having varying funding deals when it comes to drug and medical device discovery – and how this affects workforce planning.

Each route to funding provides access to money in differing forms.

Venture Capital (VC) funding is designed for early-stage companies that are at the start of their R&D journey. The end goal depends on both the company’s pipeline and the leadership involved but tends to be either an IPO (a public offering selling shares to investors) or an exit to a trade buyer. VC funds are most common at times of innovation and change and look to take advantage of opportunities for high returns on investment by developing a successful new medical device, innovative health tech product, or a drug that gains approval and gets reimbursed. At this early stage, clinical and research staff are the main focus, but workforce planning for later growth is also key.

In Life Sciences an IPO often occurs to fund intensified R&D, and/or to commercialize a newly approved drug or treatment. It normally provides the quickest route to the largest amount of funding and is most suited to companies who have leadership, experience, product pipeline and appetite to continue to grow the business. Directly after an IPO, there is frequently an explosion in recruitment activity, as companies secure the staff to take their business from clinical to commercial success. Careful workforce planning is needed well in advance of an IPO, to deliver the necessary talent at speed and scale, in key areas from operations to marketing. 

Mergers & Acquisitions (M&A) are an equally good route to commercial product success. However, they are achieved through being acquired by a large corporation which generally means the business is absorbed into the larger company, its pipeline is acquired, and the leadership team may be transitioned out over time. We are currently seeing a significant increase in the number of M&A deals happening in the sector. Due to a range of macro-economic factors – including high inflation - company valuations have slumped from historically high levels in 2021. This has made the IPO route almost impossible. As a result, many companies are opting for a sale to ensure that the business remains funded and vital work to help patients is secured.

Private Equity (PE) funding is very different and tends to best suit commercial companies who are looking for expertise to help the business scale through strategic support, the implementation of improved technology & automation processes, and operational improvement & efficiency. PE tends to fund well run companies who need capital to supercharge a plan that is already in place and working. It therefore tends to suit service companies, rather than drug development businesses and so works well in specialist markets and with consultancies, contract research organisations (CROs) and outsourcing businesses.

But how can Talent Acquisition (TA) and Human Resource (HR) leaders use this knowledge to help them with strategic workforce planning?

If you are working as an Internal TA or HR leader, it is important to understand your end goal and what both the executive team and investors are trying to achieve. You can then work backwards and create a workforce plan that is suitable for the business model you operate within. Workforce planning is much more than simply hiring staff; it is about ensuring the correct people are working on the right projects and that the planning is efficient and cost effective. For example, if your corporate plan is to develop a molecule and take it through to proof of concept before then looking for a partner to commercialize it, then your approach to workforce planning and how you utilize an outsourced model will vary significantly to a company that plans to IPO and become a commercial enterprise.  

Our latest research report on Managing High Workforce growth in the Life Sciences sector, provides the applicable HR & TA considerations needed. Importantly, the report can serve as a useful tool for HR and TA professionals as they embark on their strategic workforce planning to accompany these periods of growth.

We truly appreciate these variations at Skills Alliance. When we form a relationship with a new client, we make sure we understand your end goal, so we can provide you with the product and service that best suits your needs. Each of our service lines is designed to solve a unique problem, whether that is to support you with your rapidly growing contingency workforce as a Managed Service Provider, help with executive leadership hiring or simply to ensure that you have the best possible person in your company for a business-critical role. We only work in the Life Sciences sector, so we can combine in-depth knowledge of the industry, with the full suite of workforce management services and solutions.

How the predicted investment landscape for LS companies in 2024 and beyond will affect hiring requirements.

I believe we will see a continuation of a high volume of M&A deals throughout the first half of the year, due to the low perceived value in the current biotech market versus its historical value, and the need for big pharma to grow their pipelines. There is an impending patent cliff with quite a few large corporations being impacted over the next 2 years and this has been a crucial factor in the high volume of M&A deals, in combination with the unique macro-economic climate we find ourselves in. M&A does create uncertainty and usually results in a workforce restructuring and so it would be sensible to anticipate that there will be continued movement in the marketplace throughout 2024.

As interest rates hopefully begin to drop in the Spring and the associated cost of money and debt reduces, I would expect that towards the end of the year, that we will begin to see an uptick in the number of new investments being made. I see a ‘virtuous circle’ opening, where companies are better able to afford debt because of lower interest rates, money begins to return to funds through increased M&A, and the IPO window slowly reopens, further fuelling confidence in the market, raising company valuations, and encouraging further investment. I see this increased investment and growth continuing into 2025 – along with a significant spike in recruitment, and demand for talent in the sector of course!