By Peter Kearney
The U.K. life sciences industry is burgeoning, thanks in part to the COVID-19 response, which demonstrated the importance of diagnostics and pathogen-related research, boosting investment in a range of sectors. The industry also benefits from a general commitment to science and technology on the part of the U.K. government. Prime Minister Rishi Sunak recently stated his ambition for the country to become a science and technology “superpower.”
However, at a time of unprecedented development, the industry also finds itself at the center of a skills shortage that threatens to stall its progress or even lower its trajectory.
From our experience as a global recruitment provider based in the U.K., it is evident this skills gap exists not only in early-career positions—with too few graduates with the right skill sets emerging from universities and apprenticeship programs—but also at the sharp end of the industry, where there is a critical lack of experienced scientists and engineers, as well as of senior executives with scientific backgrounds.
Pressures caused by COVID-19 have generated an unprecedented demand for talent. Aon’s Salary Increase and Turnover Study in 2021 indicated that 71% of life sciences companies were planning workforce expansions in the coming year, and that over a third of the companies wanted expansions of at least 15%.
The U.K. government collaborated with the life sciences industry through the Science Industry Partnership to publish a skills strategy document—the Life Sciences 2030 Skills Strategy report—which estimated that 133,000 extra life sciences jobs will need to be filled by 2030. Although the document was published in 2022, execution of the strategy is already in doubt. It appears that many life sciences companies are struggling with recruitment. In a recent survey of life sciences employers in the north of England, 45% reported being unable to find appropriately skilled applicants, with a further 30% saying there were too few applicants.
A survey of employers conducted by the Science Industry Partnership revealed that recruitment of experienced staff is the main skills challenge facing the life sciences industry, across all disciplines. In informatics, computational, mathematical, and statistical areas, at least 50% of respondents said that recruitment of experienced staff was a concern.
How the U.K. lost its shine
The migration of scientists from the U.K. to other countries might partly explain the shortage. In 2020, the U.K. experienced a net loss of 1,300 scientists, even though the country had been a net importer as recently as 2015, according to data from the Organization for Economic Cooperation and Development. At the same time, there has been an apparent drop in the number of scientists coming to the U.K. to work, both from the European Union and beyond.
Britain’s decision to exit the European Union—the move dubbed “Brexit”—may have discouraged scientists from working in the U.K. Last October, it was reported by several U.K. news outlets, including in the Guardian, that 22 of the country’s most senior scientists had decided to leave the U.K. because they feared Brexit-related funding cuts would occur.
In the U.K. as well as in countries of the European Union, the life sciences industry is bracing for fallout from the war in Ukraine. Adverse consequences the industry may suffer include worsening economic conditions, cyberattacks, and difficulties in carrying out clinical trials.
U.K.-specific challenges include a shortage of laboratory space in Oxford and Cambridge—cities that together with London form the so-called “golden triangle” of U.K. life sciences activity. Political upheaval in the U.K. was evident through the second half of 2022 (when there were three prime ministers in as many months), and it may remain a concern. A series of ongoing “fiscal fixes” enacted in an attempt to rebalance the U.K. economy—including a rise in the rate of Corporation Tax from 19 to 25%—may be encouraging investors to seek opportunities outside of the U.K.—discouraging scientists from commercializing their ideas with U.K.-based startups and spinouts.
Competition for talent
A lot of talented U.K. staff are attracted to the U.S., where salaries are higher and living costs, including housing, are generally lower. The shrinking talent pool in the U.K., combined with a fall in the value of sterling against the dollar, has made it more difficult for firms to recruit scientists at the most senior levels.
In the past decade, China has also become an attractive destination for scientists globally. The comparatively small market in the U.K. partially accounts for a disproportionate movement of labor to the U.S. and China. From 2005 to 2018, Europe accounted for just 16% of total cell and gene therapy patent registrations, compared with 28% in the U.S. and 56% in China. Less entrepreneurialism and venture capital in Europe, and more aversity to risk, are often cited as underlying causes of its comparatively small market share compared with the U.S.
U.K. life sciences companies are also losing talent with transferable skills—mostly in statistical and analytical roles—to other sectors that are able to meet their higher wage demands.
Attracting and keeping top candidates
Life sciences companies are doing all they can to recruit top talent for their most senior positions, including offering attractive, globally competitive remuneration and relocation packages and implementing flexible policies for remote work. Many are looking to implement more employee-focused practices and retention strategies, such as long-term incentive schemes.
Employees have also been able to command higher salaries. In the past year, clinical research associates and data scientists have seen average salaries rise by 13.7 and 11.9%, respectively, while those in more senior positions have seen wages rise by as much as 25%.
Companies of all sizes are now routinely offering six-figure salaries for senior people in medical diagnostics and life sciences, which are catching up with equivalent positions in the finance and information technology industries in the southeast of England.
With recent increases in inflation and in the cost of living, a growing number of companies are exploring creative financial packages for potential employees, in addition to competitive salaries. Many are opening up company ownership through shared equity schemes to attract talent and drive growth. Startups often lack the capital to match the salaries of more established firms. Offering equity to key senior employees can be an effective way for a startup to leverage its growth prospects and differentiate it from competitors.
Share ownership options include enterprise management incentive schemes, growth shares, ordinary shares, and unapproved option schemes that allow companies to offer tax advantages while improving employee retention and productivity.
Companies can also offer prospective employees clearer opportunities for career progression. Research consistently shows that life sciences professionals who move to new companies do so because they are attracted to new technologies, interesting projects, and opportunities for career progression. The least important reasons for them to move are generally for base pay and flexible working arrangements.
Experience, expertise, ethics, and knowledge all matter in the life sciences, and building a long-term career plan is important to people working in the sector. The most successful companies are those that communicate most clearly and understand what work their employees find most interesting and what suits their talents best, so the companies can set clear career goals for staff and identify the most suitable positions for them. With the wide diversity of disciplines that exist within the sector, employers also benefit from focusing less on the previous experience of potential recruits and more on their transferable skill sets.
The chances are that those employees who opt to stay with a company for a long time will be doing very different work in five years’ time than that for which they were recruited. The most important skills cited by several studies and publications as being important for life sciences professionals include research ethics, scientific peer communication, bioethics, time management, research project management, scientific knowledge, methods outside of their present research area, and awareness of industry trends. Those who are able to demonstrate a high level of proficiency in those areas would arguably be a stronger recruitment proposition for a firm than those whose main asset is a track record of experience in a particular silo or research discipline.
Keeping expertise in the U.K. and attracting it from abroad require a strategic effort. Finding and keeping the right talent remains the industry’s biggest challenge.
Peter Kearney is Chief Operating Officer at VirdisGroup, a global executive search company for the life sciences.