Biotech & Pharma Whining About Talent: That Makes Me Mad

2/18/13Follow @xconomy

Pharmaceutical and biotech companies axed something like 150,000 workers from 2009 through 2012. Now guess what? Those same companies are complaining, in a recent report from the consulting firm PwC, that they are unable to find enough qualified workers to fill key positions they need to grow.

Sometimes, you come across a message in one of these consultant-driven reports that’s so shortsighted, tone deaf, and corrosive that it screams out to be challenged.

This “skills mismatch,” which we often hear is hindering the competitiveness of the U.S. information technology sector, is apparently just as bad in life sciences, if you believe this survey. Of 19 different industries that PwC polled, life sciences executives complained the most about what they see as a talent shortage. Only 28 percent of life science executives surveyed are “very confident” they can get access to top talent, while 72 percent say they plan to increase R&D capacity in the next year, according to the report.

Gimme a break.

This report goes on to describe how the people with traditional skills—chemistry, microbiology, etc.—don’t necessarily fit in the biotech and pharma industry’s new R&D models. As companies rely more heavily on partnerships with academic centers and contract research organizations to help with R&D, the industry has developed an increasing appetite for people with skills in managing outside partnerships and regulatory affairs. There also aren’t enough people to meet the needs in biomedical engineering, bioinformatics/data analysis, health economics/outcomes research, and systems biology, according to the PwC report.

To me, this report raised more questions than it answered. What is the industry doing to develop its own people to fill these jobs? How much time and money is the industry investing in people’s education, at the high school, community college, and college level? Why can’t at least some of these 150,000 axed people fit into the current openings? Is this part of some lobbying push to get Congress to allow more H1-B worker visas, so that more skilled foreigners can come to the U.S. and do these jobs for lower wages? Does the industry hope that stories like this will put pressure on governments to invest more in workforce development, so they don’t have to spend the money themselves? Or has the industry become such a pressure cooker that there’s no longer any room for companies to roll the dice on promising newcomers, and let them learn and grow on the job?

It should be noted that about 60 percent of those executives surveyed by PwC say they expect to increase their investments in workforce training over the next three years to create a more skilled workforce. I find this figure hard to believe. As someone who covers the news on a daily basis, and organizes industry networking events in various biotech hubs around the U.S., I am regularly confronted with smart, experienced, hardworking people who are unemployed or underemployed, and who are constantly looking for a little insight on where they can find gainful employment in their local markets. If you ask these people about workforce training and development opportunities, they’ll tell you there aren’t many.

If you look around the Web, these folks are easy to find. Like me, Derek Lowe, the chemist who writes the popular “In the Pipeline” blog, was also irked by the ‘oh-woe-is-us-we-can’t-find-enough-skilled-people’ message in the PwC report. When this report came out, that a majority of industry executives say hiring has become “increasingly difficult,” Lowe wrote the following:

“Well, now. One’s first impulse is to refer, with deep feeling, to bovine waste products, but one mustn’t jump to conclusions about whether the industry might just possibly have heaved too many people over the side over the last ten years or so.”

One of the commenters on Lowe’s post, who called himself “David Formerly Known as a Chemist,” offered a comment that was right on the money. He wrote:

“I believe the fact this report is exposing is the unwillingness of companies to invest in developing people. There are specific skill sets such as regulatory affairs, alliance management, etc that are not learned in a classroom environment but are acquired on the job. Companies are looking for these skills but only want to hire people that already have experience in these areas, ignoring the simple fact that a very smart person (i.e. layed-off [sic] scientist) could easily be trained in these skills. But companies aren’t open to these investments, they want to hire someone that will “hit the ground running.” I agree there’s probably a talent shortage, but industry needs to take it upon themselves to grow their own talent. The current approach is lazy and shortsighted. Imagine the loyalty you would foster by hiring smart people and training them in new skills, then treating them like valued employees! But alas, this is a management philosophy that’s gone the way of phrenology and powdered wigs.”

I understand that biotech companies are under a lot of pressure to cut costs, and show investors the results of their work. Many of these companies don’t have the luxury of time or resources to do serious workforce development. But firing tens of thousands of people and then claiming a shortage of skilled workers? C’mon.

After reading this report, I felt compelled to follow up with a regular Xconomy reader who I’d characterize as smart, experienced, hardworking, positive, and—last time I checked—jobless. His name is Steve Richards, and he’s a medicinal chemist by training. Back in 2010, he got more than 18 months’ notice that his job at South San Francisco-based Exelixis (NASDAQ: EXEL) was going away, and had done all the right things in terms of networking and job hunting since. He still hadn’t found a full-time gig when we last spoke in September, although he had lined up a temp job at UCSF to help keep his skills sharp.

Steve Richards

When I called Richards on Friday, I was pleasantly surprised to hear some good news. He latched on with a new startup, South San Francisco-based Global Blood Therapeutics. He’s doing medicinal chemistry for drug discovery, work that’s right up his alley. “I’m working on small molecules, treatments for genetic blood disorders,” Richards says. “It’s exciting biology. It’s great to be back.”

I was heartened to hear that a Yale-trained medicinal chemist with a decade of experience can still find a job in pharmaceuticals even though it took a herculean effort. But not surprisingly, I found that Richards was similarly baffled by the sentiments expressed in the recent PwC report.

“As somebody who has been among the workers displaced from the industry because we were told we were unnecessary, to now hear people say ‘We can’t find enough people for this new R&D environment,’ it’s unsettling,” Richards says. “While many people will acknowledge there are a lot of people who have been disengaged from the industry, there aren’t a lot of mechanisms to re-engage these people.”

While companies vary in their policies—Richards says Exelixis was generous in its severance and outplacement services—there’s no doubt in my mind the industry could be doing much more to help its workforce gain the necessary skills of today and tomorrow.

I also have much suspicion about how much of a talent shortage really exists, or whether the companies are exaggerating their plight.

Another Xconomy reader I invited to stop by my office, Marie Beltran, was laid off last September from Seattle-based Dendreon (NASDAQ: DNDN) where she had a senior position in quality control for in vitro biology and biochemistry. She’s 48, and has a lot of experience, has taken some excellent courses from Shoreline (WA) Community College and the University of Washington. She has experience that’s usually in demand. But she knows quite a few people from Dendreon who were laid off more than 18 months ago, and still haven’t found biotech jobs in the local market. In December, she joined them in the ranks of the unemployed.

Marie Beltran

Beltran says she’s optimistic she’ll find something, but she has noticed that the few relevant openings she can find in the Seattle area tend to be for short-term contract gigs, not full-time jobs.

Part of the problem, Beltran says, is that many biotech companies are going so fast, so “pedal to the metal” on day-to-day tasks, that there’s just not much priority placed on long-term investments like workforce training and development. “I’d love, in a perfect world, to have time and funds available to readily grow individuals,” Beltran says. “To have people ask, ‘where do you see yourself five years from now’ and then allow people the time and resources to obtain those skills.”

I realize we don’t live in a perfect world. But if there’s a “skills mismatch” in the biotech and pharmaceutical industry, the industry has no one to blame but itself. Despite all their troubles, many pharma companies, and top biotechs, are sitting on billions of dollars in cash that’s just collecting interest. If the industry is serious about addressing a workforce problem, then it should start investing more in its own people, and maybe a little less in the next shareholder dividend.

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  • Hans

    Luke, perfectly said. I would like to add two things:

    Scientists (and engineers for that matter) drive on being challenged doing something “new” Therefore learning something different is right up their alley. Why not take advantage of their inherent motivation and fill the so-called skill gap; something which has been done in the past frequently.

    In almost every case when hiring somebody who “hits the ground running” we got an average and mediocre work output shortly after the new hire started working. I always attributed this to a lack of motivation and new challenges (see above).

    • http://www.facebook.com/aarthy Aarthy Vallur

      Well said!

  • Ellen Clark

    I am so glad you wrote this. I too felt outrage when I read the report. As a recruiter in the pharma & biotech arena, I hear from countless highly educated and motivated unemployed scientists. They were brutally cut from their jobs and have had a difficult time finding new work. This report was insulting to them. I also do not believe there is a shortage and that biotech executives can’t find workers. I certainly haven’t had a deluge of new searches. I have been recruiting in the space for almost 20 years and I believe we are still in a bottom for the hiring market. It is slowly coming back, but it is certainly not an environment where companies were all chasing the same few people like in the early 2000′s. The cycle comes and goes but it isn’t back to the hectic golden recruiting days of “too many searches” for a recruiter to handle. Sigh, those were the days.

  • Andrew Derksen

    In my own bitter personal experience, I would suggest that most of the biotech industry is doing very little to support folks already on the inside and is looking to hire “off the shelf” talent that comes preinstalled with the prerequisite knowledge, skills, and contacts to do the job. Most of these companies are operating on the razor’s edge of solvency, and do not seem to be willing (or can afford) to spend the time developing new talent. It can be expensive to train, and those contacts within regulatory agencies and familiarity with the basic procedures can be priceless when guiding a compound through the hurdles on their way to market. The ability to shave a month or two off of the schedule merely by knowing the right person to call within a bureaucracy to move the paperwork along can be critical.
    I made the involuntary transition over to agriculture, a field where I am gradually picking up the regulatory contacts and skills that I would have needed at my old position in pharma – but it is still an industry aside. I know that I lack the specific skillset and contact list that any pharma would be interested in. Worse, my recent resume looks more like agrobusiness than it does like the pharma that I would like to pursue, and unless I break past the HR department’s automated screening services to interview, my familiarity with the industry may not quite reveal itself.

    While I certainly know of some individuals who have successfully transitioned from the discovery phase to regulatory, marketing skills seem to be increasingly important when compared to scientific awareness. I worry that this is a bad trend for the industry as a whole. While the former may be profitable, the latter is more sustainable – and helps when all of the smoke and mirrors surrounding your project come crashing down. If you are clever, you can sell anything no matter how bad the data looks – but only a product that actually performs as advertised will save you from the inevitable lawsuits.

  • On the Hiring Fringe

    Luke, I am glad you have raised this issue. I am in the same boat as many others. I found it infuriating to hear local biotech CEOs state, “they had to import talent as there was none here,’ (in Seattle). Really?

    Hiring has changed substantially past few years – resumes are reviewed by computers for the “right fit” – but how is anyone to know how they are programmed? Age seems to be a big cut-off. – Over 40′ish? Good luck. There is a perception that we “older workers” are too expensive, too hard to train, cost too much in benefits and that we must be losers because we haven’t made it to CEO by age 42.

    Let’s use some of those resources for PEOPLE to review resumes and CVs. Let’s use PEOPLE to cull out the right candidates for a position. And then let’s hire the RIGHT PERSON because he/she truly is the right person, not merely breathing when there is an opening.

  • http://www.xconomy.com/ Luke Timmerman

    Thanks for all the comments. I’m going to keep an eye on whether we see more reports of a talent shortage or “skills mismatch” in biotech/pharma

  • http://twitter.com/darwinwoodka Darwin Woodka

    We’ve got a brand new USCD biochem grad in the house just waiting to be hired. Call him maybe? Companies have to stop whining and HIRE.

  • Naruto

    I am in total agreement with this article. I’m a clinical programmer by trade that involves the generation of clinical trial reports that are submitted to the FDA. When I first came out of college in the late 90′s, I was fortunate enough to be able to get a job at a biotech consulting firm that trained all their new hirees straight out of school. Actually that was the trend during the internet boom back then, companies had loads of money to spend and were willing to train their staff. Zoom forward to today and these same biotech companies do not train junior staff (actually there are no junior staff these days!) anymore and only want programmers to already possess all these skills. These skills are not taught in college so the conundrum is that there is a dwindling pool of clinical programmers that actually have the experience required for the position. Subsequently I’ve found many clinical programmers who started their careers in the early 2000′s much weaker than their counterparts who had been programming earlier in the 90′s largely due to the lack of training for the newer generation of programmers. Companies need to understand, experienced people do not grow on trees.

  • http://www.facebook.com/bruno.kelpsas Bruno Kelpsas

    Luke (et al): Thanks for posting this and responding. America does not have a skills mis-match. Corporations have an expectation mis-match! Americans are willing and able to do the job.

  • NucleusResearchHP

    I agree. I’m not in pharma, but have a biochem background. In my world, enterprise tech, I’ve moved from being a DBA to managing landline telco to wireless telco to social networking platforms to being an industry analyst for Big Data and advanced visualization. But I’ve been lucky enough to get training at a couple of these ground floor opportunities to move from a landline/database world to a wireless/Big Data world.

    Companies have to realize that there’s no “training” course for new business opportunities and you’ve got to continue providing employees with opportunities to upgrade their skills or to gain visibility into emerging business areas. Investing 10 years in an employee and allowing their skills to become obsolescent is a horrible business strategy.

  • http://www.yamanoor.com/ Yamanoor Srihari

    People on H1-B also get axed, so that theory only holds so much water. Plus, not all of us on H1-B prefer to be paid cheaply either. Moreover, there are labor laws that prevent you from underpaying visa holders. I expect some low life companies to do this, but bigger companies simply cannot pay below the legal minimum.

    On to other reasons, among many other things, people always expect bad news, to believe in it and subscribe in it. Companies like PwC that are inherently worthless, draft surveys, that makes these golf-playing lala-land executives (you should really survey who the respondents are, and it is not too hard for Xconomy to run its own, meaningful survey should it really be interested in finding the truth) think that yes, well, the reason they are failing miserably is not the patent cliff or its impending arrival being known for years, but indeed it is those lab-rats that didn’t come up with miracles, being paid 55K a year.

    Using my own job search in the device industry as a silo, I can tell you, from personal experience, that there is an avaricious greed to identify miracle workers who can do 10 things, will expect a low salary, a pittance for a vacation, no profit sharing and still provide them with non-PMA, 510-K products that will be approved in six months so the CEO can buy that house in Los Altos. Well, reality…

    Another thing Xconomy folks can do, is create a “pretend” resume, apply for jobs and interview, especially with the more entrenched life science companies. You will be amazed at how conservative I am being in what I just said above…

  • Marie G. Beltran

    Enjoyed my conversation with you, reading the article and the discussion triggered so far. Any QC/GMP opportunities in the Seattle, WA area, feel free to contact me via LinkedIn.

  • MSinRA

    Hi Luke,
    Thank you so much for writing this incredible article. I received my Masters of
    Science Degree from Northeastern University in Regulatory Affairs for Drugs,
    Biologics, and Medical Devices. I
    earned my Bachelor of Science Degree from Bridgewater State University in Molecular Biology and I am finding it difficult to get a job in regulatory affairs. Most companies wants someone that have written and defended 510ks or similar FDA submissions. I am still looking for a job in RA cuma@ureach.com

  • Ann Michals

    You’ve opened a conversation that we need to have. We know there are programmers available, its a matter of either adding skills, or overcoming location issues, or possibly even simply improving the resume screening process. These issues are addressable. Tech companies interact with their customers virtually, surely they can find a way to reach the many programmers available in places like Boulder, Austin, Boston and California.

  • R&DiZ

    The issue is management and pressure for success. Managers don’t want to invest in people because market does’t give you a reward for that investment. It’s become a short-term game. Your company is as good as its bottom line is.

  • LetsMoveForward

    Bless you for telling the truth. How can we entice students to go into STEM careers when this is the current reality?? My daughter (26 yrs old) with degrees in biochemistry given up and moved on to free lance web design.

  • stumpytarheel

    Amen.

  • http://twitter.com/DaveAlioims David Howe

    Luke,
    Great article and right on. Biotech and Pharma companies seem to be very short-sighted in their attempts to utilize their talent. I believe that the woes from the industry may be in some part due to companies not developing skill sets to match the problems that they are encountering. The lack of innovation in pharma R&D is not due to the shedding of jobs, but from a lack of initially investing in the people in the trenches trying to solve scientific challenges.

  • BayChemist

    I think one thing that people fail to address is the incompetence of the human resource departments at the majority of biotech companies. There are plenty of strong scientists out there with job skills. However, most scientists seem to have issues getting their resumes past HR departments.

    The fact of the matter is that most recruiters in the biotech space lack any formal scientific training. If I had a dollar for every time I had to explain the meanings of acronyms such as HPLC (which is a standard technique in biotech and pharmaceuticals) to a recruiter, I’d be a rich man. Scientific staffing and HR requires knowledge of the sciences they are staffing, otherwise yes, they are going to have a rough time finding qualified applicants, because they don’t understand people’s skill sets on a resume. They are merely searching for key words, and not interested in the content of the science most people perform.

    • anony.mouse

      Agree. Also, another *huge* problem is the use of this bullshit system called Taleo. I am about to complete my Ph.D. in computational biology, and have been applying for around 6 months now.

      I interviewed with 6 big pharma companies, and ended up getting a couple of good offers. The hilarious thing is that *ALL* of these companies rejected me through their Taleo online portal (I got an email). Apparently all of the applications are either scanned through an algorithm or reviewed by an HR monkey. Pharma companies, take a hint from Google! If they (being the kings of machine learning) do not have an automated screening system, you sure as hell should not!!

      For applicants, my advice would be to not waste any time applying online. Aggressively ask around for contacts at your target company, and start sending emails.

  • Nolucko

    Thanks for a great article. Spot on.

    I was a PhD medicinal chemist with 20 years experience before I was axed 2 years ago. I have had no luck in finding new employment, and I have tried everything from medicinal chemist, to scientific writer, to lab instructor. Nobody wants someone my age when they can simply hire a a person fresh out of school and pay them less and get more docile employees. Universities are producing way too many science graduates, in my opinion, and the US is allowing way to many scientists to come into the country and work on visas. With a glut of unemployed and under-employed scientists in the US, I think it is almost criminal to keep producing new ones, from universities and from immigration.

  • Onorato

    This article is painful to read, but too true. However, there is another thing to consider. I think part of the reason companies are unwilling to invest in their own people to have “the necessary skills of tomorrow” is that they want to buy their experience and dump it out on the job market if the vision does not pan out. I believe that for a lot of the companies that are unable to have loyalty to their own future employees, it is far better to buy the perfect employee on the open market, like some sort of vendor with benefits. It’s far cheaper to hire someone who already has the skills you search for when the time comes to dump them. Much more expensive indeed is to hire someone who comes close, train them, then dump them after spending the time and money to train. Makes you wonder if the expensive college degree is even worth the work when it gets replaced with a new latest and greatest work arena.

  • MSinRA
  • Richard Gayle

    Self-reporting polls are revealing, not because they are right but because they reflect what people think. I believe when the word employee is mentioned CEOs all too often think of some sort of miracle worker who will solve all their problems while finding new areas to explore – kind of like how they view themselves, only younger and paid less.

    Like some sort of misguided Lake Wobegon, they want all their employees to be in the top 0.1%. Since in the real world, the average employee is average, the CEOs are constantly disappointed in the quality of their workers. They naturally focus on untested youngsters who still hold out the promise of being a miracle worker. Yet they continue to be disappointed..

    Any trained scientist knows what is happening here – confirmation bias is driving the thinking of CEOs, meaning that they are missing huge numbers of people who could make a real difference, who actually might have the skills to be miracle workers. The extraordinary CEOs that recognize this bias will reap real benefits.

    The other CEOs will continue to demonstrate that, instead of being so extraordinary, they are themselves simply average.

  • Erik Nilsson

    The choice isn’t really between retraining chemists (say) as programmers or hiring foreign workers. The question is whether specific work will be done by foreigners in the US, or in foreign countries. Wishing companies to invest more than they already do won’t make them do it. There is a global market for talent, and if we make it impossible to assemble the team in the US, then jobs that would have been held by US citizens will go somewhere else.

    Can you retrain chemists as programmers? Sure. I know one exceptional chemist who over the course of about ten years managed to reinvent himself as a programmer. But nobody can hire with a lead time of ten years, even if you could be sure of the outcome. Most retraining just isn’t going to get done by companies because companies can’t really do most of the training that isn’t getting done now.

    Do we need to invest more in the people who are already here? Sure.

    But our economy, like all modern economies, needs some people from elsewhere to thrive. However many people are here, everyone here should be treated decently, and should be given the chance to contribute as much as they can.

  • mjh

    This article is spot on! There is not a shortage of highly-skilled life science workers, period! There is a shortage of biotech companies knowing how to appropriately evaluate employment candidates skills and experience. This incompetence (HR maybe, but ultimately the buck stops with upper management) needs to be injected into the national dialogue of STEM employment. From what I’ve observed regarding unemployed American workers that can fill current job openings, there should hardly be any H1B visas issued for employment in life sciences. Those jobs should be going to qualified Americans.

  • http://www.asktheheadhunter.com Nick Corcodilos

    The job board craze and the insanity of “applicant tracking systems” has now become the conventional wisdom in the C-suite and the board room. We used to talk about people: chemists, biologists, scientists. Then HR started talking about “human resources,” and more recently about “assets.” A worker (at any level) is “talent.” But this game has now pushed even top executives into an incredibly reductionist view of recruiting and hiring: It’s all about database records. Renting them, buying them, searching them, filtering them, subjecting them to algorithms.

    And the databases promise perfect hires, if HR will just search the records long enough and if managers will just wait patiently. Meanwhile, important work goes undone, and fantasies of “perfect candidates” yield complaints of talent shortages.

    Take a look at Peter Cappelli’s “Why Good People Cant’ Get Hired” (Wharton Digital Press). It’s a small book about simple surveys that reveal there is no talent shortage except among HR executives and C-suite execs who now rely almost entirely on algorithms and keywords to find the people they need to hire. Cappelli reveals that these databases don’t work.

    The solution is simple: It’s time for HR to get out of the recruiting and hiring business, and it’s time for unit managers to take over the function they never should have given up. Good luck to the board of directors that is waiting for HR to identify, screen, and recruit biotech professionals from luckless databases that suck up virtually every dollar out of corporate recruiting budgets.

    More here, in my recent PBS NewsHour column:
    Ask The Headhunter: The Talent Shortage
    Myth and Why HR Should Get Out of the Hiring Business
    http://www.pbs.org/newshour/businessdesk/2013/04/ask-the-headhunter-the-talent.html

  • waitingforgodot

    Thanks for providing this piece on the pharmaceutical companies and their continuing spiral into excess and greed… I’ve been watching this spectacle from the sidelines for the last 18 months and find my job search a constant source of frustration due to the paradoxical aspects of their expectations and the associated pay scales…
    When they say that they can’t find the “talent” they need in the US 2 things come to mind. One is related to this comment “There is a global market for talent, and if we make it impossible to
    assemble the team in the US, then jobs that would have been held by US
    citizens will go somewhere else.” It’s not that it’s impossible; rather it’s impossible for the compensation they’re willing to provide. That is why off shore is better in their broken down view of the “talent pool.” The second thing that is really alarming is the job descriptions that some of the pharma companies are coming up with. It appears that they are again trying to reduce their cost of employees (and justifying their preference to go off shore) by creating job descriptions that seem to be for “super employees.” These are written in such a way that you would need to have had 3 or 4 careers during the course of your employed life to minimally meet their requirements. I won’t go on to list examples here, they are readily available on line. And the additional paradox here is the fact that you would be more likely to be near retirement if there were the slightest chance of your meeting their requirements, yet if you’re over 40, they’re not interested. So, paradox upon paradox. They whine and we search for meaningful employment.