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.
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.
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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