The Nature of the Labor Shortage
While a slowed growth in the biotech labor pool may be one explanation for the ongoing labor shortage, the labor force is still expanding at higher rates than other occupations.
- In the U.S., the number of workers engaging in life sciences research grew 79% in the last 20 years compared with 8% for all U.S. occupations (CBRE 2022).
- The EU also saw similar year-by-year growth of workers in life science research, with an average annual growth of 4.1% for other occupations (Haaf et al. 2021).
Therefore, despite a seemingly dramatic increase in the size of the biotech workforce, companies still struggle to find skilled workers to meet their needs, as evidenced by:
- Throughout the pandemic, Pfizer and Moderna struggled to hire skilled workers when they were trying to increase vaccine production (Young 2021).
- Emerging biotech hubs in the U.S., such as in St. Louis, have prompted an increased need for skilled workers to fill job openings at startup companies (Nicklaus 2022).
- Sectors requiring highly specialized skills have the greatest need for workers. For instance, companies in the advanced therapy manufacturing industry seek creative solutions to train the labor they need to continue operating (Raper 2022).
With the growth in the size of the biotech industry and the number of professionals entering the workforce, it seems strange at first that a biotech labor shortage exists. The data, however, suggests looking beyond these numbers to determine the origins of the ongoing labor shortage.
What Is Causing the Biotech Labor Shortage?
Looking beyond the general numbers, there are trends that better illustrate the labor shortage paradox. First, let’s examine where the biotech investments are going.
- Venture capital (VC): McKinsey reports that venture capital biotech funding is holding steady at $7.6 billion despite the ongoing biotech crisis (Leclerc 2022). The same report goes on to show that more than two-thirds of VC funding is going to startup companies touting platform technologies. These include cell-based therapeutics, next-generation gene therapies (e.g., RNA-based editing and CRISPR-Cas9), and precision medicine.
- Growth in market size: Multiple segments of the biotech industry are growing at a breakneck pace. In the next ten years, the market size of the personalized medicine industry is expected to double from $2.12 trillion to $5.7 trillion (BioSpace 2022). The RNA-based therapeutics industry is expected to grow even faster, with its market expected to increase from $4.93 billion to $25.12 billion by the end of the decade.
- Federal funding: Last year, the Biden administration proposed a$30 billion R&D investment as part of its $2 trillion spending plan, known as the Build Back Better Plan (Taylor 2021). While the plan has drawn criticism for its attempt to control prescription drug prices (Morse 2021), it does include federal grants to support growing the biomanufacturing workforce (Stening and Callahan 2021).
The large expansion in specialized markets within the biotech industry means that the skilled labor force must also have the requisite skills to propel the industry forward. These workers would require field-specific skills, particularly for the industries working in highly specialized areas, such as personalized therapy and RNA-based therapeutics.
- An Accenture report determined that 96% of the thought leaders working at biopharmaceutical companies believed that the ongoing labor shortage would not change anytime soon (Accenture 2022). Many of these same leaders highlighted the need for talent that the current labor force could not meet.
- A 2019 McKinsey Global Survey determined that 9 of 10 biotech executives and managers say their organizations either have or will face skill gaps in the next five years, with R&D and data analytics having the most significant skill gaps (McKinsey & Company 2020).
- Similar problems also arise in the EU, where cell and gene therapy manufacturers struggle to recruit workers with the necessary skills for producing specialized therapeutics (Chakraverty 2021).
The factors driving the current labor shortage are not just top-down. Personal factors can influence the jobs workers seek and are hired for.
- PhD graduates struggle to find work: PhD graduates seeking non-academic and non-R&D roles struggle with high barriers to entry (Ganapati and Ritchie 2021). PhD students remain unaware of career options and struggle to develop professional networks outside academia. These students also remain unaware of the transferrable skills they have for succeeding in the biotech industry (Hansen 2019).
- Gender and racial disparities persist in hiring: While women are beginning to account more equally in total employees, they only hold 10% of board positions in biotech companies (Liftstream 2017). Similar problems are present regarding racial disparities, particularly since minority groups continue to be underrepresented in executive biotech positions (Spinner 2022). Unaddressed gaps in diversity lead to lost innovation because they block the free flow of creative ideas (Phillips 2014).
These problems point to a labor pool that either does not have, is unaware of, or is unable to develop the requisite skills to work in the biotech industry.
Addressing the Labor Shortage: Short-Term Solutions
- Using contract research organizations (CROs): CROs are groups that support biotech companies as outsourced pharmaceutical services (PharmaIQ). CROs are valuable to smaller and mid-size biotech companies because they provide R&D services for companies that can’t afford to insource their medical research teams. If difficulties arise for startup companies looking to fund the lab space and equipment for conducting their research, they can look to CROs. In such cases, aligning CRO and biotech startup goals is vital to maximizing collaboration outcomes (Bleys et al. 2022). Startup firms should also conduct due diligence to identify the best CROs for their needs.
- Improving company recruitment efforts: Existing biotech companies also require robust human resources teams and labor structures to improve labor recruitment and retention. Even with more STEM graduates emerging each year, the average age of scientists continues to increase (Flaherty 2017). On the one hand, a robust recruitment process is vital for finding the kinds of workers who meet companies’ needs (Celidonio 2017). On the other hand, attracting the best workers also requires incentives. For instance, biotech companies should consider a robust benefits package that includes student loan repayment assistance (Stivala 2022).
- Ensuring the retention of existing employees: Employee turnover within the biotech industry is lower than in other sectors, but the past year has also seen increased employee turnover (Keown 2021). To minimize hiring and recruitment efforts, companies should ensure employees’ career development opportunities through awards, raises, and promotions (Fernández 2020). Companies should also foster an excellent company culture with a well-defined mission and values, workplace diversity, and strong, approachable leadership to provide meaning to their line of work (BayBridge).
Long-Term Solutions to the Labor Shortage
Short-term solutions are essential to recruit and retain labor now. However, long-term solutions that create a synergistic environment between educators, students, and employers require more effort to connect all three. Such solutions include:
- Expanding access to essential biotech skills: Many STEM graduates lack the essential lab skills they need to enter the biotech ecosystem. Biotech companies should look to sponsor educational programs that help students gain these skills, such as the University of Colorado Boulder’s Course-Based Undergraduate Research Experiences (CURE). These programs provide students with hands-on research experience during their undergraduate education. Biotech companies should also collaborate with government-funded organizations that aim to teach students essential biotech skills, such as the National Biotechnology Education Center’s InnovATEBIO. State and local governments should also consider adopting industry-recognized credentials for students, such as the Biotechnician Assistant Credentialing Exam (BACE), to demonstrate competence with essential laboratory skills on future resumes (Biotility 2020).
- Educating the biotech workforce on opportunities: Many students remain unaware of the numerous job opportunities that exist in the biotech sector. Biotech companies should ramp up their efforts to partner with educators by educating students about the plentiful and diverse job opportunities within the biotech industry (Runnion and Gibson 2018). For example, the European Institute of Innovation and Technology began PhD programs that provide continuous interactions with the industry (European Institute of Innovation & Technology 2014). Johnson & Johnson also developed JLABs, a global initiative that connects new biotech founders at PhD and post-doc levels with J&J resources to kickstart innovation (Johnson & Johnson). Developing diverse networking and growth opportunities ensures that educational programs continue to thrive.
- Promoting inclusivity in the workplace: Gender and racial disparities remain within the biotech industry. While women are beginning to account more equally in total employees, they still face obstacles in reaching the upper ranks in biotech companies (Estes 2022). Furthermore, minority groups remain underrepresented in executive biotech positions. Companies should look to ramp up efforts to help minority groups and women by enhancing accountability measures, providing pathways to executive roles, and providing support for becoming biotech leaders (Burks 2021).
The biotech industry has undergone sustained growth despite the persistent shortage of skilled labor across the globe. Short-term solutions provide startup companies with ways to train and keep an experienced workforce. But as Bryony Ruegg, Director of the Bio-Rad Explorer educational program, rightly notes, the entire biotech industry must work with the broader community to help train future workers. Through educational programs, partnerships, and internships, biotech companies can integrate themselves even more into the broader community. They can foster trust and admiration in a new generation of scientists and promote inclusion for traditionally underrepresented groups eager to work in biotech.
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