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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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February 6, 2013

Trouble Hiring Whom, Exactly?

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Posted by Derek

Here's a report on employment in the biopharma industry that will cause some pretty strong emotions in those of us who (still) work there. PriceWaterhouseCoopers (PwC), in their annual CEO survey finds (here's the good news) that:

Nearly three-quarters (72 percent) of executives said their organizations are looking to increase R&D capacity over the next 12 months, and six in 10 intend to increase investments over the next three years to create a more skilled workforce.

So far, so good. But would you like to know what the executives said was one of the biggest problem in doing all this? Honestly, you'll never guess:

The knowledge-intensive pharmaceutical industry had the highest reported difficulty in hiring top talent of the 19 industries featured in PwC's 2012 Global CEO Survey. CEOs identified talent gaps as one of the biggest threats to future growth prospects.

Research conducted by HRI, including a survey of human resource and R&D executives at U.S. biopharmaceutical companies found (that) fifty-one percent of industry executives report that hiring has become increasingly difficult and only 28 percent feel very confident they will have access to top talent.

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. As Pharmalot points out, the people that are allegedly being sought are not always the ones that have already been ditched:

Of course, the workplace is not stagnant and the demand for certain skills is always evolving. Seen this way, the data suggest that pharma execs may want the sort of talent that is not on the sidelines or simply clamoring for a different opportunity. For instance, 34 percent say that developing and managing outside partnerships is the most important skill being sought among scientists. . .

Now, that one I can believe. An uncharitable summary of many of those outside partnership managerial positions would be "Keep track of what all the cheap overseas contract workers are doing". And there is indeed a demand for that relatively thankless task. Another task that appears to be strongly in demand is for scientists who can deal with regulatory affairs. Fine. But what about actual research, not actually in China or beyond? There are possibilities, but things still don't look so good if you're a chemist. Pharmalot again:

As for job growth among scientists, not surprisingly there is only a 4 percent increase forecast for chemists, who were thrown overboard in large masses in recent years, and 13 percent for microbiologists. Conversely, a 62 percent boost is predicted for biomedical engineers and 36 percent for medical scientists. Biochemists and biophysicists trail at 31 percent.

PwC seems to be taking a broad view of biopharma if "biomedical engineers" are the top category. That's a flexible-sounding category, but I'd guess medical devices, at the very least. "Medical scientists" is also the label on a rather large bin, and this gives only a fuzzy picture of where the hiring will supposedly be taking place.

Looking through the PwC material, you can tell that it's addressed largely to HR folks, trying to gear them up for all this talent-searching and position-filling. It spends, for example, some time sharing sympathy for the HR departments who don't, somehow, feel as if they're key parts of the organization on the front lines of discovery. (Which they aren't, usually, but that's another story). But there's some useful advice for them in there, too - see what you make of this:

Scientists want career paths that recognize and reward their passion and commitment to research, not just additional responsibilities. Too often, scientists are pushed out of what they do best – research -- and saddled with management chores that distract them.

Finally, senior executives must act as a powerful motivating force for their people. Companies with decades-long legacies have lost their edge due to repeated layoffs, wearing down the morale of scientific staff.

Ain't that the truth. But how many senior executives are in a position to act as a "powerful motivating force"? Well, OK, some of them have been, but with a negative sign in front, which isn't the idea. In many organizations, the sorts of behavior that the scientists would find motivating on the part of a top-level manager are often not the sorts of behavior that lead people into top managerial positions. So you get people who are, at the very least, rusty on those skills (if they ever had them in the first place). And that leads to things like (in my own experience, some years ago) hearing a high-level guy exhort various research teams while mispronouncing the names of some of their projects. Which neither bred confidence, nor raised morale.

Overall, I find this PwC report irritating, perhaps because of its HR-centric worldview. And the message of "Shortage of top talent!" is rather hard to take, no matter how you spin it. It also brings thoughts of the perennial "America's critical lack of scientists" headlines, which have only slightly abated. I'm waiting for someone to tie those two together into one annoying headline. . .

Note: I'll get back to that out-of-the-science-and-into-the-management topic again; it's come up here before, but it's an important one.

Comments (44) + TrackBacks (0) | Category: Business and Markets


1. imatter on February 6, 2013 9:05 AM writes...

How about out of science and into HR?

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2. Frank Adrian on February 6, 2013 9:35 AM writes...

Same thing that's been happening in the software industry for the past twenty-plus years. The inability to find "top talent" simply means that you can't hire who you want for what you want to pay. If the companies dealt with this by playing honestly and paying what the market will bear vis a vis the local market, you'd see wages in the segment go up as unemployment goes down. Instead, this is used as an argument to promote outsourcing and use of H1-B and L-1 workers.

And where do you think those who need to manage these overseas workers will come from? If you no longer hire entry-level scientists to work (read train) here, in a couple decades you won't even have people here who know enough to manage your overseas workforce. Oh well, I guess we can have our H1-B's and L-1's report to management.

But the real issue is lack of STEM education and training here in the US, right? Riiiight...

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3. lemon_farmer on February 6, 2013 9:37 AM writes...

The business people live in a world where they are the ones planting the seeds of innovation by organizing research teams, and that their tending of the groves through strategic project meetings and progress reports is what somehow makes the trees bear ripe and juicy new product fruit. In reality the only thing that grows on these trees is the aforementioned bovine waste product.
Then when things go badly they give the scientists a set of pruning shears to make it better when what they really need is a chainsaw. At this point the lamenting begins about the lack of good scientists and the researchers end up taking the fall for not being innovative enough.

Hooray for progress!

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4. Fred on February 6, 2013 9:38 AM writes...

I think the PwC report is trying to focus on the changing dynamics of pharma R&D (for better or worse) and the associated talent requirements for managing the new "externalized R&D" approach. The key quotes from the report regarding this:

"Developing and managing outside partnerships and regulatory science are the two most sought-after skills today"

"So companies are changing how they conduct R&D, not only reconfiguring existing operations, such as an increasing focus on biologics, but also looking outside for promising new alliances that will help boost capabilities and replenish the pipeline more rapidly. Partnerships with academic medical centers (AMCs) and third parties, such as contract research organizations (CROs), are the two most common, aside from government contracts.

In the new pressure-cooker environment, traditional competitors are teaming up to tackle shared R&D challenges. Consortiums, alliances with foundations, and even crowdsourcing are among the new approaches. Done well, these relationships complement in-house R&D and allow companies to share both risk and reward with external partners."

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5. Roger Frechette on February 6, 2013 9:53 AM writes...

When I started in this business in the late 80's Pharma execs often appeared in a near panic regarding the crisis in finding qualified scientists - apparently meaning that the many of thousands of recent graduates (MS and/or PhD) whose adviser was not one of the top few academic superstars at the time - think Corey, Danishefsky, Trost, Evans, etc. - were basically poorly qualified and likely could not be brought up to speed... The current crisis seems to be somewhat more irritating though - given the legions of laid off scientists in the industry today. Posted position descriptions are getting more ridiculously detailed and specific than ever; and the most important criterion for candidacy seems to be the invisible check box - "must already be employed".

The overseas thing is yet another matter - would be interesting to see some real data on what shipping science overseas really costs (including all related expenses, not just FTE rates) and what sorts of actual productivity gains have been achieved over time.

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6. Vince Mulhollon on February 6, 2013 10:11 AM writes...

"only 28 percent feel very confident they will have access to top talent."

They need to talk to a mathematician. Even at the most optimistic perfect distribution, the 28th percentile company is going to be stuck with the 28th percentile talent and not any better. At 28 percent you can't even argue top quintile or quartile of companies/talent, you have to be using "top" as in "top third". It shows the staggering level of unemployment in the field that a middling company believes they stand any chance at all of hiring a proven rock star.

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7. emjeff on February 6, 2013 10:19 AM writes...

Irritating, indeed. The argument is ridiculous.

I am trying to understand what purpose this paper serves. It clearly can not be true, so what is motivating the lie? Is it lower wages?

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8. MIMD on February 6, 2013 10:23 AM writes...

"fifty-one percent of industry executives report that hiring has become increasingly difficult and only 28 percent feel very confident they will have access to top talent."

This is bovine fecal matter.

What they mean, is, cheap and "tram player" (i.e., meek, never talks back) talent.

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9. MIMD on February 6, 2013 10:25 AM writes...

"team player" that is.

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10. David Formerly Known as a Chemist on February 6, 2013 10:29 AM writes...

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 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.

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11. Anonymous on February 6, 2013 10:34 AM writes...

@Roger Frechette "and the most important criterion for candidacy seems to be the invisible check box - "must already be employed"."

I have found this at my company as well. We are desperate for PhD level scientists to build out an entire group, but management has been way too picky to hire anyone yet (for almost a year now!). I've mentioned to HR to not count out someone who's been laid off, as I've been there before and have known excellent chemists in that category. That has apparently fallen on deaf ears. We only get candidates currently employed, who are known to us through networking. It's frustrating because I know there are so many people out there available, qualified, etc., yet our labs remain empty.

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12. MIMD on February 6, 2013 10:35 AM writes...

Re: the mass layoffs themselves.

Can you say: "Mismanagement?"

As I once pointed out, management in the absence of domain expertise in this industry is, in fact, mismanagement.

See "Pfizer/Wyeth Merger And Sacrificing The Future: Laying Off Scientific Staff All Over The Place”

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13. MIMD on February 6, 2013 10:43 AM writes...

#10. David Formerly Known as a Chemist

Management (especially those lacking real biomedical credentials) abhors 'smart' people. Jealousy, fear, and other base emotions.

If they can even recognize "smart" - see the 1999 article by Dunning-Kruger entitled "Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments" (google it, fulltext is available online)

You are correct about the "shortsightedness" - it is another manifestation of mismanagement.

Actually, the mismanagement has occurred at both ends of the "talent pipeline."

The wrong people get laid off; similarly, the wrong people are retained. And the right people are not hired.

The HR people I knew could not have hired an Albert Einstein. I had to always work around them to get decent candidates; they largely served as a sieve against good incoming CV's!

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14. MIMD on February 6, 2013 10:47 AM writes...

#11 Annoymous

We only get candidates currently employed, who are known to us through networking.

That's because HR/management are just plain stupid and timid to actually try to evaluate an "unknown."

Likewise, the mismanagement errors that led to the "unemployed" status from Company "A" are propagated by the idiotic biases against the unemployed, by HR and hiring managers at Company B!

Can you say "Confederacy of Dunces?"

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15. CMCguy on February 6, 2013 11:33 AM writes...

There are some really good comments so far and particularly agree with #2 FA and others about translation of MGMT speak means really seeking cheap labor (to do highly skilled work). Also concur with #10 DFKAC regarding lack of development.

My current position can be pretty much be described as "Developing and managing outside partnerships and regulatory science" however I do not feel secure in the current environment as would be considered "over-qualified" due to years it has taken me to acquire skill set (nor really wish to return to a (disfunctional) Big Pharma). If there is not good R&D at the foundation then there is nothing really to out-source, partner or move to a regulated stage. Pharma has become so mission fragmented with a loss of focus and although the science can not be done in a vacuum to discover and develop a drug at least has to be a core part of the business. There seems to be fewer and fewer places that people can be trained adequately to really understand and attempt to learn how to manage the complex process involved as most only see the surface and not in-depth experience resulting in false confidence and ability to be effective.

The R&D players can not be absolved of responsibility for the current state of Industry however the lack of leadership and willingness to take the longer view by MGMT (I believe largely misguided MBA syndrome) has done the most damage. And when it comes to motivation MGMT and HR does need to recognize typically R&D has different motivation paradigm from other parts of Pharma to reward appropriately.

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16. Chrispy on February 6, 2013 12:44 PM writes...

Well I, for one, hope this is true. I have certainly spent the last decade trying to convince people NOT to go to graduate school, at least as a career move. And certainly the job market in both industry and academia has shown this to be good advice. Get an MD or an MBA but steer clear of the PhD, kid!

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17. Anonymous academic on February 6, 2013 12:50 PM writes...

@emjeff: "what is motivating the lie? Is it lower wages?"

This has always been my assumption. It seems so obvious and transparently dishonest that I'm shocked to see a continual stream of news articles repeating the lie, both with respect to pharma/biotech and also IT. It's deeply unsettling to me, because I strongly believe that a) scientists in other countries should have just as much of a right to compete for these jobs as Americans (or Europeans), and b) there is probably no avoiding lower salaries in the long term, given the intense competition from developing markets. But it makes my blood boil when American CEOs - who of course will be the last to see their salaries reduced or their jobs outsourced - use their bully pulpit to push policies which have no other purpose than screwing American workers.

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18. Baffled on February 6, 2013 1:26 PM writes...

The idea that there aren't enough qualified applicants is absurd; I know many excellent folks looking for a position.

I graduated from a top five school just over three years ago, was fortunate to be one of a just a few of my very talented and enthusiastic classmates to find a position in industry that year. The position was at a medium-sized biotech. I have since been laid off due after negative trial data and it seems that that's it: University, graduate school, industry for three years and now I'm out of luck. I've been looking for a new position for over six months.

@5 and @11, I completely agree with your sentiments. I have seen companies post for the same position for many months at a time; I believe it would be very straightforward to find qualified people in this market. I had always heard it's easier to get a job when you already have one, but I never imagined the stigma that is associated with having been laid off.

There is no apparent future in chemistry for me...I guess it's because I'm not qualified.

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19. Anonymous on February 6, 2013 2:14 PM writes...

"I never imagined the stigma that is associated with having been laid off"

There is no stigma. Psychopathic MBAs and they ass-kissing lackeys in HR may behave as if there is, but their behaviour does not have to dictate how scientists such as you or I perceive the world.

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20. Chemjobber on February 6, 2013 2:27 PM writes...

Baffled -- feel free to e-mail me. No promises, but I'd like to help. chemjobber -at- gmail/dot/com

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21. Jim on February 6, 2013 2:29 PM writes...

Good comments so far. I think there's another underlying issue at work here as well, and it's mentioned in the report - HR. I don't think "talent gap" is due to the talent not being out there (I completely reject that notion). Instead, I think HR has been reduced to complete incompetence due to the fact that the new electronic systems eliminate resumes of candidates that are actually qualified simply because they don't have the right keywords on their application. I have a friend in HR in another field and he hates the electronic systems that screen candidates. Hiring managers say the same thing. So my advice is that if you've ever sent a compound out to NovaScreen or off for PK, I'd make sure that you state somewhere that you've "managed outside partnerships".

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22. The Aqueous Layer on February 6, 2013 2:35 PM writes...

I believe the fact this report is exposing is the unwillingness of companies to invest in developing people.

Hit the nail on the head with this comment.

I also think that HR uses the excuse that they'd be taking a chance on training someone who would jump ship the minute something in their related field popped up.

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23. Wile E. Coyote, genius on February 6, 2013 2:36 PM writes...

@21: I wouldn't say it was incompetence on the part of HR due to the electronic systems. I'd just says it's incompetence. There is a saying: You can't spell horrible without "HR". My first job, they lost my written offer and never sent it out. Thankfully I had been in constant communication with the hiring scientist. For my second job when I showed up to fill out that first day paperwork, the didn't have one of the necessary IRS forms. They told me they were sorry they didn't have it and that I could go download it myself. Love that big corporate HR.

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24. Jim on February 6, 2013 2:46 PM writes...

@23: Yeah, but I bet they could set up a great team-building exercise... I just think that the new electronic systems have hurt a lot of good people in ways that people aren't even aware of.

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25. Peter El