The four factors influencing the migration toward on-demand talent in the pharmaceutical industry.
Today’s economic volatility has forced many companies to re-evaluate their spending habits. As companies look to drive growth in an atmosphere of cost consciousness, they are increasingly willing to change how they acquire talent. In the life sciences industry, this trend is especially apparent. To accelerate revenue growth while reducing cost, innovative life sciences companies are adopting alternative approaches to finding, deploying, and compensating talent.
While changing preferences among consumers and suppliers of professional services is nothing new, this modern shift has signaled a new appetite for talent. This is influenced by economic, demographic, and technological factors, which are fundamentally changing how companies operate. More and more, life sciences companies, in mission-critical projects, are choosing to hire just-the-right talent for small-scale engagements versus hiring full-time talent.
While this trend has been steadily growing over the past decade, it has accelerated in recent years with no signs of slowing down. Why is this approach so attractive and why does it work so well in the life sciences industry? There are several factors influencing the migration towards on-demand talent.
The life sciences industry is particularly sensitive to cost management, a concern triggered by healthcare reform and economic pressures. This shift towards a la carte consumption can be attributed to two cost-conscious factors that are at play across every industry.
First, increasingly sophisticated procurement functions enable clients to more carefully monitor costs. Scrutiny and cost pressures force clients to critically evaluate spend on specialized talent. This often leads companies to decide that they are paying for features they don’t need. Second, engaging contracted specialists to execute modular work allows companies to avoid the increased cost associated with hiring permanent employees for temporary initiatives. A major pharmaceutical company executive recently told me, “For every employee we onboard in a given year, we now onboard five times the number of contractors.”
2. Highly-Specialized Talent is Hard to Find
A recent PriceWaterhouse Coopers survey found that 76 percent of pharmaceutical CEOs are concerned about the availability of key skills.1 As life sciences leaders look to drive growth without diluting their talent pool or breaking the bank, they are critically considering sources of contingent versus permanent talent depending on the exact need. When contingent talent is a better fit, companies hire new firms that provide access to on-demand workers with specialized expertise at lower costs than traditional consulting firms.
3. Not Enough Manpower
Finding specialized talent isn’t the only problem. Companies are also challenged by capacity constraints and labor shortages. According to talent acquisition software company iCIMS, the pharmaceutical industry has twice as many open positions as applicants. In my experience with several top teams within life sciences, these labor constraints are becoming a major obstacle and are causing companies to onboard external teams to execute projects.2
4. Pressure to Digitize
According to a PwC survey, nearly 90 percent of pharmaceutical CEOs believe that mobile technologies for customer engagement are somewhat or very important to their companies’ futures.3 However, 50 percent of CEOs also reported being concerned about the speed at which technology is changing, up from 32 percent in PwC’s previous survey. In order to keep up with an evolving digital landscape, companies need to engage multiple perspectives on strategies for digitizing. Rather than hire full-time teams to manage this process, innovative life sciences companies are utilizing on-demand talent to facilitate rapid collection of direct customer feedback at a fraction of the cost of traditional consultancy projects.
These forces create demand for solutions that leverage distributed knowledge and expertise in the life sciences industry. In many cases, these companies work with teams that can deliver against specific project needs without massive overhead costs. This talent pool often includes former traditional consultants and senior executives with years of real life experience in specific fields.
Life sciences companies may be among the first to recognize the value these independent specialists and consultants add, but they certainly will not be the last. Studies estimate that by 2020, more than 40 percent of the U.S. workforce will be contingent workers—freelancers, temps, and contractors.4 This increase in available, flexible, and experienced specialists will drastically change the way the smartest companies across industries think about talent and operations.
- “Growing in complicated times.” Pricewaterhouse Coopers. http://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2016/pharma-and-life-sciences.html.
- Hill, Catey. “Want a job? These two industries are desperate for talent.” Market Watch. http://www.marketwatch.com/story/2-industries-with-gaping-talent-shortages-2015-08-06.
- “THE CEO Agenda.” Pricewaterhouse Coopers. http://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2015/industry/pharmaceuticals-and-life-sciences.html.
- “Intuit 2020 Report.” Intuit. 2010. http://http-download.intuit.com/http.intuit/CMO/intuit/futureofsmallbusiness/intuit_2020_report.pdf.