How COVID-19 Has Reset the Talent Game in Healthcare and Life Sciences
January 20, 2022 – Healthcare and life science organizations have been turning to executive search firms more than ever to acquire world-class leadership. The most pressing challenge has been finding high impact, innovative leaders.
As we start 2022, the economic picture seems to be slowly improving. But what is going to light the match to get us over this economic impact felt from the COVID-19 pandemic? For executive recruiters, life sciences and healthcare organizations hold keys to the answer. Eager for investment, far more resilient than the S&P 500 during the crisis, and poised for a coming sea of divestitures, the life sciences space has boundless energy and pent-up talent demand – just as many organizations are getting the attention, and financing, from private equity firms seeking value investments. It also happened to be the one sector that accelerated during the pandemic year.
There is significant growth in the life sciences market, according to Rebecca Forristall, director of biotechnology and life sciences at Direct Recruiters Inc. “The global life sciences industry has been on the rise, growing more rapidly than ever over the past decade; its trajectory only strengthened throughout 2020 and going into 2021,” she said. “COVID-19 has further pushed this trajectory forward due to mRNA technology opening the door to new possibilities. Because of this we are seeing a job market that is exploding. Companies have more open positions than ever which is resulting in a candidate market. By this we mean that candidates are being contacted weekly about job openings in life sciences and they are also getting more than one offer- sometimes three to four offers. This creates a need to stay very connected with candidates and understand all the job options that they have in front of them very early in the process.”
Life sciences companies are aware this is a candidate market, but they have not necessarily processed it. “We have had to be both patient and persistent with these companies as we explain the market,” Ms. Forristall said. “We are very clear up front but, in most instances, it has taken the loss of a good candidate in order for them to be fully aware of how competitive the life sciences market is. This demand is creating a need for a faster interview process as well as high compensation packages. Some companies take our advice and move forward, others are stuck with unfilled positions.”
COVID-19 continues to create huge growth in life sciences. “mRNA discoveries have opened new doors and because of this, money is being made which then leads to additional drug development and research,” said Ms. Forristall. “All of this growth then leads to investments in other areas of life sciences such as technology and consulting, which in turn become growth markets.”
DRI recruits at senior executive levels as well as sales professionals, customer success, marketing leaders and others. “The most important thing we do is listen to our clients,” Ms. Forristall said. “We need to understand the business needs they are trying to meet with this position and make sure the candidate will meet those needs. We look for integrity and character- a candidate that is transparent with us, letting us know of other opportunities they have in front of them as well as being sure the candidate has the right background and experience for the client.”
Robust Demand
The current demand for executive level talent in the life science/ healthcare sectors is robust, said Steven Hochberg, founder and CEO of Caliber Associates. “The activity is largely due to two main factors. First, there has been a tremendous influx of capital into the sector with companies being funded by VCs, private equity, SPACs, and crossover funds. The number of companies being formed or rapidly growing has increased substantially. With this influx of capital, companies have grown their research and development organizations rapidly. Additionally, given the enormous focus on both therapeutic and vaccine approaches to address COVID-19 pandemic and variants, government funding for these initiates have put programs on an incredible fast track, thus increasing the need for talent in virtually all aspects of research and development, manufacturing and operations, quality assurance and regulatory affairs.”
Given the robust demand for talent, candidates are being deluged with outreach from recruiters, according to Mr. Hochberg. “It is not uncommon for key leaders in high demand areas of functional expertise to comment that they receive multiple calls weekly for similar opportunities they are qualified for,” he said. “This has created unique challenges in the search for passive candidates. It is now not uncommon for top candidates to be evaluating multiple opportunities simultaneously. Additionally, given the demand for senior talent, many perspective candidates lack time in position with their current companies. This makes it quite challenging to fully assess results accomplished.”
Another key factor impacting the search process is the rapid inflation of compensation levels and candidate expectations, Mr. Hochberg said. “Often, this results in creating many challenges for client organizations. The need to balance internal equity and current market trends has represented significant hurdles for companies to deal with. Another key trend relates to the level of flexibility a client is prepared to offer with respect to remote work environments. Expectations for leaders to be on premises vary and candidates have been displaying significantly higher leverage regarding this issue. Given the challenges of rapid growth there is a great focus on reducing search cycle time. Those companies that can demonstrate the ability to be agile and responsive as well as flexible are winning In the ability to attract top candidates.”
During the first three months of the COVID-19 pandemic, companies in both the life science and healthcare sectors were stretched to the max, Mr. Hochberg said. “From March of 2020 until roughly June of 2020, these sectors were focused on patient treatment, protocol design of managing new systems and processes to address the onslaught of catastrophic covid cases, as well as a global sense of urgency to rapidly develop vaccines and therapeutics in the treatment paradigm completely absorbed any focus on key staffing issues.”
Companies were simply figuring out ways to address these unprecedented challenged to their organizations, said Mr. Hochberg. “From roughly June of 2020 to the present, organizations began to realize the tremendous gaps that existed in their new demand paradigms for talent. They began to focus on building strategies to address the new challenged of the pandemic and beyond, and sense that point the demand for strategic leadership has been robust across the healthcare and life science sector. Within life sciences, the most significant needs have been in the areas of clinical research, regulatory affairs, manufacturing and operations. There continues to be a robust flow of news impacting the sector, unprecedented government funding, focus and speed in partnering with biopharmaceutical companies have ignited the sense of urgency and created steep growth curves for the entire sector. This has been supplemented by the inflow of capital vis a vis venture capital, price equity and the public markets.”
According to Ernie Brittingham, co-leader the global healthcare sector at Russell Reynolds Associates, “Today’s business leaders are faced with many challenges: a full-blown climate crisis, an ever-widening social equity chasm and an ongoing global pandemic. Leaders who understand that stakeholders—employees, customers, shareholders, regulators and communities at large— increasingly expect them to help solve the world’s challenges will be more competitive and better positioned for growth. In addition, there has been a heightened focus on future-proofing organizations by investing internally through broader culture and top teams assessments, talent development, coaching and C-suite succession planning.”
Aside from the macro-level trends, the healthcare and life sciences industries are being disrupted through digitization both in telehealth and connected health, as well as the need for organizations to adapt to the new virtual ways of working, Mr. Brittingham said. “This has caused legacy organizations to rethink their business models and allowed for disruptors to enter the space. Additionally, it has coincided with a record numbers of IPOs and market consolidation. The disruption and innovation have caused organizations to reflect on the culture and skill-sets they need to stay competitive in the changing market.”
In addition, Mr. Brittingham also points to the COVID-19 pandemic creating a heightened awareness of the sectors’ purpose. “The industry has attracted mission-driven individuals who want to make an impact through their passion for healthcare. Elective procedures (e.g., dental, ophthalmic, cosmetic) largely came to a halt during the midst of the COVID-19 pandemic, which impacted the type of leadership that was needed to run those organizations as well as talent movement,” he said. “That segment of the industry has bounced back with elective procedures moving forward and the organizations slowly returning to growth.”
To succeed in today’s business environment, leaders require a wide range of leadership competencies. Developed in collaboration with Hogan Assessments, Russell Reynolds Associates uses leadership span to predict future success of c-suite executives. “It reveals how fluidly an executive can move between a set of
loud competencies (disruptive, risk taking, heroic and galvanizing) that underpin our common stereotypes of leaders and their quiet counterparts (pragmatic, reluctant, vulnerable, connecting) that create depth and staying power,” Mr. Brittingham said. “In the current healthcare and life sciences recruiting environment, we have found that leaders who display quieter characteristics as well as resilience and empathy have been particularly successful in navigating their business needs and challenges.”
Mr. Brittingham notes that he is seeing continued growth within the sectors “in the Asia-Pacific region, digital transformation, patient centricity among others are changing the profile of both the organization and the talent requirements. Healthcare and life sciences organizations need to focus on the skill-sets that are relevant for the future success for their company based on the changing market dynamics,” he said.
Pent-Up Demand
“If you look at the situation on the healthcare side, there is a pent-up demand due to Covid,” said Marion Spears Karr, managing director at Comhar Partners. “The situation has been such that everyone has been focused on the pandemic and a lot of key positions were not filled. Clinically, there is a lot of issues in the space of getting enough clinical staff. However, from a leadership perspective, several of those searches have been delayed. In the life sciences space, due to the growth of private investment and the challenges, there is a lot of opportunities and competition for talent,” he said.
“The fact that the pandemic lingered much longer with the Delta variant added to the uncertainty and this caused people to not make changes,” he said. “Secondly, a lot has been written about the great resignation but what a lot of people are not talking about is the great retirement. There is a huge pool of leaders particularly that are looking to or have retired at a very accelerated rate. When that happens, you have a significant amount of institutional knowledge walking out the door. Organizations are scrambling to figure out what to do with those departures.”
COVID’s Lasting Impact
“2020 was also impacted by the fact that no one would travel for interviews, no one wanted to change jobs, and several people stayed where they were, stopping the market for a bit,” Mr. Spears Karr said. “Coming into 2021 and with the pandemic continuing, people have opened up. However, it is still causing issues where organizations aren’t making decisions and are concerned about the future. As far as how the industry recovered, it may not have recovered yet. It is starting to, but we will not see recovery until this year.”
The most important thing to consider now in recruiting leaders in the fields of healthcare and life science is commitment to mission, commitment to fit with the culture, commitment to making an impact for the people that the organization serves and internally supporting their team, according to Mr. Spears Karr. “There has been a lot written around servant leadership, empathetic leadership, emotional intelligence, and all of those key attributes that we’ve thrown around as buzz words, but the most important thing right now is that organizations need leaders that build trust, builds an authentic approach to what they do, create transparency, support the people that they serve and their teams,” he said. “Leaders need the technical capabilities to run a company and be impactful in the role that they play, but there is a much bigger emphasis on cultural fit and leadership attributes. At Comhar partners, we differentiate candidates based on skills, an understanding of the value that they bring to the table, and why it matters to stakeholders and people that they serve. If you have two candidates with the same qualifications, the one that is going to win is the one that has a high emotional intelligence, communication skills, demonstrates authenticity and draws others to them.”
Mr. Spears Karr noted that there is a talent shortage because there is a large population of people that are leaving the industry in both segments. The Baby Boomer generation is retiring at a much more accelerated rate than past generations. “Secondly, there is not a lot of people choosing to come into healthcare,” he said. “The top talent continues to go to fintech or IT. Those are critical concerns that people are not choosing to go into healthcare or life sciences, particularly after the pandemic. The other thing that we can do is focus on building capacity within companies. Companies need a succession plan rather than just picking people who can be managers. What are they doing to develop their internal talent? What are they doing to develop talent at the local and regional level? What are they doing to give back to the community and engage people to be in their industry? It’s a long-term solution, not short. Companies need to refine their culture to the point that it is attractive to young people and different generations while creating a place that people want to be.”
The biggest challenge we are facing, from the candidate side, relates to willingness or ability to relocate for a role, said Todd Wozniak, vice president, search consultant at Cejka Search. “While the industry is gradually returning to something closer to normal operations, we are finding the instability that came with the pandemic has made candidates more risk adverse, as they are reluctant to uproot families because they are starting to see some semblance of normalcy in their family lives and communities,”
he said. “In addition, the ability to work remote and becoming accustomed to that environment has impacted candidates’ willingness to relocate to a work in an office setting. Many candidates, depending on the level of position are inquiring about working remotely.”
“The culture in healthcare is one that is very much team-oriented, collaborative and patient-centered,” Mr. Wozniak said. “Candidates that demonstrate a servant leadership style, high EQ, and a commitment to a culture of customer service and high quality are in great demand to ensure that those core cultural values are advanced.”
To meet the needs of our clients, the focus at Cejka Search is to identify passive candidates currently working in the healthcare/ life science industry. “These are the candidates that bring the high level of experience and expertise specific to the healthcare industry and culture that our clients expect and require,” Mr. Wozniak said.
Mr. Wozniak says that for a number of years, DEI initiatives have been front and center for healthcare organizations, and specifically in the recruitment process as employers seek to not only expand the diversity of their leadership teams in terms of race, ethnicity, and gender, but also in diversity of thought. “The spotlight the COVID-19 crisis has retrained on the issue of health equity has only served to intensify this focus,” he said. “Due to stronger DEI policies and initiatives within our client organizations, it’s fair to say that the industry is more diverse than five years ago, and this is a trend we expect to continue. As an executive healthcare recruitment firm, we built these conversations and practices into our own recruitment process at an organic level, to ensure we are supporting our clients in best meeting their own diversity and inclusion goals.”
An Increase in Activity
While many organizations were reluctant or unable to pursue high-level leadership recruitments during the early and mid-points of the pandemic, in the last few months Cejka Search has seen an increase in activity, as leaders who had deferred retirement and other career moves are able to focus once again on their own career paths. “We expect leadership recruitment in the healthcare industry continue to strengthen into 2022, with a focus on clinical leadership roles as well as roles dedicated to clinical transformation, population health, and diversity and equity,” Mr. Wozniak said. “At Cejka Search, we partner with healthcare organizations to fill executive leadership roles in C-suite, senior executive, nursing and physician leadership across hospitals, health systems, medical groups, and academia. We have experienced a growing demand for physician leaders to help integrate the operations of healthcare with the clinical delivery of medicine.”
“We’re seeing an exceptionally competitive landscape for top talent as companies continue to consolidate and become more innovative,” said John Blank, leader of the life sciences and healthcare practice at Caldwell. “There needs to be a culture of compassion and understanding for the diverse patient population being served. This is different than other industries because you are serving the patients, but the patients’ families are also impacted. In terms of finding candidates who will fit into the culture –referrals from our network of clients, candidates and other industry leaders is a key way to identify executives with the right culture makeup.”
A diverse and inclusive healthcare workforce—both in clinical and nonclinical/corporate settings—can help improve trust and empathy and strengthen the connection with patients and communities, according to Mr. Blank. “The industry is certainly more diverse than it was five years ago, which reflects the focus that healthcare and life sciences companies have been putting on providing better care in the communities they serve,” he said. “I believe that the industry will continue to improve on diversity equity and inclusion as they provide care to their patient populations.”
Caldwell expects to see the continuing consolidation of companies and advancement of digital healthcare. “Innovation will continue to keep the industry strong for years to come,” Mr. Blank said. “At Caldwell, we most often fill roles for CEOs, COOs, CFOs and chief revenue officers. The new roles we’ve been seeing are chief innovation officer, chief of staff and chief strategy officer.”
Medical Device Trends
“Our firm normally travels to over 30 tradeshows each year to stay current on medical device trends, and to meet clients and candidates in person,” said Paula Rutledge, president of Legacy MedSearch. “I was at RSNA (radiology conference) after Thanksgiving and it was appreciably smaller, down over 55 percent from the last in-person meeting. Our clients are talking about the need to continue to attend tradeshows, given that their target audience (physicians and allied medical professionals) are unable – or unwilling to attend.”
“While meeting people face to face still is the gold standard in placing candidates, recruiting at the executive level may rely more on video and phone meetings,” Ms. Rutledge said. “Another trend we are leaning into involves using AI – and we are investing heavily in that technology. With 600,000 medical device professionals
in our database, AI helps bring the right people to the top of our pipeline. Even with technology, it’s still a relationship business and I hope tradeshows and conferences make a rebound because there’s nothing better than having a relationship with the people you work with.”
Overall, the effect of full employment in the medical device space has dramatically affected both the cost and supply of leading executives, according to Ms. Rutledge. “We are seeing this across the board but particularly in operations, supply chain, distribution and in functional areas like quality and regulatory with the changes in MDR regulation and enhanced FDA compliance,” she said. “Before we take a new search, we have a frank conversation with the company around both compensation and speed to hire, using data we provide which gives an accurate reflection of what the ‘new market’ normal is for salary and benefit.
