Money driving demand for scientists, contractors
Staffing Industry Report
November 28, 2005
Biotech is all the rage these days. Biotech companies, once clamoring for funding, are now being courted by venture capital firms around the world. Now cash-rich, biotech companies are pushing to get new drugs approved – and they need help. Many are engaging staffing companies to recruit experienced scientists, or to provide clinical researchers on long-term contracts.
“Although the action on Wall Street was slow all summer, the biotech industry nonetheless managed to raise almost $6 billion during the third quarter, bringing the total raised this year to $20 billion,” stated G. Steven Burrill, CEO of Burrill & Co., a San Francisco-based life sciences merchant bank, in a recent Drug Week report. “That’s $3.2 billion more than the industry had garnered by this time last year,” he said. “When you consider that the capital markets have been ragged and risk-averse throughout 2004, biotech’s performance is impressive.”
During 2004, there were 30 biotech initial public offerings and more than 20 new biotech products approved, according to Burrill’s research. U.S. market capitalization rose 8% to $372 billion as of the end of November. In terms of revenue, the industry has mushroomed since 1992, growing to $39.2 billion in 2003 from $8 billion in 1992, according to the Biotechnology Industry Organization. And as more government initiatives are passed, such as the stem cell initiative in California and the federal government’s Project BioShield, biotech spending, as well as hiring, will only increase.
Employment to rise
Biotech is slightly different from pharmaceutical in that biotech is a newer, more entrepreneurial industry, focused on emerging technologies. Biotech companies are pioneering advanced technology to assist in growing drug compounds, and are using technology as a tool to be able to identify diseases before they manifest themselves. Biotech companies are associated with such buzzwords as stem cell research, genetic engineering, gene mapping and DNA sequencing.
The U.S. biotechnology industry employed 198,300 people as of Dec. 31, 2003, at more than 1,400 companies, according to the Washington DC-based organization. That number is expected to grow significantly in the next decade.
According to a report by the Pharmaceutical Research and Manufacturers of America, jobs in the combined industries of biotechnology and pharmaceuticals are expected to grow 11% over the next 10 years, to 536,300 workers from 406,700 in 2003. The average wage of a “biopharmaceutical” employee was $73,000 in 2003.
For companies that specialize in biotech staffing, this is very good news indeed. At San Francisco-based Coit Staffing, business was up 30% to 35% in 2004. “Companies were being very thrifty with their hiring, so they weren’t overstaffing. But demand is definitely increasing,” said Tim Farrelly, president.
“A lot of companies that were early stage, are now receiving second round funding,” Farrelly said. His company is being asked to search for high-level positions, such as directors and business development managers.
Business is also booming at Korn/Ferry International Inc., which posted a 26% increase in its life sciences division in the second fiscal quarter, driven by biotech and pharmaceutical assignments. According to Matt Faber, who heads the division, scientists, preclinical developers, product managers and marketers are in demand at smaller companies. “In the larger-cap biotechs, there has been a bigger increase in hiring,” Faber said. “Product management, brand management, big increases in quality and regulatory. And there has always been a big need in biostatistics, or statistical analysis.”
At Yoh Co., “We are definitely seeing an uptick in biotech, pharmaceutical and medical devices,” said Bill Yoh, CEO, who said the venture funding is driving staffing needs.
Growth is coming from the clinical side of drug discovery, rather than in testing, meaning that experienced clinical research associates (CRAs) are in great demand. And anyone who is bilingual or trilingual has an even greater opportunity at landing a job, especially in the countries with agricultural technology and biotechnology partnerships. “Companies need people to do research in South America, so having two or more languages is essential,” Yoh said. Because of the increased focus on drug safety, biostatisticians, data managers, physicians, and anyone specializing in regulatory affairs are in demand, according to Yoh. On the clinical research side, chemists and molecular biologists are also in demand.
For the higher-end, sophisticated roles, many companies prefer to use contract staff, especially for short-term scientific and clinical research of three to nine months. For example, an advanced CRA may be needed for a specific research trial that lasts for six months. But for lower-level staff, such as biologists and chemists, many candidates will be hired on a temp-to-perm basis.
“In the past two or three years, we’ve seen an increase in the number of positions, or at least the effort to recruit,” said Richard Kneece, founder and CEO of Boston-based Hirebio.com.
“Companies are looking for very highly skilled candidates with very specialized skills.” It’s the demand for this specialized skill set that is becoming a challenge for biotech companies. “Companies are not taking people from pharmaceutical firms,” Kneece said. “In biotech, you need to know how to grow the drug.”
It is predicted also that there will be a biotech worker shortage between 2010 and 2015, as there are not enough U.S. students graduating with the necessary advanced technical degrees. And many candidates with technical degrees still won’t have enough experience for the high-level jobs.
“There is an increase in the war for talent – being able to attract the right candidates for the biotech areas,” Faber said. “Good, quality candidates are getting multiple offers.” “We have 20,000 candidates in our database, but many of them are not ready for high-level roles now,” Farrelly said. “There is a lot of promise, so by 2010 these people will have the experience for some of those roles.”
But even today, good, experienced candidates often must be poached from other biotech firms. “You definitely have to headhunt and you have to take them from other companies,” Farrelly said. But, that doesn’t fill all of the jobs. So, Farrelly, like others, is going elsewhere for his talent. “The industry is growing by leaps and bounds. We will pull people out of Canada, and place them in the hot spots – Boston, San Diego, Silicon Valley and North Carolina,” Farrelly said.
At the Emeryville CA-based Chiron Corp., which specializes in developing vaccines for cancer and infectious diseases, there are 141 job openings, including many for experienced scientists. At South San Francisco-based Genentech Inc., 250 people have been hired this year, and there are 650 open requisitions.
“In big pharma, and in the biotech industry, there is an increased specialization and increased regulation and process compliance,” said Anthony Damaschino, Chiron’s director of human resources. “We’re looking for specialists in small molecule, or pharmacology – really specialist types of fields. So your generalist person can’t quite jump into those fields.”
Other positions in demand at Chiron are in regulatory, quality assurance and manufacturing. So far, he said, universities are producing good candidates. “I don’t foresee a shortage in science graduates,” he said.
The good news is companies specializing in biotech staffing will profit. Margins are strong, and should remain strong, as long as the jobs are abundant and the candidates are few. At Coit, gross margins are currently 25%, Farrelly said. Bill Yoh declined to disclose numbers, but said they “tend to do a bit better” on the biotech side of the business.