It’s been a crazy last few years in the pharma and life science recruiting market. Covid and cheap money drove a frenzy of growth. This created a great deal of new jobs without enough trained STEM candidates to fill them, inflated employee compensation packages and drove remote work.
A year later, with higher interest rates, many investors like large pension funds can easily get 5%+ yields on their money in low risk saving accounts/CD so they don’t need to take as much risk investing in venture capital to meet their goals. Additionally, cheap money that private equity leverages seems to have evaporated. And lastly there is over capacity in areas covid grew: Genomic testing and biomanufacturing. Who dreamed there would be over capacity of lab space in Cambridge MA?
So what’s going on with the job market? Biospace released their Q3 Life Science Recruiting update this week. They reported layoffs continued in the third quarter as companies continued restructuring with several shuttering for good. They did not anticipate an increase in open roles for Q4. Looking ahead to 2024, their outlook seems more optimistic. Far more of their survey respondents (44%) anticipate that the number of open roles will increase rather than decrease next year. GenomeWeb recently published that Vizgen, Bionano Genomics, and Nanostring all had layoffs. On the positive, there are still jobs open and companies are raising money perhaps at a slower rate. Last month, I placed a CEO, Global Head of Sales & Marketing and a Director of Business Development. So things are still moving.
So what does this all mean? I believe that Life science innovation will always drive growth. Good ideas are still being discovered. Candidates may need to lower their expectations for compensation goals while boards/investors might need to recalibrate what their work force really can achieve revenue wise this year into next and adjust the plans/quotas accordingly. We always come out of this, but the companies that do best are the ones with clear heads and can modify in order to stay the course. The JP Morgan conference in January will be a good data point to forecast what 2024 will look like.