Life sciences future skills talent resilience

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Life sciences organizations have been key in containing and fighting the global pandemic. This additional attention and reinforced global relevance increased the industry’s appeal to talent and helped firms attract scientific and research expertise. This is particularly important against a backdrop of greater demand across industries for scientific and digital talent. In this paper, we address the key focus areas for people managers in the life sciences sector today, including:

Appetite for hiring: hungry for growth

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Outlook: A complex future

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Future skills and talent resilience

COVID-19 has sharpened the focus of life sciences organizations on future skills and securing stand-out talent, as they consider a broadening set of factors to attract and retain the best.

apPetite for hiring

The 2021 talent agenda for life sciences

Many life sciences firms are in growth mode and this sense of success is apparent in their hiring practices (see chart 1). According to data from Aon’s Radford Salary Increase and Turnover Study - which surveys 550 Aon clients every six months to ask them about their workforce, hiring and turnover statistics – the life sciences sector has outpaced even technology for hiring over the past three years, with 45% of life sciences firms indicating that they intend to increase headcount in 2021.

Our expertS

Alexander Krasavin Human Capital Solutions – Asia Pacific alexander.krasavin@radford.com

Andrew Cunningham Health Solutions – EMEA andrew.cunningham@aon.com

Guy Pritchard Human Capital Solutions – EMEA guy.pritchard2@aon.com

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The talent and rewards picture is a complex one. Fortunately, the life sciences sector is in a strong position to compete and attract talent increasingly focused on issues such as purpose, DE&I and wellbeing. Firms will need to be more considered in how they develop their total rewards programme to bring in the best, and the rising significance of digital skills may just be the catalyst needed to encourage a re-evaluation of existing talent and wellbeing strategies. Aon’s deep industry expertise is helping life sciences organizations reshape and optimize the workforce of the future. Talk with us about how we can support you through this evolution.

New skills: The future workforce

It is apparent that the workforce of the future will need to be considered around an evolving skills model. Aon’s Future Skills Framework, does exactly that by considering six key skill pillars.

Chart 1

Aon's Future skills framework

Aon future skills framework life sciences

Digital insights are helping firms implement digitalized production and supply chains, unlock innovative market access and pricing models and develop new digital touchpoints to engage with emerging patient populations

New skills

Rewards

Emerging benefits trends

outlook

The sector is evidently bullish, and the confluence of outperformance and growth means that many life sciences firms are fully focused on their talent agenda. It also means that life sciences organizations are looking to understand, map and develop the workforce of tomorrow – particularly as it relates to digital readiness and future skills.

Technology vs life sciences hiring practices

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2021 talent agenda

18%

40%

Technology

Life sciences

27%

37%

Technology

48%

13%

Life sciences

2019

2020

32%

29%

Stay the same

Increase 10%+

2021

Technology

35%

30%

Life sciences

29%

45%

Research and clinical capabilities continue to develop apace. Emerging capabilities such as artificial intelligence, augmented reality, devices and wearables, deeper patient insights, and 3D printing are set to revolutionize the sector.

As firms explore opportunities in the rare diseases and gene therapy fields, they will need to apply methods developed working with larger patient populations in increasingly agile ways.

Aon has qualified the future skill requirements for firms across all industry verticals and we believe that the digitization component of this framework will be of growing significance – and require new skills - of the life sciences sector.

Rewards: the devil is in the details

As life sciences firms explore future talent – both recent graduate and experienced hires - they are increasingly considering the rewards they will need to offer to bring them through their doors. And it is apparent that a traditional approach to total rewards is outdated, as firms look to issues such as financial and emotional wellbeing to differentiate their offering in a fierce talent market.

While base salary remains steady (see table below), other factors are increasingly playing a part in employee decision-making. For life sciences firms, there will be an increased emphasis on targeted rewards to attract top talent, with a focus on those roles that can make a commercial impact.

Pay increases remain flat during COVID-19

Life sciences pay increases global trends

Aon believes that a firm’s total rewards strategy needs to be more holistic and robust today to ultimately win the talent war. Against this background we have developed a holistic total rewards approach that addresses the needs of employees in five areas, namely physical, social, emotional, work/life balance and financial. While career development and financial rewards have been core in the past, we believe that physical, social and emotional rewards are becoming more important – and have been accelerated by COVID-19. It is apparent that inclusivity and equity is a new and rising consideration across in many industries, including life sciences.

Rethinking total rewards

The total rewards strategies of the future address not just the financial and professional needs of the emplyees, but also physical, social and emotional wellbeing. Investing in meaningful total rewards programs and strategies will make your agile, resilient and diverse workforce of the future a reality.

An outcomes-based view of total rewards

While firms will need to continue to get the basics right – salary, insured benefits, pensions, paid time off – it will be the ancillary benefits that can give life sciences companies an edge to hire and retain in-demand talent. For critical and much sought-after roles, the ability to shop around for the best package will force life sciences organizations to consider their rewards strategy more closely.

Implementing a total rewards approach

Recent events have reinforced the need for digital solutions, and its clear employers and employees are seeking both benefits flexibility and offers to suit their personal circumstances - all delivered in a multi-layered ecosystem including web, mobile apps, traditional phone and email support, with a level of self-service that is accessible at a time and in a language that works for them. While life sciences organizations are adapting their approach to total rewards, a few hurdles remain. Aon uncovered key issues challenging our clients in the rewards space, with the changed work environment brought on by COVID-19 proving a particular issue. Talent, pay and rewards have still not caught up with these changes and more needs to be done by firms to evolve their total rewards strategy. In response to these challenges, we observe that benefits managers apply a range of tactics to implement a holistic total rewards approach, including:

Getting M&A right from a talent perspective

The importance of getting future rewards right is brought into sharp focus when it comes to M&A. People are the core of every organization and savvy deal makers know that a strong focus on people is paramount to the success of any transaction. 2021 continues to be an exciting time for the life sciences sector, with all indicators pointing to strong M&A activity in the near-term. A lack of focus on addressing disparities in total rewards across any two firms can bring to light many hidden complexities which can have a serious impact on both operational and financial aspects of the transaction. Firms need to be alert to the potential talent impact of perceived shortfalls in total rewards or company culture and consider adaptive rewards strategies that can flex to changing needs.

As we observe the industry's M&A focus shift towards improving R&D – with many looking to bring in new capabilities and technologies to boost their existing pipelines – there has been an increased emphasis on employee integration, retention and culture fit. Following any kind of M&A activity, it is key that the future rewards strategy helps minimize employee disruption and ensures the workforce supports the overall objective of the transaction. From an internal management perspective, it is important to remember that planning for harmonization starts at the due diligence process, not at close. There are several activities that, when conducted early in the process, can contribute to a smooth transition post-close:

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Establishing clear global benefits priorities and objectives as part of wider HR / total rewards (i.e., compensation, benefits, training, time off, etc.) considerations Beginning integration planning during due diligence and accelerate the momentum when the deal is announced to make as many key decisions early on to achieve efficient results Developing sound side-by-side comparisons of legacy benefit programmes in each country (both design and costs) to understand the baseline for existing employees Getting the communications right – beginning with required communications to employee representatives, through to direct communications to employees around the value of the transaction and the tactical implications

Hiring the right talent Getting rewards right Emerging benefits trends

Insights in this paper leverage Aon’s life sciences expertise across our benefits, health solutions, human capital, and M&A teams.

Elevating the rewards conversation to the c-suite, Measuring the impact and effectiveness of total rewards investments, and Shaping the rewards agenda to better reflect the needs of the future workforce.

Focus on the physical and mental wellbeing of employees Supporting a virtual work environment Responding to short-term financial challenges in many industries An increasing focus on diversity, equity and inclusion A reactive approach to emerging challenges

Developing policies to support virtual work environments Taking actions to improve diversity, equity and inclusions Focusing on actions needed to drive long-term growth A more proactive, strategic approach to rewards

2020

2021

Evolving organizational approaches to rewards

Four DE&I considerations

Wellbeing of employees

Priorities of life sciences talent are also evolving. Employee-centred strategies such as wellbeing; diversity, equity and inclusion; and more proactive, strategic approaches to rewards are on the rise. Many companies are shifting from a more reactive response to employee wellbeing and remote work during the pandemic to developing longer-term policies on virtual work, investing in a diverse workforce and thinking more strategically about their total rewards.

Emerging benefits trends in life sciences

Pay and career equity (and the effects of remote work)

Hiring remotely without bias

Adding DEI/ESG to STI plan measures

Assessing the needs of diverse talent and whether changes to TR are needed

The pandemic exposed how important employee wellbeing (from an emotional, financial, mental and physical standpoint) is to the overall health of an organization. In today’s environment, our 2021 Global Wellbeing Survey research shows that wellbeing has become much more than programs, apps, tools and nice-to-have resources to change employee behaviour. Wellbeing is a people and performance strategy, and is on its way to becoming the ethos of organizations around the globe. 82% of organisations globally believe wellbeing is important within their company. It is a business essential. What’s more, our survey research finds that improvements to wellbeing performance have the greatest impact on customer satisfaction and retention—all key drivers for business resilience, continuity and growth. Recognizing the role wellbeing plays in customer relationships and retention should become an element in strategic business discussions. Further analysis from Aon’s new Rising Resilient self-assessment tool found that life sciences firms are resilient compared with other industries. Much of this relates to a strong sense of purpose, high levels of personal responsibility and good workplace collaboration – all factors that align well with the expectations of a future workforce looking beyond base incentives. Top wellbeing issues facing the sector according to Aon’s Rising Resilient insights:

For some firms, diversity, equity and inclusion (DE&I) is being more closely considered – both among employees and at the c-suite level. Life sciences firms – like those in other sectors – are under pressure to respond to a growing desire among employees that DE&I issues are baked into company policy. These are the four areas where companies are spending energy to embed DE&I into their long-term total rewards framework.

For those firms able to flex their rewards strategy to mirror the rising DE&I agenda, they can look to develop a differentiated and long-term rewards strategy, one which offers benefits such as extended parental leave and gender pay equality. This can serve as a differentiator when it comes to attracting talent and should form part of a broader strategic approach.

It is apparent that a mixture of working from home without co-worker support for protracted periods, and often intense shift work in lab environments, have placed significant stress on life sciences talent. Firms that want to remain relevant need to do more around their financial, mental and physical wellbeing programs - whether this is clear sign-posting or engagement from the top – and such issues will be critical in their future talent strategy.

In summary, firms will need to pay close attention to mental and physical wellbeing as the pandemic’s impact on the sector plays out; but can also leverage an increased emphasis on wellbeing to develop a more robust and forward-looking rewards strategy to attract and retain the best.

Diversity, equity and inclusion: four considerations

Key highlights on the life sciences industry in the wellness context are:

of the organizations surveyed have clear objectives to help employees feel their work contributes to a greater cause

of employers agreed with the statement that senior leadership has clear metrics to assess the state of emotional wellbeing throughout the entire organization

if the organizations said that they educate their employees to be prepared for unexpected expenses and periods of financial uncertainty

Unconscious bias training can help organisations ensure remote recruitment includes diverse candidates and decisions, by embedding DE&I immediately in hiring decisions.

96%

89%

22%

15%

of employers agreed with the statement that the organizational vision supports individual development and responsibility

Supporting mental health in an uncertain context, leveraging technology and providing adecuate training to managers and staff Employee Benefit communication to increase employee awareness, boost engagement and attract and retain talent, Staff financial health education: Employee expectations have changed and employees require additional tools to deal with unexpected expenses, while being able to reach their full potential at work

Encouraging health positive behaviours Protecting physical health Supporting mental health

Having a DE&I key performance indicator is helping organisations focus on the issue and enabling them to put targets around it. This is helping to create a causal link to pay and incentives.

Ensuring pay and promotion decisions are equitable and can be tracked in a DE&I-compliant way and are aligned with DE&I objectives.

Helping firms develop a total rewards model that is agile enough to reflect the diversity of their workforce.

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Firms that want to remain relevant need to do more around their financial, mental and physical wellbeing programs.

Building a Resilient Workforce

2021 Talent Agenda

Appetite for Hiring

New skills

Rewards

Emerging benefits trends

Outlook

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Human Capital and Health

Meaghan Piscitelli Life Sciences Industry Leader – Global meaghan.piscitelli@radford.com

Global Life Sciences Leadership

Lars Sorensen Life Sciences Industry Leader – Global lars.sorensen@aon.com

Simon Thompson Health Solutions - Asia Pacific simon.thompson1@aon.com

Anne-Christine Fischer Life Sciences Consulting Leader – Global anne-christine.fischer@aon.de

Stephanie Pronk Health Solutions - US stephanie.pronk@aon.com

2020

Employee communications will be crucial. Employees need to be fully aware of their total rewards - and their value - alongside the support the company is providing to them today, tomorrow and throughout their career journey.

Talk with us

If you would like to discuss any aspects of these insights, or to better understand our capabilities in this area, please do not hesitate to get in contact with our team.

Guy Pritchard – EMEA guy.pritchard2@aon.com

Meaghan Piscitelli - North America meaghan.piscitelli@aon.com

Alexander Krasavin - Asia Pacific alexander.krasavin@aon.com

Judy Zhang - China judy.zhang@aon.com

Mergers & Acquisitions

Bruno Monteiro da Silva M&A Solutions – EMEA brunomonteirodasilva@aon.com

Global Life Sciences Leadership

Mergers & Acquisitions

Bruno Monteiro da Silva M&A Solutions – EMEA brunomonteirodasilva@aon.com

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Future skills and talent resilience