How Life Sciences Build Robust Talent Pipelines in the Age of Digitalization

How Life Sciences Build Robust Talent Pipelines in the Age of Digitalization
April 30, 2024 21 mins

How Life Sciences Build Robust Talent Pipelines in the Age of Digitalization

How Life Sciences Build Robust Talent Pipelines in the Age of Digitalization

While digitalization is delivering transformational change to R&D across the sector, it is also rapidly reshaping recruitment and retention strategies.

Key Takeaways
  1. Failure to attract digital talent with generative AI capabilities is a critical risk for life sciences businesses.
  2. AI-powered algorithms can drive new efficiencies in human capital operations — but with added risk.
  3. Digitalization and new pay transparency regulations are lifting the lid on corporate culture and compensation. But, if leveraged effectively, they can turn risks into opportunities.

The digital evolution and adoption of artificial intelligence (AI) is revolutionizing the life sciences industry. Improved patient care, faster drug development, accelerated clinical trials and streamlined human capital operations are all creating value for the sector and broadening opportunities for growth and innovation. However, these new technological efficiencies also open the door to a broad range of complex workforce challenges. 

To maintain a competitive edge and keep pace with rapid technological advancements, life sciences businesses must prioritize acquiring digital talent with the necessary skill sets and competencies. However, as other industries aggressively invest in their own digital transformations, the pool of available talent shrinks, raising the risks of spiraling costs, as employers compete for talent on pay.

Organizations across all sectors are leveraging AI-powered algorithms to drive efficiencies in their talent acquisition processes. New tools and technologies are helping HR teams analyze vast amounts of candidate data — aiding efficient screening, selection and matching of employee skills to roles. At the same time, potential recruits are also using AI to write cover letters and tackle recruitment tasks. While AI can help to minimize bias in the recruitment process, businesses should not underestimate the importance of human oversight and interpretation of data. 

The digital revolution has also unmasked corporate culture, creating both a challenge and opportunity for organizations. Communicating a genuine corporate culture of transparency and showcasing internal processes and employee benefits can help organizations attract employees with aligned values. Conversely, social media platforms have empowered employees to publicly express dissatisfaction in their companies or expose practices they oppose. The fallout from this can affect employee satisfaction and trigger significant reputational damage.

In the uncharted territory of digital labs and AI-powered research, life sciences organizations must embrace bold human capital tactics to build and sustain a talent pipeline that powers innovation and drives growth.

In-Depth

In a recent Aon survey, participants from the life sciences industry anticipate the need for innovative treatments to fuel growth, with 99 percent of respondents agreeing this represents a growth opportunity as well as a shift in their risk profile.1 In the face of rapid digitalization, life sciences organizations must deploy forward-thinking human capital strategies that attract, develop and retain top talent to achieve these growth ambitions and thrive.

The Evolving Taxonomy of Skills

1 in 3 research scientist positions now demand generative AI competencies.2

In the US, 40 percent of research scientist roles now require generative AI skills. Analysis of recruitment in the sector found that demand for AI software engineers has also climbed dramatically, from one out of every 100 vacancies in 2022 to nearly one in every 10 advertised roles in 2023.3

Life sciences organizations need to understand the impact of digitization on workforce planning and business models and have better oversight of the skills needed to drive their business forward. Creating a skills framework is an important step in identifying workforce skills critical to future success. It also helps organizations identify skill gaps and consider the competencies, behaviors and abilities needed to build a more agile, resilient and innovative workforce.

At this critical juncture in their digital journeys, organizations must weigh the advantages and disadvantages of how to close this skills gap. Should they invest in reskilling and upskilling their existing employees to bridge the gap, or seek qualified talent externally? While new hires may deliver the skills an organization needs at pace, upskilling existing employees can offer lasting advantages. Supporting internal mobility fosters a culture of learning that can boost employee engagement and empower personal growth, leading to higher talent retention and recruitment cost savings. By investing in employee learning and skills development, organizations equip their workforces with the agility and resilience needed to thrive in the face of technological disruption and evolving demands.

An Observed Shift in Hiring Rates

The aggressive hiring rates that have dominated the industry in recent years have more recently slowed, as companies adopt more selective hiring practices. In 2022, aggressive hiring strategies in life sciences accounted for up to 44 percent of new hires in the US. By September 2023, this dropped to 9 percent.4

This shift in approach is reflective of the cost constraints businesses have faced because of inflationary pressures and slower growth caused by global economic volatility, along with the efficiencies being created through the automation of business processes. Increased competition and a talent shortage are also driving life sciences companies to refine their hiring strategies in order to attract and retain top talent and identify people within their businesses that they can upskill.

Quote icon

For forward-thinking life sciences organizations, bringing greater clarity to the performance-reward link could be the key to unlocking a stronger, more equitable, and ultimately, more successful future.

Meaghan Piscitelli
Global Life Sciences Leader, Enterprise Client Group
The Race for Talent

The talent landscape is undergoing a seismic shift as a result of digitalization, and leaders must adapt their strategies or risk being left behind. Aon’s Global Risk Management Survey uncovered that this fact is at the forefront of leaders’ minds; life sciences organizations currently rank the failure to attract or retain top talent as a top two future risk.5

In the quest to secure the most in-demand skills, leaders are now competing for talent with sectors they may not have previously considered as rivals — sectors with historically deeper pockets and possibly more enticing employee value propositions (EVPs). With cash flows under pressure, organizations may find themselves challenged to meet the rising salary demands of critical talent with scarce and valuable skill sets and competencies. Beyond pay and benefits, employees are also increasingly interested in how organizations support the health and wellbeing of their people. While one-third of life sciences firms provide programs to support employees’ physical and mental health, this is 10 percent lower than the global industry average.6

Being in possession of AI skills makes talent with these abilities an even hotter and more expensive commodity. Aon’s analysis has uncovered that research scientists’ roles with generative AI as a requirement command 17 percent higher salaries than those that don’t list it. For software engineers, this salary increase is even greater, commanding 26 percent more.7

Stronger competition and generational differences are also changing the traditional life cycle of an employee and compressing their tenure. Today, employees are making more frequent moves to progress their career trajectory; analysis of career progression within the industry reveals that 79 percent of employees leaving report career opportunity/progression as the reason.8

Decoding Organizational DNA

Across the globe, new pay transparency legislation aimed at narrowing the gender pay gap is reshaping human capital practices. These new disclosures requiring pay range communication to candidates also create an opportunity for broader openness with existing employees. Pay transparency can help to foster a work environment of fairness that builds trust, but without careful planning and communication, it can also jeopardize employee satisfaction and undermine recruitment strategies.

With spiraling salary demands for digital talent, organizations must consider the impact new pay transparency disclosures could have on their existing workforce, with internal pay disparities risking discontent and disengagement. Today, it is more important than ever for organizations to build robust and transparent job architecture and pay strategies that navigate the risks and leverage the rewards of pay transparency. For forward-thinking life sciences organizations, bringing greater clarity to the performance-reward link could be the key to unlocking a stronger, more equitable, and ultimately, more successful future. 

While digitalization is helping organizations to better communicate their compensation structures and internal culture, it has also created new and evolving risks. Global salary insight websites that aim to empower existing and potential employees with compensation data, insights and reviews of employers provide potential hires with a snapshot of life inside an organization. This spotlight can help communicate a positive internal culture to an external audience and increase an organization’s appeal to potential employees. Equally, organizations must consider the reputational and human capital risks that come with the exposure of a negative employee experience.

Future-Proof Your Talent and Rewards Strategy

To mitigate the risks of the human capital challenge created by digitalization and the adoption of AI, businesses must:

  • Focus on Rewards Beyond Salary

    It’s more important than ever for businesses to look at the total EVP, rather than focusing on one aspect of reward. By adopting an approach that goes beyond monetary compensation and considers overall culture, work environment, leadership career opportunities and work-life balance, businesses can better meet the differing needs of generations and attract a wider pool of suitable candidates.

    Employee salary benchmarking and a review of total rewards strategy ensure that an organization’s compensation strategy stays competitive with industry peers, other industry competitors and across different geographies. Pulse surveys and employee focus groups are an efficient way to measure employee preferences and ensure employees are being offered the benefits they want and value, while helping businesses get the best return on their investment.

  • Prioritize Job Architecture

    Building robust job architecture helps organizations create a consistent and transparent framework for development and career pathing for employees. By fostering an environment that builds competencies and skills and provides greater transparency over pay equity, organizations can attract new talent, improve diversity, equity, inclusion and belonging (DEIB) strategies to build a more inclusive and diverse workforce and drive longer employee tenure and engagement. Job architecture of life sciences companies must be both compliant with evolving regulations and future-proofed for changing business needs. 

    Global Human Capital Analytics gives businesses access to comprehensive compensation analysis. With market leading insights, businesses can benchmark base salaries, short-term incentives, equity awards and perquisites and benefits, helping them to remain competitive and attract, retain and engage game-changing talent.

  • Infuse AI into HR Operations and Use Data to Drive Decision-Making

    AI can unlock significant efficiencies within HR strategies, from candidate sourcing to performance management and employee engagement. This data-driven approach empowers a deeper understanding of workforce issues and their effects on employee health, wellbeing and productivity.

    Aon’s Integrated Analytics Intelligence (IAI) uses data and analysis to develop and fine-tune solutions to critical workforce challenges, helping leaders drive greater employee performance and retention. By providing increased oversight, IAI helps leaders better understand the connections between health conditions and safety and risk, employee performance and time away from work, social determinants of health, financial wellbeing and more. Organizations should keep in mind that regulations relating to AI are continuing to evolve and may present challenges for utilizing AI in various ways.

  • Leverage Values and Culture

    Nurturing a compelling and meaningful EVP that caters to the needs and experiences of all employees is an essential step in building workforce engagement and buy-in. Stronger engagement drives higher productivity, improves customer experience, and reduces employee turnover, helping life sciences organizations build a strong and sustainable workforce that can deliver business growth. To do this, you must first understand what matters to your workforce and build a holistic view of employee sentiment.

  • Identify and Elevate Good People Managers

    A manager remains the number one reason an employee stays or leaves a company, so even in the age of digitalization, people skills matter. Investing in developing people management skills is a critical step in building a sustainable, motivated and productive workforce.

    Use talent assessments to conduct a holistic assessment of leadership potential and find future leaders with the skills to engage, motivate and support teams.

Quote icon

2024 is anticipated to be a transformative year for the life sciences industry, as digitalization and innovation unlock the next wave of industry growth and propel businesses that grasp the opportunities before them.

Meaghan Piscitelli
Global Life Sciences Leader, Enterprise Client Group

To capitalize on these burgeoning opportunities, leaders must make talent a priority, embracing data-driven recruitment, agile upskilling and purpose-driven employee engagement to build workforces that push the boundaries and redefine the future. 

 

1 Aon’s Top Risks Facing Life Sciences Organizations
2 Aon’s Preliminary Investigation of Generative AI Salary Premiums, July 2023 and Radford Global Compensation Database, July 2023: Life Sciences and Medical Device Companies
3 Ibid.     
4 Aon’s Salary Increase & Turnover Study – Life Sciences and Medical Devices, Second Edition September 2023, First Edition May 2022
5 Aon’s Global Risk Management Survey
6 Aon’s Using Data to Close Workforce Gaps in Life Sciences Companies
7 Aon’s Preliminary Investigation of Generative AI Salary Premiums, 2023
8 Aon's Radford Global Compensation Database, October 2023

Aon’s Thought Leader
  • Meaghan Piscitelli
    Global Life Sciences Leader, Enterprise Client Group

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Cyber Labs

Stay in the loop on today's most pressing cyber security matters.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Property Risk Management

Our Property Risk Management collection gives you access to the latest insights from Aon's thought leaders to help organizations make better decisions. Explore our latest insights to learn how your organization can benefit from property risk management.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
View All
Subscribe CTA Banner