Managing Human Capital to Drive Innovation in Life Sciences

Managing Human Capital to Drive Innovation in Life Sciences
October 17, 2024 7 mins

Managing Human Capital to Drive Innovation in Life Sciences

Managing Human Capital to Drive Innovation in Life Sciences

Digitalization presents both opportunities and challenges in life sciences, driving new organizational approaches to human capital to keep up with evolving talent needs while building a resilient workforce.

Key Takeaways
  1. Attracting, motivating and retaining a pipeline of digital talent in the current competitive skills market is critical to the life sciences industry.
  2. Businesses must reassess the employee value proposition they offer to attract diverse talent and strengthen employee resilience.
  3. Assessing skills readiness and investing in upskilling helps life sciences companies build agility and innovate for the future.

At the very core of life sciences is the potential to improve people’s health and wellbeing. However, innovation is constant and digitalization is shifting people and talent needs across the industry. To enable growth opportunities, life sciences organizations are reevaluating their operations and strategies around established and emerging human capital risks.

  • Digital Direction

    As digitalization impacts the industry — from supply chain to HR strategies — employees with the in-demand digital skills needed to drive innovation must be attracted, motivated and retained. For sustainable growth, life sciences organizations must fill their talent pipeline with resilient, agile and innovation-driven people.

  • Competition Across Industries

    Organizations must rise to the talent challenge against strong competition from innovative technology companies, which typically have attractive internal cultures, differentiated talent acquisition strategies and innovative total rewards philosophies.

  • Selective Hiring

    Over the last three years, there has been a 35 percent decrease in U.S. life sciences organizations actively planning and recruiting for growth. However, the number of organizations that are very selective in hiring has risen 30 percent.1 Life sciences organizations are more consistent with the selective hiring of talent than some other industries — recruiting people with the critical digital skills and resilience needed to embrace agile work practices. Today the industry is looking toward divestitures and “spin-off” deals as a way of refocusing their strategies.

  • Implications of AI

    As artificial intelligence (AI) is implemented throughout the industry, newer roles, such as data scientists and machine learning experts, will impact business operations. Organizations must assess their existing skills and determine where to find new talent to fill any gaps.

  • Higher People Costs

    With AI and machine learning increasingly adopted across life sciences, the value that skilled data scientists and software engineers can bring to a life sciences company can make a huge impact. Although organizations historically employed data scientists, the demand for these roles has exponentially increased, with smaller companies now looking to build and grow talent in that role. The employment rate for data scientists is predicted to grow by 36 percent from 2021 to 2031.2

    Salaries are 17 percent higher for research scientist roles that require generative AI skills than for research scientist roles that do not.3 Salaries are 26 percent higher for software engineer roles that require generative AI skills than for roles that do not.4

People are the drivers of digitalization and organizations have a responsibility to equip them to advance.

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
Partner, Global Life Sciences Industry Leader, Enterprise Client Group, Aon

Shifting Employee Expectations

Along with the rest of the global economy, the life sciences industry is working to develop and refine talent strategies for a changing digital world. As demand grows for multi-faceted talent with scientific credentials, industry acumen and digital skills, organizations must reassess the experience and value they offer to employees.

A Diverse Employee Experience

The way people experience work is shifting. Managing talent and work environments becomes more complex for leadership with globalized, hybrid teams. With changing employee mindsets, values and expectations, demands on employers are increasing — from flexible working and resilience-boosting benefits to engaging organizational cultures and meaningful environmental, social, and governance criteria.

Using Data to Improve Employee Value Propositions

Organizations that want to remain competitive need to do more around their financial, mental and physical wellbeing programs. Multiple generations in the same workforce have different values; some want to work for purpose-driven employers, while some focus on retirement options.

Businesses that do not solely focus on base salary are well on their way to supporting a diverse workforce. However, they must also communicate a unique employee value proposition that recognizes people’s motivations and needs through total rewards strategies, implementing relevant benefits that connect to employees’ lifestyles and investing in diversity, equity, inclusion and belonging.

Building Workforce Resilience and Wellbeing

An organization is only as resilient as its people, yet only 30 percent of employees see themselves as resilient.5 Businesses can assess the resilience of their workforce and identify areas for improvement — ultimately closing a massive gap of untapped potential for growth and change.

As each person is unique, organizations must adapt their wellbeing strategies accordingly, responding to people's diverse needs across broad demographics and situations, while also supporting their physical, emotional, social, career and financial health.

1/3

of life sciences companies provide programs to support employees’ physical and mental health — 10 percent lower than the global industry average.

Source: Aon’s Using Data to Close Workforce Gaps in Life Sciences Companies

Read the Article

Securing a Digital Workforce Through Future Skills Readiness and Upskilling

To drive the innovation and growth that characterizes the life sciences industry, workforces must be prepared for future skills. This includes initiatives like employee training and development, upskilling and reskilling programs and preparing managers to lead their teams.

Future Skills Readiness

There are two main actions life sciences companies should take to improve the future skills readiness of their organization:

  • Boost employee mobility by establishing a sustainable skills framework that is connected to current job architecture and HR processes.
  • Increase productivity by using data to understand the cost implications and benefits of different talent decisions, such as investing in reskilling versus new hiring.
Upskilling

Upskilling, particularly in digital skills, is not only crucial to meet innovation potential, but also provides an opportunity for talent attraction. Where companies are investing in upskilling their people, they can remain at the forefront of innovation; building an agile workforce that’s better equipped with competencies for future ways of working.

When organizations establish sustainable skills frameworks and use data to bolster future skills readiness, better decisions around human capital can be made.

Talent retention strategies, such as comprehensive total rewards packages, will strengthen talent, nurture diversity of thought and drive new generations into life sciences.

In the rapidly shifting world of work, life sciences organizations must reevaluate their operations and human capital strategies to build the organizational agility and resilience needed to drive growth and commercial success. And this starts with having the right people in place. Building a diverse, digitally-skilled workforce through selective hires, upskilling and cultivating resilience will secure the talent needed for future success.

Discover more about managing human capital challenges to drive innovation and growth with Aon’s Better Decisions on Risk Capital and Human Capital for Life Sciences report.

71%

of life sciences companies are planning to increase their focus on future skills readiness.

Source: Aon’s Using Data to Close Workforce Gaps in Life Sciences Companies

Read the Article
Aon’s Thought Leader
  • Meaghan Piscitelli
    Partner, Global Life Sciences Industry Leader, Enterprise Client Group, Aon

1 Aon’s Salary Increase & Turnover Study – Life Sciences and Medical Devices, 2023
2 Data science: unlocking careers for the future, United States Data Science Institute
3 Aon’s Preliminary Investigation of Generative AI Salary Premiums, 2023
4 Ibid.
5 Aon’s Workforce Resilience

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.

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