Posted by: Audrey Erbes | September 4, 2008

Industry Workforce Impacted by Changing Economic Factors

The changing economic environment in which the life science industry operates is now negatively impacting the workforce as well as industry companies. Less IPOs, more mergers/takeouts, layoffs, growing outsourcing of R&D overseas and less funding for startups means members of the industry workforce are competing for fewer jobs at fewer companies against more competition in the U.S. The creation of newly funded and expanding companies always compensated for M&A in the past. As mid-sized companies consider their options we see some new business models, or rather changes from a primary-care focused pharma to a specialty pharma focus, e.g,. UCB and BMS. Big Pharma wants to become more like Genentech with more biologic products but with international product rights, e.g., Astra Zeneca, Wyeth and Roche. Entry-level positions are likely to be the hardest hit from these trends that turned negative in the second quarter of 2008.

Declining Marketing Salaries?

“Career & Salary Survey: Down in the Count” reports “The difficulties marketers face within the pharmaceutical industry—regulatory hurdles, increased public scrutiny, generic competition and ailing pipelines—have become so pervasive that they are almost considered the status quo. What has changed this year, and not without consequence, is the macroeconomic climate in the US. For the first time in recent history, MM&M’s Career & Salary Survey 2008 found that salaries across the industry decreased—by 3.7%—from $133,700 in 2007, to $128,800 this year”. (MM&M, Sept. 4, 2008) But don’t lose heart…those salaries are still high compared to other industries. MM&M reports that manufacturing jobs  are the highest paid in all categories.

The decrease in entry-level jobs won’t be a surprise in this tight financial environment as potential employers hold onto their cash and mid-level positions are more abundent for talented and experienced individuals. “Plug and Play” hiring will increase even at the larger companies. It will be even more difficult to switch into life science jobs from other industries. Those firms hiring are taking more time to make an offer and are more careful.

See the latest Medical Marketing & Media salary survey for 2008 in its entirety at http://www.mmm-online.com/Career–Salary-Survey-Down-in-the-Count/article/116122/?DCMP=EMC-MMM_Newsbrief

where you can download the entire survey report in a pdf file at the url cited.

Does VC Investment Decline Mean Less Work for Consultants?

If you are a consultant depending on work in start ups, you may be seeing a tightening of dollars available not just for entry-level employees for also for consultants. Record venture investments in biotech, medical devices and healthcare occurred in the first quarter of 2007 through the same quarter of 2008 but the second quarter of this year has experienced major declines. There were no public offerings of any VC-backed company in the second quarter. While there were 315 investments in the first quarter of 2008 valued at $3 billion, the number of investments declined to 215 for total of $1.9 billion.

The decline in investments was even more dramatic in the biotechnology sector of life sciences where the number of VC backings fell by nearly 50% and dollar value of those investments fell by 40% according to Thomson Financial. It wasn’t any better outside the U.S., where venture financing fell almost 50% there.

GEN (Genetic Engineering & Biotechnology News) reports that there’s still money available but it’s being shared now with clean fuels companies.See more details in article entitled  “VC Funding for Biotech Companies Withering”at http://www.genengnews.com/articles/chitem_print.aspx?aid=2578&chid=0

It’s more important than ever to “sharpen the saw” and expand your network of contacts. Taking classes to keep you abreast of the latest skills and knowledge, attending industry lectures, and spending energy working and building your network have never been more important. Don’t forget to check out the UCSC Extension list of relevant courses at http://www.ucsc-extension.edu/ and my lists of meetings and jobs on my blog http://www.audreysnetwork.com/.

You can’t find a better organization to join and invest some time than the volunteer driven Bio2Device Group with weekly meetings throughout the year. See list of their programs at http://www.bio2devicegroup.com/ and other events that cover all sectors of the industry. This organization now includes 799 members in the Bay Area who understand the value of a group that supports building and maintaining a vibrant life science workforce locally.

Audrey

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