FEATURE: Why biotech recruiters are confident in '04

The slump in the Australian biotechnology industry in the first half of 2003 was reflected in the recruitment market, according to leading recruitment consultants.

Amanda Reid, managing director of Daryl Alexander and Associates, which recruits exclusively for the healthcare industry including pharma, medical, diagnostic and scientific, said recruitment in the pharma sector grew steadily across the board, but was significantly lower in biotech. It's a combination, she said, of funding issues as well as uncertainty created by world events, such as SARS and the Iraq conflict.

"This time last year was the busiest we've ever been -- it's significantly quieter this year," she said. "I think it's in a bit of a holding pattern. But on the flipside, anyone good who is looking for a job will not be unemployed for long."

"The reduced number of IPOs and the difficulty in getting funding from venture capital had knock-on effects for recruitment," said Jeremy Wurm, managing director of Brooker Ruston Poole, which recruits for managerial and executive staff for the biotechnology and pharmaceutical industries. "But it wasn't as bad in Australia as it was in other markets, like Germany."

Seeing things from a different perspective is Diana Heery, director of Science People, which recruits technical staff in commercial science and biotechnology -- as she puts it, the people who "do the real work".

"[Our business has] more than doubled in the last 12 months. I'm not sure if it's because we have more people interested or if the company is more popular," she said. "The busiest time was just after the end of the financial year." In fact, Heery is expanding her operations to meet the demand, opening an office in Brisbane and hiring extra staff for Melbourne and Sydney. "We're planning on another doubling of growth," she said. Heery said there was a growing need for employees at all levels who are capable of balancing science with business, although she is quick to point out that doesn't mean only scientists with business degrees need apply, rather an awareness of the business environment of biotechnology is required.

"You have to be able to balance science with the commercial realities -- and that's across the board," she said, adding that even university researchers have to be aware of the commercial environment these days. "You don't have to have an MBA, you just need to understand that companies have to make a profit and work to put that into reality."

Growth area

Wurm said recruitment for specialised biotechnology positions at academic and public sector research institutions had risen over the last few years. "What we are seeing is that all of these organisations are accepting that biotechnology is a growth area," he said. "There is an increase in recruitment activities in the academic sector especially as biotechnology degrees are established at universities."

Another area of interest to specialist recruiters is the concept of succession planning -- where employees are hired with the idea of moving them up the ladder as opportunities presents, and training them to take advantage of those opportunities. The advantage for the company is that as employees move upwards or onwards, there is someone waiting in the wings to assume new responsibilities.

"It's a more responsive way of looking at employees' needs," said Reid. "It's good for employees and it's good for the company's reputation to be seen as promoting from within."

Heery agreed, noting that candidates are often much more interested in a position that has become available because of a promotion from within.

But the strategy of implementing succession planning into hiring is not widespread within the biotech industry, in part because of its relative immaturity. "The reality is that not many biotech companies have the luxury of affording a full-time human resources person, and this role is usually responsible for driving succession planning," Wurm said. He said that often succession planning is not high on a CEO's priority list -- the CEO is usually far more concerned with obtaining sufficient capital to fund a company's activities. "That's a very dangerous thing to happen. By definition, many biotechs have few staff members -- dozens, rather than hundreds. One person leaving can have huge repercussions -- in a small company, the loss of a key person can have a huge impact," Wurm said.

He also noted that comparing an internal choice for promotion with external candidates can give a company a level of confidence that promoting from within is the right move.

Adding value

Another role where recruitment consultants can play a role is in hiring non-executive directors for company boards. Wurm said that companies that rely on the networks of existing directors to identify new board members run the risk of having an unbalanced board.

"People recruit in their own images," he said. That means that scientific members of the board may tend to suggest other scientists, and members with financial experience are attracted to others of a similar background.

And in today's strict corporate governance environment, it is crucial to select board members who can add value to the company, Wurm said. "The reality is that not every board member has a position description, but they should have. There should be a member for the science, a member for investment, for PR, and so on. If roles are specific, it is more likely that better corporate governance is practiced."

But persuading companies to advertise for directors in addition to pursuing network connections is still a tough sell, Wurm said. "The industry still has to take on board that it's a viable option to recruit for board members," he said.

It's also a tough job for recruitment consultants, said Reid, as biotech is a small market and potential directors are choosy about the companies whose boards they are prepared to sit on.

As for the coming year, recruitment consultants are cautiously optimistic, especially with the influx of funding into the sector in the last couple of months.

"Since July there has been an upswing not only in confidence, but in companies achieving funding, as well as IPOs. This has immediate repercussions in a need for senior staff," said Wurm.

In addition, expansion of companies into pre-clinical and clinical development requires employees capable of performing manufacturing, quality and regulatory roles.

"The future is very bright -- I think it's going great guns," said Heery.