Recruiters predict a bumpy year ahead for biotech

A conflicting pattern of cross-currents is swirling through the 2003 life sciences jobs pool, according to a survey of recruiting firms specialising in medical and scientific positions.

Anticipated are continued volatile swings in the human medical and biotech segments of the industry which in 2002 were already exhibiting 'brim and trim' behaviour. More stable, gently rising employment growth curves are foreseen for other areas, particularly in the agricultural and food industries.

An overall negative trend may be imposed by consolidation pressures on the 50-plus listed biotechs and the many start-ups who have not yet reached IPO status. Offsetting that, on the positive side of the positive employment ledger, will be jobs created by the vast amounts of Commonwealth funding earmarked for research institutes over the next three to five years.

Biotech has been targeted as a research priority by the Commonwealth government. Its primary funding body for science, the Australian Research Council, is funnelling into biotech ventures $20 million of the $90 million allocated in its latest round of financing for centres of excellence. Another $43.5 million will flow into the controversial National Stem Cell Centre headed by Prof Alan Trounson.

The National Health and Medical Research Council ploughed $102 million into 1234 research projects in 2002. It will supplement those projects with an extra $200 million over the next few years, while industry is expected to contribute a further $116 million. That doesn't count the $18 million earmarked by the NHMRC for clinical research in the new centres of excellence over the next five years.

In total, that funding will translate into a lot of jobs, considering that 60 per cent to 70 per cent of grant money historically flows into labour costs.

It would be too simplistic to calculate the number of new jobs on offer by adding up the sums and dividing them by the average life sciences wage, according to Jeremy Wurm, managing director of executive search firm Brooker Consulting. But while the figure would be too rubbery, it would point in the right direction, he says.

A counter-trend is posed by the appearance in the Australian market of the consolidation pressures which in the past decade have pared down the international number of large pharmaceutical concerns.

Wurm notes that each time one company acquires or merges with another there is room for only one of every senior management position in the resulting corporate structure.

So if a similar wave of mergers and acquisitions flows flow through Australia's listed biotechs this year as projected, it will shrink the pool of senior jobs available in the industry.

Ironically, the supply side is looking bright for the same reasons the demand side is looking suspect, says Wurm.

"The consolidation in the pharmaceutical industry has freed up senior management talent that is now seeking jobs in the biotech sector," he says. "For those executives who can make the transition into a small start-up from a big multinational, that is a valid career path. But it is a culture thing... some people thrive in the relatively risky environment of a start-up and others are less able to make the transition."

Middle management need not apply

Wurm is not optimistic that 2003 will create a freshet of mid-managerial positions in biotech companies. "I wouldn't like to have all my eggs purely in the basket of recruiting mid-managers for biotech companies," he says.

In fact, Brooker deals in the higher management echelons and is now engaged in looking for the 41st CEO it has recruited in the past five years. It is also trawling the international arena for candidates for non-executive board positions with Australian biotechs.

A consolidation phase among Australian biotechs will make it even more imperative for surviving companies to recruit board members with an international market perspective, Wurm argues.

Brooker's field of operations spans the health sector from hospitals to professional associations and medical colleges. In terms of revenues, its business is marginally up compared with 12 months ago, Wurm says.

"The most disconcerting trend I see is the difficulty that organisations are finding in attracting funding from the usual range of sources such as venture capitalists and business angels," he says. "Many of these people turned to biotech after the tech wreck and now they are having their noses rubbed in it again."

Stephen Muller, a consultant with Sci-Med Resources, a division of recruitment firm Staff and Executive Resources, sees a "steady as she goes" trend across the broad life sciences job scene in 2003.

Sci-Med is focused largely on the medical diagnostics area, for which it recruits professionals ranging from service engineers to sales and marketing executives.

It is a sector which underwent a consolidation phase several years ago and several companies trimmed back because of the restructuring of their US parents. A number of senior personnel left with golden handshakes and as the sector comes back there are noticeable experience gaps in areas with experienced medical diagnostics engineers particularly difficult to find, Muller says.

Gains in agriculture, food

While most media attention has been drawn to booms and the occasional bust in the human medical segment of the life sciences market, slow but steady employment gains have been posted by the less flamboyant agriculture and food sector.

Those gains look set to continue this year, according to The Appointment Group managing director Andrew Preston.

The company has been recruiting for agribusiness since 1979 and in the past two years has begun paying special attention to life science professionals in the agricultural and food industries. The sectors are displaying solid activity even though it is largely unsung because they don't receive much media coverage, Preston says.

The Appointment Group's turnover is running 15 to 20 per cent ahead of its performance at the same time last year and the company has just been appointed one of CSIRO's preferred suppliers so Preston sees no tapering off in activity.

While they don't pack the explosive glamour of the human medical area, the agriculture and food sectors post reliable employment growth figures year after year, Preston notes.

One important component of the employment scene in those sectors is made up of the dozen or more rural development agencies. Financed by government funds, the agencies' demand for staff is more stable than the roller coaster trends that can dog the private sector.

By and large, demand for life sciences staff in the agriculture and food industries tracks the growth rate of two to three percent posted by those sectors annually.

"We don't foresee a situation where there is going to be extraordinary growth in demand, but because much of the primary industry research in Australia is government funded, demand for people in food and agriculture is pretty steady."

His company places people across the spectrum from recent graduates on start-up salaries of $30,000 to CEOs on $250,000 but the vast majority of its placements are on packages lying between $60,000 and $150,000, he says.

One of the principal recruiting firms for scientific staff across all industries, Kelly Scientific Resources, says it is too early yet to say with any certainty how 2003 will shape up on the jobs front.

Kelly Scientific director Anne Sabine says the effect of consolidation and closures is being felt in the biotech area. "But it is not all gloom and doom... there are just a few new companies setting up and recruiting people," she says.

Kelly Scientific recruits across the whole range of science professionals for industries ranging from pharmaceutical and food to manufacturing. It also holds recruiting contracts with Federal government analytical labs in which staffing levels appear to be holding up well.

Sabine warns it is difficult to shape a prediction on the basis of January demand because "it is always slow this time of the year and things don't get back to normal until mid-February when you get a better idea of how things stand."