Attracting Europe’s life sciences talent
White Papers | December, 2015
Europe is increasingly attracting smaller and mid-sized US life science businesses looking to establish their first bridgeheads into a new market; while big US pharma’s footprint is well-established on this side of the Atlantic, smaller players now want to follow that lead. With Europe’s own life sciences industry in increasingly rude health, the competition for talent that the incomers will face will make getting their recruitment strategy right one of their biggest challenges.
In the UK, venture capital funding for the sector hit a 10-year high in 2014, while Europe as a whole saw a record-breaking 22 life sciences IPOs last year, up 39% from 2013. The opportunities being created in domestic European companies mean that US newcomers may have to work harder to lure the top staff.
New ventures in European markets require senior managers with a very particular set of skills and experiences, and businesses recruiting for the first time are sometimes surprised by the difficulty of finding and attracting the right candidates – particularly if they haven’t prepared for the search process in sufficient detail.
Jeffrey Webb, a Partner in DHR International's Global Life Sciences practice, says international companies recruiting in Europe’s life sciences industry don’t always find it as easy as they hope to secure the right candidates.
“In recent months, we’ve worked with a number of US clients attempting to set up operations in the UK for the first time,” Mr Webb says. “They have interesting products and their businesses are expanding; salaries are good and the roles they offer are broad-based with plenty of autonomy and potential for growth – yet there is sometimes a reluctance from candidates here to engage with these companies.”
Why should that be so? Sue Rossiter, the Managing Partner and European practice lead for DHR International's Global Life Sciences Practice, says companies that struggle to recruit typically share one thing in common: their business strategy for market entry in Europe is very well planned in granular detail, but their recruitment strategy is far less advanced. These are exciting companies offering good roles that could attract Europe’s brightest talent, she says, but preparation for the search process must be very thorough.
“People are the biggest investment that these companies are making in their new ventures, so they can’t afford to get it wrong,” Ms Rossiter says. “That means understanding the culture and dynamics of the local labour market: if you address potential candidates in the language they understand, you’ll find they respond much more positively.”
What does that mean in practice? Ms Rossiter and her colleagues suggest the following key steps for international life sciences businesses – from the US or elsewhere - planning a move into the European marketplace.
It is never too early to begin thinking about talent when planning ventures in new markets. After all, quality of management is likely to be one of the most crucial determinants in the success of such ventures, so leaving recruitment too late exposes the business to unnecessary risk. “Think of the recruitment process for a new venture as a strategic consideration rather than an operational issue,” advises Sue Rossiter. “You are then more likely to prioritise the search at an earlier stage.”
In fact, the question of talent will often be part of the decision-making process when life sciences businesses are considering where specifically to locate themselves in a new region. There may be particular countries that offer a deeper pool of the right kind of candidates – and it may be necessary to look in different countries for different specialisms. For example, on many measures the UK leads Europe when it comes to pure research in health and medical sciences – with British academics publishing 9% of articles in health and medical science journals, more than any other European country. However, France and Germany both have more individuals employed in the manufacture of medical technology products; Germany nearly four times as many as the UK.
There may also be Government incentives available for companies investing in new ventures in certain markets which would favour one location over another. These incentives may be offered through the tax system, such as the UK’s ‘patent box’, which offers tax relief on profits earned from patented inventions and some other innovations. Many Governments also offer targeted support aimed at developing ‘clusters’ of innovation: Europe is home to several centres which combine academic research with support and infrastructure for scientific businesses, including the Karolinska Institutet Science Park in Stockholm and the Paris-Saclay ‘super-campus’.
There’s a practical consideration for US firms to build into their timescales too. Executives in European businesses are routinely tied into their contracts for much longer than their American counterparts, either with lengthy notice periods or non-compete clauses in their contracts. Leave recruitment too late and it may not be possible to get the preferred candidate into the role on schedule.
Get to grips with geographic variation
“Europe is not a homogenous marketplace,” says Andreas Venzke, Partner at DHR International Neumann in the firm’s Hamburg office. “If you’re a small or mid-sized US life sciences company with no experience of the European market, it can take some time to understand how and why the UK and Germany, say, are very different.”
Part of the challenge is to understand what impact local labour laws will have on a business operating in each market – every legal consideration from rules on minimum holiday and parental leave entitlement to remuneration structure.
Then there’s the question of cultural differences – how people in different marketplaces feel about work, as well as the way local organisations tend to operate. For example, Peter Billing, Partner for the Nordics at DHR International, says: “Sweden tends to have much less hierarchical structures in its businesses where a lack of conformity is less likely to be challenged; our region is also well-known for its life sciences start-ups, so new ventures are welcomed.”
In a handful of European countries, typical workplace structures and practices - such as the French workplace council - can be difficult for an otherwise well-qualified outsider to get to grips with. In those cases it may be advisable to prioritise local candidates.
These factors will influence businesses as they consider where to locate their new operation, but should also be taken into account when roles are being designed and candidates are being considered.
Build a candidate profile
New ventures, almost by definition, are more risky propositions, even when they have the weight of an established and stable parent company in the home market standing behind them. This can be a particular concern in the life sciences sector, where start-ups and small businesses come and go at what can seem like an alarming rate.
It may be a cliché to argue that Europeans are less inclined towards risk-taking and entrepreneurship than Americans, but some markets are more conservative than others. Moreover, as Sue Rossiter points out, “If you’re new to a market and you’re trying to build your brand and presence there for the first time, you may need a different type of candidate – someone with entrepreneurial qualities, for example, rather than experience in leading very large teams of people.”
It is possible to systematically identify such candidates, using assessment techniques, role profiling and interviewing, or to work more formally, but businesses that do not recruit on this basis may end up appointing the wrong leaders – or failing to attract candidates in the first place, because they’re targeting risk-averse individuals who aren’t ever likely to consider the role.
The same issue applies to structure, says Jeffrey Webb. “If you’re running a new European venture with only a handful of staff on behalf of a US parent company that isn’t even contactable for a large chunk of your working day, you need to be able to operate with a high degree of autonomy,” he says. “That requires a certain type of candidate and to find those individuals you need to look in the right places.”
However, cultural differences may mean that interviews should adjust their expectations about how the right candidate will present themselves at interview. Comments Jeffrey Webb: “US interviewers coming to Europe sometimes have high expectations of a candidate on paper but feel that they can come over as a little under-powered in person. Interviewers need to know how to distinguish between old-fashioned British reserve, for example, and genuine hesitation or lack of confidence.”
Consider role design
In order to identify and attract the right candidates for the business in a specific market, life sciences companies will need help designing leadership roles so that the chances of an enthusiastic response are maximised.
“One mistake US firms and others often make when recruiting in Europe is that they’ll take advice on typical salaries from a local source, but then fail to consider how these average rates of pay relate to the candidates they’re trying to attract,” says Andreas Venzke. “They’re then surprised to discover that they may have to pay the best candidates significantly more, which can sit uncomfortably with them.”
US employers can also underestimate how a European candidate will assess the personal upheaval that may come with a new job. Even if the new role is in a different location in the same country, distances that would be commutable in the US will often require relocation in Europe, bringing additional costs. A candidate moving their family from one European country and education system to another may want support with private school fees so that they can access an international school.
Businesses will also need to address the issue of status. “We’ve found that some life sciences executives measure career progression by the number of people they’re managing,” warns Jeffrey Webb. “It’s not always obvious to a new venture that while they’re offering a senior position – the management of a new operation – their favoured candidates are going to be put off by the idea of operating alone or with only a very small number of direct reports.” Such candidates may not be the right targets.
In any case, it would be a mistake to pitch the venture to candidates on the basis of remuneration alone. For example, in Denmark and Sweden, Peter Billing says candidates from across Europe are attracted to the high quality of life that the two countries are acknowledged as offering. “People actively want to work here for that reason,” he says. “That may not be obvious to incomers straight away, but it can be vital part of the recruitment process.”
Take expert advice
Businesses that attempt to move into a new market without taking specialist advice on recruitment and search from an adviser with local expertise and experience are taking an enormous gamble. The legal and cultural variations between different countries’ labour markets are so extensive and wide-ranging that a mis-step is almost inevitable for a business recruiting without local support.
Specialist executive search consultants should be able to provide both strategic and operational assistance, advising a business on where best to base itself in a new market or region and how to do so, as well as developing role profiles and remuneration packages to attract the right type of candidates - not to mention identifying the best people and working with them to encourage their interest.
Given this strategic role, it makes sense to bring in search consultants early in the expansion process, rather than waiting until the key decisions have been made to hire. Advisers will be able to help the business avoid potentially expensive and time-consuming mistakes.
The good news for the US life sciences sector as it ponders its move into Europe is that markets across the region offer excellent candidates with the right mix of commercial and scientific skills and experience. But to identify and secure the services of those candidates will require careful planning and good advice from local search consultants.
The right approach may depend on the life sciences sector. “We’ve found quality assurance people tend to be more risk-averse than those in manufacturing, for example,” says Jeffrey Webb. But it will also depend on the market and the exact nature of the role.
The most important advice of all? “It’s crucial to start planning for recruitment and to begin taking specialist advice as soon as you develop the strategic rationale for a move into a new market,” concludes Sue Rossiter. “Make a mistake in the recruitment process – by failing to attract the right candidates or by hiring the wrong people – and you will jeopardise the whole venture.”