In recent years, biotechnology innovation has been roaring ahead, which has led to sizeable investment in the sector. This spike in capital inflows peaked during the pandemic and has since ebbed back to more historical levels, hopefully momentarily. The sustained growth in the sector has been rewarding for those who choose to spend their daily discretionary efforts in the employ of exciting companies seeking to make a difference to patients worldwide.
The mission-driven objective of the life sciences sector is a real winner when seeking to create enduring bonds between employees and their employers. The proliferation of start-ups and maturing growth companies that have been central to the sector’s success has meant that the sector has witnessed an agglomeration of companies in key hubs, from Cambridge in Massachusetts to Cambridge, England. This has posed some challenging considerations for how employers attract their future talent, but also, among the cut and thrust of localised markets and the clamboring reach of international firms, how to retain those employees over a prolonged period while ensuring their satisfaction, growth, and productivity.
Achieving workforce stability creates a positive work environment, enhances productivity, reduces turnover costs, and promotes long-term growth and success. In contrast, instability can be a sign of issues with leadership, a lack of clarity among employees regarding the company’s strategy or mission, or poor internal policies, among other things. In this article, we will explore the importance of workforce stability and the basic strategies organisations can employ to achieve it.
The biotech sector, facing the effects of less funding and unfavourable economic conditions resulting in the regrettable consequence of layoffs, has three reasons to take workforce stability seriously. Firstly, the path out of the current doldrums relies on companies being as innovative and productive as possible with the resources they retain. Next, companies must recognise the destabilising effect of the current market tumult and internal company gyrations on their employees. Finally, the sound foundations of a stable workforce will provide the platform for growth once the financing tap is fully turned on. The experience of raging competition for talent in recent years, combined with continuing tightness in particular areas of skill, means companies must guard against complacency towards workforce stability if they seek to also maximise effectiveness in future talent acquisition.
The Significance of Workforce Stability
- Knowledge Retention and Transfer: Long-term employees accumulate valuable knowledge and experience, which is acutely true in highly technical environments such as biotechnology research. When these employees stay with the company, their expertise and institutional knowledge remain within the organisation, benefiting newer employees through knowledge transfer. Furthermore, the potential for critical decision-making that elevates levels of innovation or drives capital efficiency is heightened.
- Network Effectiveness: Several studies have shown that in larger and more complex global businesses, an employee’s effectiveness increases by establishing a deep understanding of the organisational structure, how decisions are made, and the various stakeholders vital to achieving the desired outcomes. While start-ups’ relatively simple organisational structures reduce this threshold, longer-tenured employees have developed the networks to impact and influence the company’s success.
- Reduced Turnover Costs: High employee turnover can be detrimental to an organisation’s bottom line. The cost of recruiting, hiring, and training new employees is considerable, and when turnover rates are high, it wastes valuable resources. Any line manager who has experienced the departure of a key employee will identify with the potential for prolonged business disruption, the detracting effort of running a replacement process, and the time required to onboard the new hire properly. A stable workforce ensures that the organisation can focus its time and resources on other critical areas of growth and development.
- Increased Productivity: A stable workforce tends to be more productive. Many reasons contribute to this, but centrally, people who are settled and focused on their work can contribute fully to their role and the company’s mission, rather than be distracted by dynamic changes surrounding them. The psychological impact of instability drives thoughts and emotions that influence personal decision-making about engaging and contributing at work versus planning for life beyond the current company and role. Employees who have been with the company for an extended period are familiar with its processes, culture, and goals. This familiarity allows them to work efficiently and supports the integration of new employees, resulting in increased productivity and improved performance.
- Employee Loyalty and Engagement: Engendering loyalty among employees can be tasking. The dynamism of the job market in the life sciences sector encourages relatively frequent moves by sought-after talent. Employee engagement is a crucial feature, typically driven by the nature of the work, in terms of the purpose (read here) and the feeling of achievement and personal growth. Workforce stability fosters a sense of loyalty as employees recognise the long-term investment the company is making in their growth and development. Employees who feel valued and supported by their organisation are likelier to remain loyal and engaged.
- Enhanced Company Culture: A stable workforce contributes to a strong and cohesive company culture. However, that same stability can also be detrimental to workplace culture where negative traits have been allowed to manifest. Leaders strive to balance the cultural advantages of a retained workforce, where tenured employees model the organisation’s values and behaviours, with the positive introduction of change brought by talent with fresh perspectives. High staff turnover rates can erode culture continuity and perpetuate an even greater sense of instability. A strong, positive culture that transmits recognisable values with which to align, and where employees feel they belong, is powerful on many levels.
Strategies to Achieve Workforce Stability
Regarding devising strategies for workforce stability, it is important to recognise that not all things are equal. While meaningful work is a priority for nearly all employees, money and compensation might not be. Organisational leaders cannot deploy strategies that will target individual preferences and responses. Instead, they will need to introduce policies and practices that combine to pull the levers likely to have the desired effect across the employee base. Beyond this, line managers must continue with constructive, open dialogue with their team members and tease out more explicit ways to address an employee’s needs or concerns. Below, we suggest ten broad actions that will improve workforce stability.
- Purpose and Meaning: In life sciences, finding purpose and meaning in the work is not difficult. The potential to help patients is purpose enough for most people, but it is not the only motive for sector employees. Whatever the organisation’s mission, the purpose should be clear for all to understand. Employees seek purposeful and meaningful work, often above all else. Those identifying with the organisation’s purpose will likely be deeply committed to achieving it. This leads to many benefits that feed into workforce stability, such as engagement, motivation, belonging, loyalty, performance, and productivity.
- Invest in Employee Development: Organisations should prioritise their employees’ professional growth and development. Providing training, workshops, and opportunities for skill enhancement shows that the company is invested in the long-term success of its workforce. The biosciences field is always advancing, placing considerable demands upon functional and technical professionals to maintain their knowledge, skills and qualifications. The rapid integration of emerging computational approaches in drug discovery demands introducing new skills to the biotech mix, and professionals with more traditional skills will need to work effectively alongside new colleagues from fields such as data science, AI and machine learning.
- Recognition and Rewards: Recognising and rewarding employee achievements and contributions are essential for boosting morale and job satisfaction. Acknowledging employees’ efforts fosters a sense of appreciation, making them more likely to stay with the organisation.
- Competitive Compensation and Benefits: Offering competitive salaries and comprehensive benefits packages is crucial in attracting and retaining top talent. Fair compensation shows employees their work is valued and appreciated. Pay equity is an important feature of the overall compensation strategy and aligns with fairness. Many companies will include equity compensation as a significant part of the overall compensation mix within the biotech ecosystem. The benefits of equity ownership towards stabilising the workforce are well documented. However, when stock prices are trading down because of poor company performance or prevailing market conditions, diminishing the value of equity holdings, maintaining employee morale and incentivising long-term stability, can prove challenging.
- Schedules and Structuring Work: Employees are already challenged to balance work and personal life. To do so is a significant factor in how they view their work and contributes to their wellbeing. For many employees, unpredictable work schedules and the need to trade personal arrangements for their work can lead to disengagement and frustration. Companies that introduce practices that enable employees to plan their lives with greater certainty will see positive gains in stability.
- Career Path: In the biotechnology sector, many companies are considered ‘early-stage’ start-ups yet to scale to a level where organisational structures take on any complexity. Companies of this profile tend to operate under flat leadership structures, and employees have greater access to senior leaders and decision-making. However, such structural simplicity can make the career path for many quite opaque, and it is important for leaders to guide employees to help them understand their possible realistic career path within the organisation. If employees are to give their best efforts, in search of personal growth, what comes next, and so on, is crucial to their focus, commitment and performance.
- Transparent Communication: Effective communication between management and employees fosters trust and engagement. Regularly updating employees about company developments and involving them in decision-making creates a sense of ownership and loyalty. Open dialogue and consultation with employees lead to broadly understood and often better decisions, where employees can feel invested in the outcome and not resistant to it.
- Psychological Safety: Creating a team environment where employees feel psychologically safe is critical to reducing staff turnover and boosting performance. Effective leaders who exhibit the right qualities and behaviours can create psychological safety among their teams, but this often requires suitable leadership training and development. The hallmarks of a safe environment include being comfortable with taking risks, producing work or ideas without worrying about how they will be judged, openly challenging, and raising thorny issues that serve the business without concern about interpersonal pressures.
- Employee Support Programs: Implementing employee support programs, such as wellness initiatives, mentoring, and employee assistance programs, can help employees cope with personal and professional challenges, contributing to their overall satisfaction and stability within the organisation. Peer-level support can also be invaluable, which suggests a role for promoting employee-employee interactions through organic and informal approaches or more structured initiatives like Employee Resource Groups.
- Belonging: Employees need to feel they belong in the organisation. Many companies have undertaken foundational work on inclusivity, contributing to stronger cultural affinity across a wider section of employees. Still, there is more that can be done, and active engagement of the workforce in driving this change can rapidly move a company in this direction. Employees that feel they belong are more active participants in teams, where they feel their ideals are heard and recognised on merit. This fosters a positive culture where employees have pride in the company and each other.
Workforce stability is not accidental; it requires deliberate efforts and a commitment to employee safety, well-being, and growth. Organisations that prioritise the needs of their employees and invest in their development are more likely to achieve workforce stability. A stable workforce saves costs, creates a positive work environment, fosters employee loyalty, and drives overall success. In today’s competitive business world, organisations focusing on workforce stability position themselves for sustained growth and excellence.
Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry with human capital solutions.