How is the Life Sciences industry evolving? Aon’s Meaghan Piscitelli and Tanaz Moazami discuss the future of the industry, focusing on the transformative impact of AI and human capital management. They highlight the challenges of talent acquisition and retention and emphasize the importance of digital skills for the future life sciences workforce.
Key Takeaways:
Experts in this episode:
Additional Resources:
Soundbites from Guest Tanaz Moazami:
Meaghan (00:00)
Hello and welcome. My name is Meaghan Piscitelli and I'm a partner and the global life sciences leader here at Aon. In today's on Aon episode, we're looking at what's ahead for the life sciences industry from a trends and talent perspective. After a period of significant volatility, a slightly more optimistic look is on the horizon for the life sciences industry in 2025. With the right level of preparedness, firms can take full advantage of the potential opportunities this year will bring.
With me today to discuss this Tanaz Moazami, who's a Human Capital Rewards Solutions Partner, leading our life sciences data. Thank you so much for being here, Tanaz.
Tanaz (00:38)
Thank you, Meaghan.
Meaghan (00:59)
In our discussion, we're going to walk through current challenges and opportunities for life sciences, how HR is evolving in the industry, what we might see from AI, and continuing efforts in pay transparency. So with that, let's get started.
So Tanaz, let me pass it over to you. As you think about life sciences companies facing a lot of these challenges, the workforce is going to be more depended on than ever.
But we're seeing the essential roles of recruitment and retention changing. So how do you see HR and talent evolving right now?
Tanaz (01:16)
So great question, Meaghan. So as organizations are looking from a digitalization perspective, organizations, especially in the life sciences, are facing a stronger competition for talent from other industries, especially technology. Many companies report critical shortage and difficulty filling open positions, especially for digital professionals in artificial intelligence, machine learning, natural process languages and data science. Amid financial uncertainty, there has been a decline in hiring rates in the life sciences industry. The downward shift follows a significant decrease in aggressive recruitment practices. Even when we look at our own data in US only, we see organizations hiring at a lower rate compared to the first half of 2022. Currently, we see 11 % of hiring companies aggressively hiring or actively hiring, where in first half of 2022, there were only 44% in terms of hiring. So about 30 % lower rate of hiring in the industry. From a human capital challenges, obviously is climbing as well. And there we're seeing more and more conversation with the C-suite as new issues are rising, such as pay transparency, focus on inclusive workplace and future skill requirements have created new risks and these challenges have allowed HR to be a strategic business function and less operational, which is good news for HR leaders and CPOs within an organization.
Meaghan (03:00)
So that actually, I know you dabbled in the AI topic. So let's double click on that. So the life sciences industry we know is infusing AI into their processes in a variety of ways. So how are you seeing this both on the operational R&D side as well as the people side? So recruiting people, we talked a little bit about that digital or AI driven talent skills. Any thoughts there?
Tanaz (03:24)
So AI is already transforming the sector. So from medical breakthrough and patient care to the analytical efficiencies that can be realized through automation. But automation and process improvement has always been part of life sciences. I don't think that is new. But artificial intelligence is more about creating the efficiencies that comes with getting the product faster to the market, if you will.
Getting the product faster to the market means you need to have the appropriate patient safety and efficacy in place and also providing personalized treatment options. We have also seen that medical technology organizations have been at the forefront of enhancing the patient care experience through the use of data analytics and insights that marries with the artificial intelligence technology.
While AI has been super important to the life sciences in areas of obviously research, development, and quality control, it's also bringing new challenges and risks in areas in cyber with data privacy and confidentiality, as well as concerns about lack of regulations for potential misuse of new technology.
Meaghan (04:41)
Yeah, and that's really a big concern, right? So given our industry deals with such a vast amount of highly valuable IP, so we're dealing with, in the sense of drug formulas, clinical trial data, sensitive personal health information, it's really actually a prime target when we even think about cyber attacks. So what about AI from a talent perspective?
Tanaz (05:04)
So HR leaders obviously should look at the impact of artificial intelligence in their own department. Research suggests that 24 % of roles and 58 % of hit counts are at risk of significant disruption due to artificial intelligence integration. Our own AI study that we just published shows that talent acquisition, learning and development, compensation and performance management are the areas that will potentially get impacted by artificial intelligence deployment. To optimize these skills for competitive advantage, life sciences organizations should carefully balance the associated risk and the benefit. So from a risk managers, they probably need to realign their risk financing strategy to the priorities of the organization.
The risk manager partnering with the market access team can contribute to the organization's success by unlocking the program optimization. Increase in cyber resilience might probably go hand in hand with greater levels of automation. Concerns about geographical disparities in the development of AI research, right, along with patient privacy and data security, again, as we mentioned earlier, has provided some additional concern. Against these increased risks in the industry, probably we need to find a good balance between affordability and innovation.
Meaghan (06:44)
Clearly a key topic that is a tough balance, right, between the people side of it paired with the business strategies and the business financing perspective as well. So finally, I want to take a look at another hot topic. So we've been hearing a lot around pay for performance linking to pay transparency. We always know in the life sciences sector, we've always been a pay for performance culture. But now in this new era of pay transparency and pay equity, what do you think this looks like within the life sciences industry from your perspective?
Tanaz (07:16)
Print and upcoming global regulations will inevitably force companies to disclose their pay practices, promoting fairness and equity in the workplace. While the life sciences industry is slightly in the weather sectors when it comes to being prepared for these regulation changes, one in five life sciences organizations still have not set plans in place. There is also a considerable cost component to meeting this upcoming regulation. As the impact of pay transparency legislations become more pressing in 2025, I will see companies need to be in compliance by 2026. Organizations must continue to maintain momentum on these issues to avoid any potential reputational damage, litigation risks, financial penalties that could result for non-compliant or result from non-compliant. Pay transparency also plays an important role when it comes to employee value proposition. And being ahead of the curve can give businesses a competitive advantage at a time when the talent battle is fierce, helping to build employee trust and attract top talent. When we look at the industry currently, it lags behind others when it comes to communicating and publishing salary ranges. So to gain a little bit of a ground, organizations should probably start offering training to their management, which probably will lead to more effective conversation about pay and also educating the employees about pay decisions and also career development. This will probably assist both managers and employees to create a better awareness what total reward means.
So the total rewards is more than just base, it's bonus, it's equity, and it's other perks that an organization will provide, which is beyond just the salary that's published and it gets announced from a pay transparency perspective.
Meaghan (9:25)
So pay-for-performance discussions are really being brought up at the C-suite level more than ever. Whether from the angle of their equitable pay recognizing performance, shifts from volume-based to value-based models linking payments to patient outcomes, or as mentioned earlier, the linkage to market access and affordability. Reputation and employee value prop is more important than ever.
Tanaz (9:49)
So very true, Meaghan. As a final takeaway, I would just share with our audience today, it's a challenging time in the talent space, and you need to ensure that employee value proposition is articulated. In addition to that, provide your managers the right tools to communicate and educate employees with the new regulations. When it comes to your AI strategy, are you building it or are you buying it? What kind of talent are you bringing in? And when you're bringing in the talent, are you looking at your cybersecurity? Are you looking at your data privacy? What kind of measurements are you putting in place? I guess with all of that in place, look at your talent acquisition strategy. Also look at your career pathways and look at your total rewards optimization. What your employees are valuing and what your employee[s?] and as an employer, what are you providing your employees? From an overall perspective, look at your organization holistically and look at your talent pool holistically.
Meghan (10:53)
It's certainly a challenging time to be attracting, hiring, and retaining key talent. So really appreciate all the insights you shared.
That's our show. Thank you for listening. In the next months, we'll have more episodes on risk and human capital topics. Until next time.