What is the market saying to us?
After a challenging period for the industry, driven by macroeconomic factors and resulting in a significant downturn, are we seeing green shoots to give us some optimism? In this article, the latest instalment of the Talent Hub, Martin Anderson (Founding Director, Carrot Recruitment) looks at this from the point-of-view of market sentiment.
To speak with Carrot Recruitment, click here!
At Carrot Recruitment, we don’t run data-gathering projects on such topics because our information and knowledge come from speaking directly to the people who are immersed in the sectors and skills functions that we service. This provides valuable insight into what is really happening on the ground; as such, this article provides an overview of what we’re hearing from our community.
The key question
We ask the question in almost every conversation we have (and there are over 150 of us operating within Compass Recruitment Solutions talking to clients and candidates every day); the question being:
‘How are you finding the market at present?’
This inevitably opens up a conversation about what we have all come through in terms of the major slowdown in 2023 and the macroeconomic factors that impacted that. But it also leads to speculation about where the market is headed, and, on this point, there is a pretty clear consensus.
So much change has taken place in the past 18 months and much of that is, as yet, unfinished or still bedding in. The reorganizations were caused by shallower pipelines, changes in corporate strategy, tighter purse strings, and more challenging approval processes to name a few.
Evidence for optimism
But there is certainly a sense of optimism that in Q4 this year, or perhaps in the early months of 2025, we will see a genuine upturn in business throughout the industry.
We know through our conversations with investment firms that significant funds are now being deployed, be it for acquisitions or innovation. A recent article by JLL claims that $10 billion in funds were raised by European companies in 2023; this is lower than 2022, which was a record year (~$18 billion raised) but in line with the 5-year average of $12 billion and significantly higher than pre-2020 levels. Approximately 60% of this funding goes to biopharma companies. The article also references ‘Horizon Europe’ (2021–2027) as the latest version of, “The European Framework Programmes for Research & Innovation,” led by the European Union. Much of its focus is on ‘Excellent Science’, with grants totaling €3 billion supporting over 1500 life science projects across >300 institutions.
We know that there is significant movement in medical and health technologies that will build steadily and create massive opportunities, and we know that in some areas we are seeing the trickle-down starting to happen. A second article from February 2024 by RSM looks in more detail at the medtech sector, and suggests that despite market challenges (such as extended FDA approval timelines in the US), sustained R&D and investment growth is near the horizon. There have been fewer deals, but the average investment has increased significantly – in 2023 the focus of these larger deals was mainly on surgical devices as VC firms look for higher impact ROI. The potential ‘unintended consequences’ of the Inflation Reduction Act (IRA) on the sector remains to be seen.
Last week I spoke to two senior Directors from two separate market access/real-world evidence (RWE) firms, and they are seeing more RFPs coming through now – not as chunky or as strategic as they would like but positive nonetheless. I spoke with another Partner in a specialist RWE firm who indicated that they are having a very good year to date, which is certainly evidenced by how many new employees they have hired. And, this morning, I had a long conversation with a Senior Partner in a Strategic Consulting firm in the US, and he reiterated the optimistic feeling with strong demand within existing accounts, and, encouragingly, more dialogue happening with prospective clients.
One final piece that is worth a read is an article hot off the press from Deloitte, which considers the global outlook for the life science sector in 2024 – broken down into six areas of potential growth and anticipated challenges:
- Value creation via M&A, collaborations, partnerships, etc
- Generative AI and emerging technologies
- Global pricing pressures and the potential impact on R&D
- Accelerating the R&D process to faster commercialization
- Globalization versus localization
- The focus on patient outcomes
Here on the ground
Demand for recruitment services is a good barometer of the state of any market, so let’s have a look at how we at Carrot Recruitment have faired recently.
After a very busy and buoyant 2022, we, like most, found 2023 a challenge to say the least. We did ok but we had to work very smart. We hoped the pick-up would happen in early 2024 but it didn’t, so January and February remained tough (these are normally very buoyant months for recruitment). However, these past 3 months have been very strong with increased demand for new talent across sectors, and although we are nowhere near the market of 2022, it feels like a precursor to better times ahead.
One benefit that we have at Carrot Recruitment is that we operate across the full product lifecycle and geographically we are actively supporting clients in the US, the UK, and mainland Europe. Our assignments are predominantly permanent hires at the mid to senior level across the manufacturers and the consultancies. The consultancies were first to be hit by the slowdown as demand dropped off, but now that sector is starting to become more active in their hiring, particularly the market research/business intelligence agencies and the medical communications/education firms too. RWE is clearly a growth area and seems busier in terms of open remits than the general market access space. We are working a higher proportion of our assignments now in the US and also at more senior levels as firms put their leadership teams in place to drive growth plans. We have had a pretty consistent level of demand within the commercial side of the industry, lower demand than normal but we are readying ourselves for some product launch team builds in Q3 this year – another good sign.
In summary, we are seeing more positivity in the broader market, as demonstrated by tentative action – not just rhetoric. Everything is pointing to better progress towards Q4 but it will realistically be the second half of 2025 until the market returns anywhere close to the levels we all enjoyed in 2022.
A comprehensive information network
At Carrot Recruitment we are fortunate enough to work across Life Sciences broadly, spanning pharma, biotech and medtech. This encompasses not only the manufacturers themselves but also the numerous consultancies and other service providers such as the CROs, CMOs, CDMOs, market access, business intelligence, medical communications, and regulatory consultancies. We also work with numerous strategic consulting firms as well as small start-ups in biotech and medtech with early-stage funding.
Through our ties with the European Healthcare Investors Association (EHIA), we have frequent dialogue and face time with the investment houses and their growing portfolios of companies operating in the life sciences arena. All of this sits predominantly within the US, the UK, and Europe.
Thirdly, we are part of a larger organization – Compass Recruitment Solutions (CRS) – which includes an executive search consultancy, Compass Executives (again frequently talking to investors and C-suite decision-makers), and Compass Associates, long-standing specialists within the health, care, and education sectors of the UK and US markets.
Finally, we collaborate with our counterparts from the INRALS community (International Network of Recruitment Agencies in Life Sciences). INRALS is a collection of 18 life science recruitment firms representing 44 countries. We actively service >400 clients globally. If we need specific information regarding a particular healthcare system or market, then we have access to that information almost immediately. My wife and business partner Debbie was in fact with our INRALs friends recently at our annual meeting in Oslo.
To speak with Carrot Recruitment, click here!
Author
Martin Anderson, Founding Director
Martin formed Carrot Recruitment in 2006 having spent nine years in life science consulting and industry positions, initially with the Adelphi Group in Patient Outcomes and Business Intelligence, and then in commercial roles at Merck Serono. He co-leads the business strategically whilst remaining very active at a senior level within the market access, HEOR & RWE space, partnering with clients exclusively to source exceptional talent. Martin also consults with businesses around their talent brand and recruitment processes, offering reviews and strategic direction to help them differentiate their proposition to the talent market.
[email protected]; +44 (0)7786 024 142
Sponsorship for this Guest Column was provided by Carrot Recruitment.