Compensation Considerations and Strategies in the Life Sciences Industry
- Feb 17, 2022
While cash flow may challenge life sciences companies, there are many creative ways in which to structure competitive compensation packages. Earlier this month, the EisnerAmper Life Sciences Practice hosted a CFO roundtable featuring Mary Rizzuti, Managing Director Compensation Resources, an EisnerAmper Group Company, and moderated by our own partner Marc Fogarty. Discussion focused on the important role compensation/human capital plays in helping companies in the life sciences industry achieve their goals. Attendees discussed ways to engage and retain key stakeholders using non-monetary incentives. They also explored linking compensation and business strategies, in order to provide meaningful rewards to key contributors. Highlights from the discussion are included below: According to an MIT Survey about the Great Resignation, published on January 11, 2022, the life sciences industry has experienced a 10% attrition rate during this period. (For context, apparel retailers experienced a 19% attrition rate.)
Compensation is just one factor that has influenced an individual’s decision to leave their employer. Therefore, companies are revisiting their total rewards philosophy to include non-monetary considerations, and to recognize the need for increased engagement in a remote environment, sensitivity to the desire for work/life balance, career development and work that is satisfying. A few suggestions may be:
- Develop position levelling/progression for all positions;
- Consistently schedule one-to-one career development meetings, with continuing follow-up on what is discussed;
- Develop hybrid work schedules, allowing in-office, in-person opportunities for engagement, with flexibility in schedules;
- Re-examine the composition of the compensation packages offered to employees. Is there the correct mix of fixed and variable pay? Where cash may be limited, equity is commonly provided.
- Consider how effective succession planning is for all Cross-train where necessary to provide continuation when employees leave.
There is much to be considered and re-examined to navigate the changing markets—and a number of levers CFOs can pull to arrive at a solution. Periodically, we bring together life sciences CFOs to help each other navigate the way forward. Each roundtable is centered on a timely topic, with a moderator to help facilitate an interactive group discussion. Sign up to be notified of future events.
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