Is Industry Hiring Beginning to Stall? A Q & A with MassBioEd labor market Guru, Mark Bruso
Q: MassBioEd’s latest Quarterly Labor Market Report shows job listings down by 21 percent over the same period in 2016. Does this mean that the long-overheated job market in biopharma is cooling down?
Bruso: The industry can only maintain its tremendous growth for so long before plateauing. Since we have been tracking industry employment and openings, the dip we saw in Q4 is significant in scope.
The drop was widespread – all regions, sectors, and most job types experienced declines in openings. This can be attributed to one of two things – slower expansion of new jobs, or lower rates of turnover, as employers no longer need to seek replacements for workers leaving for “greener pastures.”
Both are worthy of continuing analysis – slower expansion means companies are wary about ROI on additional employees and lower worker turnover could indicate workers are cautious about leaving their jobs or that there is a dearth of better opportunities elsewhere for them.
Q: What future reporting from MassBioEd will tell us more about whether this trend is something to be concerned about?
Bruso: We will be tracking this trend’s staying power in our quarterly reports to see if this trough is a fleeting blip or something else. Our Q1 2018 report is due in mid-April, and we will be able to immediately see if this downturn in job openings persists, and where it is felt the most.
Our Annual Forecast in May will be able to draw on additional employment data. Historically, a severe decline in job openings rears its head in employment data some 3-4 months later.
Q: The Q4 2017 Report also showed that the biopharma industry hit an all-time high in employment, cracking 70,000 employees for the first time. Was the pace to get to 70,000 from 60,000 faster or slower than getting to 60,000 from 50,000?
Bruso: Since the start of 2014, the rate of expansion of the industry has dependably been between 4% and 6%, year-over-year. This is a striking figure. For comparisons’ sake, the entire economy has added 1.5% – 2% to its workforce per year.
We found that it took 40 months for the life sciences industry to go from 60,000 workers to 70,000 workers – from January 2014 to May 2017. However, it took a full eight years – from January 2006 to January 2014 – for the industry to go from 50,000 employees to 60,000.
Thus, the life sciences industry in Massachusetts added its last 10,000 workers 2.4x faster than the previous 10,000. Circling back to the first question – the meteoric pace of expansion in industry employment is more difficult to maintain with every passing year. To substantially increase the rate of growth over three-plus years is astounding.