The collapse of the SVB on March 10, 2023 made national headlines, and prompted fear of a looming financial crisis and a return to government bailouts. For biotech investors and employees, the collapse of the tech-focused bank raises additional concerns about the stability of the biotech sector.
What is the Silicon Valley Bank?
The Silicon Valley Bank (SVB) was the 16th largest bank in the USA. Founded in 1983, it catered almost exclusively to technology companies by providing the venture capital funds necessary for biotech start-ups to grow. Prior to the events of early March, the bank was worth $212 billion.
Why did it collapse?
In early March 2023 the SVB announced it needed to raise more money, citing rising interest rates and inflation. This announcement caused panic, and customers and investors rushed to withdraw their money, leading to the collapse of the bank’s value. Within 48 hours the damage was done, and the Federal Deposit Insurance Corporation (FDIC) took over the emergency operation of the bank.
The FDIC is currently trying to sell SVB as part of its break-up plan.
Is this a repeat of the 2008 financial crisis?
Following the collapse of the SVB, Silvergate Bank and Signature Bank fell in quick succession a few days later. Although the successive liquidation of US banks is alarming, and the overall likelihood of a recession in the next few years has risen, the fallout from the SVB collapse is mostly contained to the biotech sector and other medium-sized banks who cater to a narrow selection of industries (both Silvergate and Signature focused on cryptocurrencies).
Some issues appear unique to SVB’s downfall, such as the role of a chief risk officer being unfilled last year. The bank also stored its money in long-dated Treasury deposits, which give modest returns on investments. When inflation rose, the bonds no longer yielded satisfactory returns.
How does the Silicon Valley Bank affect the biotech industry?
Silicon Valley Bank was seen as the bank of choice for young biotech companies, because they tailored their services to venture-backed start-ups and agile biotechs looking to grow. Unlike commercial banks, most of SVB clients deposited amounts greater than $250,000, which is the maximum amount of savings protected by the FDIC in the event of a financial collapse. It’s estimated that 85% of SVB’s bank deposits were uninsured. It’s therefore not clear how much damage has been wrought on the biotech sector, and it will take a time for companies to disclose any losses. It’s possible the US government will bail out companies who lost uninsured deposits if the crisis deepens, but that’s not happened yet.
In early 2023, biotech start-ups are already struggling thanks to rising interest rates and a hiring slowdown. Established companies have the diversified portfolio necessary to withstand economic shocks better than start-ups with only one or two pipeline products.
However, the failure of Silicon Valley Bank may see a slowdown in the biotech sector as venture capitalists become more cautious about investing in biotechs, or the regulations around life sciences investment increase. What this does for the biotech sector as a whole remains to be seen.
In the second of our Meet the Recruiter series of blog posts, we’d like to introduce Mike Cordaro and Sandra Tramontozzi, two seasoned Recruiting Partners who have played a large role in building out Sci.bio’s business development and contingency recruiting team.
Mike handles medical affairs recruiting and business development for Sci.bio. Sandra also works on the business development side, and specializes in filling HR and talent acquisition roles for biotech companies.
Journey to Sci.bio
Mike graduated from the University of New Hampshire with a degree in Biology, but, though he enjoyed science, he didn’t see himself working in a laboratory. After several years as a recruiter with other staffing agencies, he joined Sci.bio in 2019.
Sandra has been with Sci.bio since 2020, having spent many years in business sales and recruitment at other staffing firms. She has a M.S. in Administrative Studies from Boston College. After taking a career break to focus on her family, she decided to re-enter the workforce during the pandemic as the risk of an economic downturn loomed. Sandra knew Sci.bio founder Eric Celidonio from her previous role, and knew his company was entering the pandemic in a strong position.
Building meaningful and productive client relationships
Mike and Sandra both work in business development, reaching out to and building relationships with potential biotech clients. They stress establishing rapport with clients is vital to their business, even though it’s a process that takes time. Sci.bio has always focused on relationships first, knowing that clients become candidates and candidates become clients, so building connections with people is supported from the top down.
In Sandra’s experience, business relationships are difficult to build by email, so it’s important to get on the phone with clients. “In a pandemic world where we’re not meeting face to face, a Zoom meeting with clients is even more powerful, because they’re also getting a sense of your presence and professional demeanor.”
Mike and Sandra agree that for a client-recruiter relationship to be successful over the long term, there has to be a personal connection. “Not every conversation and not every single message has to be sales focused,” Mike explains. Sandra notes that not every client is comfortable sharing a lot of personal information, so the recruiter should avoid prying or oversharing themselves. However, she cautions, “if you’re strictly transactional with clients — even if you deliver great results — you’re not building a professional friendship with them, you’re just a vendor,” and the partnership is unlikely to last.
Advice from recruiters to their clients
On the other side of the equation, Sandra’s advice for clients looking to build productive relationships with a recruiting partner is to always give the recruiters feedback on the candidates presented, especially when they weren’t quite what the company was looking for. “Even though it must be very time consuming, just sending one line in an email that says, ‘hey, none of these candidates have XYZ,’” can help recruiters refocus their sourcing to better meet client’s needs.
The Sci.bio advantage
Having worked at Sci.bio for several years, Mike and Sandra know clients appreciate working with an agile, specialised biotech recruiting firm. “Sci.bio offers a lot of service at a small scale,” says Sandra. “We can really be a partner and a total staffing solution for our client. And we can scale with them as they grow, which is beautiful.” Many of Sci.bio’s clients are biotech companies in the preclinical or early clinical stage of development and only need a contract recruiter in the beginning. As the company expands, Sci.bio can help them scale their in-house team by sourcing senior and executive hires.
Mike sees Sci.bio’s roster of recruiters with science degrees as crucial to the firm’s success. “The biotech industry is very different from any other industries. Biotech roles require the cream of the crop.” However, many suitable job candidates lack detailed LinkedIn profiles — or aren’t on LinkedIn at all — so it’s harder for recruiters without science backgrounds to find them and identify key technical skills. Sourcing candidates to match the client’s needs requires a good grasp of scientific concepts, something Sci.bio is able to provide that larger, less specialized agencies struggle with. “Maybe I’m not producing 10 resumes 24 hours after receiving a requisition,” says Sandra, “but I’m producing three resumes that are very specifically tailored to the client’s needs. And that’s a better use of his time.”
COVID-19 and the changing biotech recruitment landscape
The pandemic has had an impact on recruitment and hiring patterns within the biotech sector. Some of those changes may shift as COVID-19 abates, others could last longer. For instance, Sandra has noticed candidates balancing family care and homeschooling with remote work are requesting part-time roles at the moment, leading to a lack of candidates for full-time roles.
Mike finds potential candidates becoming more risk-averse and less willing to consider moving out of their current jobs. “I’ve even spoken with a lot of candidates who — when I was in contact with them before — were open to a conversation about new opportunities. Now if they have job security, they’re not letting go of that.”
Although COVID-19 hasn’t stopped hiring in the biotech sector, uncertainties about clinical trial results and future revenue means biotech companies are hiring more contract than permanent staff right now, and leaving in-house HR and talent acquisition roles unfilled. Sandra predicts there will be an uptick in permanent HR and talent acquisition roles available next year when the pandemic recedes and a sense of stability returns. Mike notes that clients are much more open to offering remote positions, and are not just recruiting biotech candidates from within the Boston area.
Despite the changes COVID-19 has wrought on the biotech sector, both Mike and Sandra feel Sci.bio has adapted well to remote and flexible working, and that the future looks bright for biotech recruiters.
This bird’s-eye overview explores the attitudes, approaches, and actions that will make it happen.
It’s not what you know, it’s who you know. Actually, it’s both—and a whole lot more. Whether you’re new to the biotech industry or a veteran between jobs, a plum position in this red-hot sector is unlikely to fall in your lap. To get the biotech job of your dreams, or even that steppingstone position, you need patience, perseverance—and above all, a methodical approach.
This overview puts all the must-have information at your fingertips, from the prep work you need to do before starting the search to the extra touches that will help you stand out before and after the job offer. Follow the links to dive deeper into specific areas of interest or challenge. If any questions or concerns remain, Sci.bio is happy to walk you through them.
CHARTING YOUR COURSE
First things first: deciding what you want to do and where you want to do it. Confronting these decision points early on will pay dividends in your job search and career satisfaction.
A Question of Degree
Do you really need a PhD to get a good job in biotech? That depends on the career trajectory you have in mind. If you aspire to the halls of academe, you’ll obviously need the credential. A doctorate also positions you for medical science liaison jobs. Leaving such specific scenarios aside, success in biotech does not depend on a PhD, and the years of toiling for the designation could even set your career back. The only thing a doctorate guarantees is that people will call you “doctor”—it certainly doesn’t entitle to you to a job.
Many PhDs see their colleagues transitioning to academic post-doc positions and conclude it’s simply the “thing to do.” But basic research and the grant-application machinery don’t suit everyone, and recognizing a poor fit can spare you years of frustration.
The academic life comes with an attractive package of intellectual rigour, collegial culture, and freedom to explore your own research interests. That’s the theory, anyway. In practice, responsibilities outside the lab can interfere with research time and the pressure to obtain funding can take its toll.
Opting for industry doesn’t mean giving up on your career as a scientist; the biotech industry produces a steady stream of research, often with a more clinical bent. If the lab bench doesn’t call to you, however, industry offers almost limitless opportunities to rise through the ranks and experience the high of working in teams. You’ll find more details about the pro and cons of each choice in this article about academia vs. industry.
Size Matters
There’s big pharma and there’s small pharma—companies that employ fewer than 500 people. Arguably the safer choice, big pharma will take you through a formal training process and give you access to a steady stream of learning opportunities. With size comes bureaucracy, of course. The red tape can slow down processes and create distance between the work you put in and the final result. Even so, consider going big if you value a mix of predictability and opportunity—and a good night’s sleep.
At the other end of the spectrum, a job with a biotech startup offers unparalleled excitement and collegiality, as well as a good chance of seeing a product going through a full development cycle. Or you may find your sweet spot in the relaxed culture and fluid roles of a small pharma company—the preferred option of an increasing number of biotech job seekers.
Off the Beaten Path
If you’re like many science graduates, you know a lot more about science than about science careers. Most post-secondary programs fail to educate students about the possibilities ahead, leaving graduates with a blinkered view of their options. If you’ve made it to the PhD level, you may see little beyond a postdoc or medical science liaison in your horizon.
The world of biotech is a lot bigger than that. Less common biotech careers that flow naturally from a PhD include market research analyst, business development manager, and medical communication specialist. And it’s not true that you need an MBA to snag a business consultant gig: the rise of technology-based business sectors has created a demand for consultants with STEM PhDs.
Then there’s the cannabis industry, a high-growth sector that rewards both creativity and business acumen. From extraction techniques to quality control, needs for scientific expertise in this area continue to grow. If you thrive on human relationships, you could find your niche in biotech recruitment, which combines uncapped earning potential with the unique satisfaction of helping other people launch their careers.
READY TO LAUNCH
Once you’ve established your desired destination, it’s time to lay the groundwork for a smooth and fruitful biotech job search.
Where to Look
Start by working backwards: make a list of companies where you’d like to work and check out the careers pages on their websites. You may be able to set up automatic alerts so the system notifies when suitable positions open up. Next, scour job boards that focus on the life sciences, such as the job pages on BioSpace or the Life Sciences Network.
Don’t discount general job boards, either. Many employers cross-post their vacancies on a number of job sites, including all-purpose sites like Indeed or Workopolis. A recent Indeed search for Boston-based biotech jobs turned up vacancies for a senior scientist in in-vitro pharmacology, a quality control analyst in microbiology, and a bioinformatics associate, among others. Even Facebook has its own job board.
There’s also the question of when to look for a job: while there’s no hard and fast rule, your odds of success rise and fall at certain times of year. More important than the season is the time between the job posting and your application: make it as short as possible.
High-Yield Networking
Start by making a list of networking prospects—friends, acquaintances, and business associates who may be able to offer advice or job leads. Ideally, this list should include people with positions you aspire to. Send each of them a brief email detailing your situation and your ask. If you get no response after a few days, don’t assume they’re willfully ignoring you. Far more likely is that they’re busy or disorganized, and everything less than urgent gets pushed into their “later” file. Follow up with another respectful call or email. Rinse and repeat.
Once you’ve heard back, aim to schedule a meeting over video (or in person, if/when Covid protocols allow it). Keep the meeting short and real: show interest in the other person, but get to your point. Seek advice about how to brand yourself and ask for new introductions or industry insights.
While looking for a job can easily become a job in its own right, consider breaking up your day with volunteer work. Not only does volunteering boost mental health, but the people you meet can become part of your informal network. Along similar lines, choose a couple of professional events to attend, either in person or virtually. Have a well-rehearsed elevator pitch so you can approach people with purpose and confidence.
Leveraging Social Media
Whether you love it or hate it, you can’t avoid social media when looking for a job. As evidenced in a recent survey on career building, social media now plays a significant role in the hiring process: not only do employers use social media to research candidates, but nearly half have a bias against candidates without any social media presence at all.
If nothing else, you need a LinkedIn profile to be seen as a serious candidate. Take the time to list significant accomplishments, awards, and testimonials on your LinkedIn page. Regular engagement on Twitter, while not a requirement for a successful job hunt, can demonstrate knowledge of your industry. Blog posts showcasing your communication skills and interactions with a prospective employer’s social media accounts can add further credibility to your social media presence.
If your social media profile is less than squeaky clean, you’ll need to do some scrubbing. Revealing photos, discriminatory comments, bad-mouthing previous employers, lying about an absence could easily land you on an employer’s no-hire list. No matter how many likes you garnered from such posts, delete them.
Working with a Recruiter
On the face of it, there isn’t much downside to working with a recruiter: it gives you access to an inside track hidden from public view. But the wrong recruiter can do more harm than good—for example, by sending you on interviews for ill-fitting jobs. A strategic approach to finding a biotech recruiter will help you avoid this outcome.
Rather than simply contacting the biotech recruiters that pop up in a Google search, attend networking events in your industry, where many recruiters congregate to build relationships with clients and meet candidates. If you’re a woman, you owe it to yourself to check out the events run by Women in Bio, an organization dedicated to giving women more visibility in the life sciences.
If you have your eye on a specific company, you may be able to connect with internal recruiters (i.e. recruiters who work within an organization) by using LinkedIn to locate employees with such titles as hiring specialist or employee success manager. If you’d like to learn more about how Sci.bio can fast-track your job search, we’ll be happy to arrange a conversation.
RISING UP FROM THE CROWD
Whether you have an impressive track record or no track record at all, taking extra care with your self-presentation can give you a meaningful edge.
Standout Resumés
Not sure where to start? This Science Magazine article about scientific resumés can help you decide between an experience- and skills-based approach. Whichever option you choose, you can’t go wrong with tried-and-true resumé-writing principles such as simplicity, lack of visual clutter, and logical progression. Resist the temptation to list all your accomplishments: while the assay you developed deserves pride of place in your resumé, you can probably leave out the time you took minutes for a departmental meeting. Less is more.
It goes without saying that you should adapt your resumé to each position you apply for, focusing on the experiences and accomplishments that most closely match the job requirements. When crafting the accompanying cover letter, avoid duplicating the content of your resumé. Instead, aim for a couple of short paragraphs that reveal something about what you want and who you are.
For still more detail about the fine points, check out this compendium of resumé mistakes to avoid, while this article on crafting a professional resumé can help you neutralize red flags such as a lack of experience or a gap in your employment history.
Phoning it in
Phone interviews are like the door to the waiting room: a mechanism to control the influx of candidates and weed out those who don’t meet basic requirements. In the wake of the Covid-19 pandemic, phone interviews may enlarge their scope and replace some interviews that used to occur in person.
Have your resumé and a few key points at hand so the interviewer’s questions won’t catch you off-guard. It’s also a good idea to prepare some questions of your own, which signals seriousness of intent. Avoid bringing up salary—such conversations are best left for face-to-face meetings—unless specifically asked.
In addition to confirming your qualifications, a phone interview gives the interviewer a glimpse of your professionalism. Choose a quiet space for the interview (or ask a family member or neighbor to take the dog out) and turn off all electronic devices. During the interview, speak calmly and clearly and avoid jokes or sarcastic remarks—this is not the time to show off your edgy humor. And don’t even think of eating anything, let alone chewing gum. To make sure you avoid such gaffes, check out this list of 10 phone interview tips.
Acing the Interview
In the post-pandemic world, face to face doesn’t necessarily mean in the same room—it just means that you and the interviewer(s) can see each other. At this stage, consider “well groomed and well dressed” to be the price of admission.
Be ready to answer standard interview questions like “why are you interested in this job” or “where do you see yourself in five years.” To address the obligatory question about your weaknesses, focus on a deficiency you have overcome or are working to overcome. Think of the question as an opportunity to demonstrate both your honesty and your work ethic.
Most important of all, you’ll need to make a good general impression: fail at this task and you’ve lost the job. Fortunately, the key ingredients of a good impression—a positive and confident attitude—lie within everyone’s reach. If you’re unsure you can pull it off, rehearse with a friend or colleague.
Taking Setbacks in Stride
Learning you didn’t get a job after what seemed like a stellar interview counts among life’s most demoralizing experiences. While mentally steeling yourself for this outcome won’t take away the sting, it can help you recover more quickly and with your confidence intact.
It pays to remember that personal biases permeate all human transactions, and job interviews are no exception. That elusive quality called “fit” doesn’t always work in your favour. In some cases, a position may have been earmarked for an internal hire, but due diligence required it to go through a formal solicitation process. Of course, it’s also possible that you came off as more arrogant or boastful than you intended, and it never hurts to ask a friend for feedback on your self-presentation.
A job offer is only the beginning. What happens next can set the stage for you career.
Negotiating an Offer
You got the job! By all means convey your excitement to your new employer, but resist the impulse to immediately accept the terms of employment: the offer will not evaporate if you negotiate. When discussing compensation, don’t get stuck on the annual salary, as many companies offer bonuses and stock options to top up the base pay. If you come up against a hard compensation limit, ask for alternative perks such as flextime, option to work remotely, or support for continuing education. The fine points of negotiating an offer also include tackling one issue at a time and knowing who holds the decision-making levers.
If you’re already working but suspect your salary doesn’t reflect your worth, reach out to a recruiter to get feedback on industry norms. If you believe you’re being underpaid, you’ll earn your supervisor’s respect—and quite likely a raise—by stating your case. Presenting your accomplishments and knowing your boundaries will serve you well when negotiating a salary increase.
Fast-Tracking the Culture
Company culture, also known as organizational or working culture, refers to the attitudes and behaviors of a company and its employees. It encompasses ingredients such as work environment, leadership style, working style, and expectations. Figuring out the company culture as quickly as possible will help you fit in, feel comfortable, and work productively. To get a read of your new employer’s culture, look for the mission statement and client/employee testimonials on the company website. Most important, observe your co-workers: see how they dress, carry themselves, and interact. Figure out whether that happy-hour Zoom meeting is expected or optional.
Whether you’re working on-site or remotely, make an effort to build relationships with your colleagues. Showing the “real you” to people inspires trust. Even a single work buddy can help you integrate into the culture, and connecting with people outside your rank can help loosen the barriers between managers and employees.
There’s no shame in making strategic connections, either. Start with a focused “career talk” with your supervisor, which demonstrates commitment to your growth within the organization. Identify the key stakeholders in your new role and arrange to meet them. One of them could turn out to be the perfect mentor for you.
The Publishing Pressure Cooker
Scientific research has become a highly competitive endeavor. If you’ve chosen academic research as a career, sooner or later you’ll confront the “publish or perish” imperative. At the same time, rushing to publish can compromise the quality of your work. Indeed, a study of scientific publication determined that pressure to publish led to poorer-quality output and a bias toward positive results.
Fortunately, many experts have voiced concerns about the push to publish at all costs, suggesting the tide may be turning. As noted by Cambridge University researcher Kanad Mandke, “the slow science movement [an antidote to publication-oriented science]…is gaining a lot of traction among eminent scientists.”
While the pressure to publish isn’t likely to disappear anytime soon, a focus on quality over quantity and will serve you well in the long run. A methodical approach to getting published in scientific journals, as well as a set of strategies to manage the pressure, will help you stay sane along the way.
Graceful Exit
Even a dream job can lose its luster over time. New management, a new R&D direction, or even a new supervisor can tip the balance from great to not so great. Sometimes the whole work environment can turn poisonous over time. Signs of a toxic workplace include harassment, unaddressed conflict, and harsh top-down management that leaves employees feeling unheard and unappreciated.
If you’re wondering whether to stay or to go, consider these five reasons to switch jobs. At the same time, a vague feeling of dissatisfaction does not automatically signal a need to get out. A change of responsibilities, departments, or working conditions could help you recapture your enthusiasm. Respectfully approach your supervisor to explore such possibilities.
If you lean toward leaving, it may help you to contact a reputable biotech recruiter to gain insight into current market conditions. Aside from having deep industry connections, a good recruiter can alert you to career paths you hadn’t considered. Once you get a new job offer, your current employer may attempt to lure you back with a raise, a promotion, or all manner of promises. While flattering, such counteroffers rarely result in mutual satisfaction. Unless the counteroffer provides a clear fix to the problems that led you to look elsewhere, honor your instincts.
Hiring science talent is not for the faint of heart. All too often, that rare bird you rescued from the candidate slush pile turns out to be a common pigeon—or flies the coop well before your investment pays off. If you’re having trouble bringing in and holding onto the best people, these common hiring mistakes could be standing in your way.
Getting mired in generalities:
If you registered with a dating service and requested a “sincere person who likes long walks, good food, and travel,” you wouldn’t get very far. It’s too broad a filter to sort the wheat from the chaff. Similarly, terms such as “dynamic,” “hard-working,” and “flexible” won’t help you find the medical science liaison of your dreams. Specifics are your ally.
Prioritizing qualities that don’t matter:
Is a typo in a resume a good reason to disqualify a candidate? If you’re hiring a science writer, it may well be. If you need someone who knows her way around Petri dishes, however, insisting on a flawless resume could lead you to miss the perfect hire. Asking all interviewees to prepare presentations falls in the same category: not all positions call for this skill. The same goes for the much-valued skill of performing well in front of an audience—a common interview filter that, according to a new study by the University of South Carolina, could end up eliminating many well-qualified candidates.1
Relying on surface impressions:
Who doesn’t love a smiling candidate with a relaxed posture? The interview process tends to tilt the scales toward people who make a good impression, rather than those best suited to the job. It pays to remember that first impressions reflect not only an interviewee’s qualities but our own biases.1 Besides, a warm personality won’t help a biochemist develop a killer assay.
Overvaluing ambition:
The appetite to “move up in an organization” may seem an obvious asset, but an ambitious person may well decide to move away from the organization when greener pastures beckon. The scientist with an undivided passion for the lab bench, meanwhile, may offer a far greater ROI for your organization. As noted in a Science Magazine article about hiring PhDs, “hiring managers should appreciate that obsessing over a single topic can be a hugely positive quality, especially if you can hire the [candidate] to obsess over your company’s topic.”2
Making the interviewee feel uncomfortable:
Interviewers often seek to catch candidates off-guard with “gotcha” questions such as “Can you describe a situation you didn’t handle perfectly?” Or an employer may adopt a stiff and distant tone to send the message that “we’re interested in working hard around here, not in making friends.” Here’s the problem: the best candidates—meaning those you want to hire—tend to have options. If you make your organization sound like a distasteful place to work, a top-notch candidate may run with a competitor’s offer.
Relying on tired and inefficient interview formats:
The conversational interview remains a staple of hiring, but science hasn’t found much evidence for its effectiveness.3 To identify the best person for a job, you need to observe candidates through various lenses. Depending on the position you seek to fill, strategies could include behavioral interviews, psychometrics, or direct demonstrations of skills. Along similar lines, subjecting a candidate to a barrage of serial interviews, each covering the same ground, wastes valuable staff time without much additional yield. Sequential interviews with independent themes—overcoming challenges, teamwork, and long-term goals, for example—generate a much better ROI. By the same token, there’s no reason to include every member of a department in the interview team.
Arguably your most important hiring decision is your choice of recruiting partner. According to a Harvard Business Review article on outsourcing, about 40% of US companies rely on “recruitment process outsourcers” for their hiring needs.4 These intermediaries often subcontract people from distant countries to sift through candidates using key words—a blunt and impersonal instrument that can let superstars slip through the cracks. It’s exactly to avoid this outcome that Sci.bio hires recruiters with a scientific background, giving them a leg up in identifying the brightest lights. As the saying goes, “it takes one to know one.”
While neither your gut nor a software program will guarantee the best science hire, a systematic, multifaceted approach will work to your advantage. With a deep understanding of the science, psychology, and strategy of hiring, Sci.bio offers the layered intelligence that leads to outstanding hires. As Louis Pasteur once noted about science itself, fortune favors the well prepared.
In the ultra-competitive life sciences industry, there is a lot of pressure to avoid making a bad hire. A bad hire is a costly mistake that can slow down the research and damage the ever-important team dynamics. A bad hire also means a missed opportunity with the right candidate, who has likely gone on to another company by the time the bad apple is weeded out. And with the waning life sciences talent pool, companies can’t afford those missed opportunities.
So how do hiring managers, recruiters, and HR teams avoid a bad hire?
Research shows that a multi-pronged recruitment approach is the best way to avoid a bad hire. Instead of just relying on resumes and interviews alone, companies should include other components such as pre-employment testing. The general idea is that these tests can help employers predict how well a candidate will perform in a role and/or if the person is a good fit for the organization. There are quite a few types of pre-employment tests. The most common type is psychometric testing, which can provide information on behavioral traits and personality that are hard to capture from more conventional screening techniques. A skills test measures a candidate’s present level of job knowledge.
In the groundbreaking paper, “The Validity and Utility of Selection Methods in Personnel Psychology,” Frank L. Schmidt and John E. Hunter analyzed decades worth of talent selection data and proved the validity of these tests. The paper was first released in 1998, then updated in 2016. Their research shows the best predictor of job performance is general mental ability, which is measured through testing. Other predictors include work sample tests, personality tests, and structured interviews. Combining several of these methods only increases predictability of job performance. On the other hand, the research shows that a resume is a very low predictor of job success.
According to Joanna Bondin, director of a market research firm in Malta, psychometric testing is “an affordable and effective way for companies to ensure maximum ROI.” Bondin says that studies have also shown that psychometric analysis can improve outcomes by up to 24%. No wonder more than 75% of Fortune 500 companies use some sort of pre-employment assessment. This trend has led to the rise of third-party talent acquisition technology providers, a market that’s estimated to reach $113.9 billion in 2021.
Yet, there is still some concern about using testing in the recruitment process.
In Emma Goldberg’s New York Times article “Personality Tests Are the Astrology of the Office,” Darshana Narayanan, a neuroscientist, explained her skepticism of psychometric testing. “My impression of these kinds of tests is that they don’t work,” Dr. Narayanan said. “Human behavior is multifaceted and complex and dependent on your environment and biological state, whether you’re depressive, manic, caffeinated. I’m skeptical of what you can learn from answering ten questions or observing someone’s behavior for just 30 minutes.” She says this after having worked for a company that designs psychometric tests for human resource purposes.
Goldberg points out that Dr. Narayanan is a scientist, therefore she is trained to draw conclusions only after ample testing has taken place. This is quite the opposite to psychometric testing, in which a onetime test dictates the results. A onetime test that is often not monitored, which leads to another commonly cited pitfall of testing. There’s no way to know if a candidate has cheated if the test is administered ahead of time. Other articles have questioned the fairness of these tests, and whether they favor certain ethnic groups. Not to mention, many of these tests have scaled at rapid pace, leaving little opportunity for reassessment.
This rapid scale has led to what Ithaka S+R researchers call a “wild west” scenario in pre-employment testing, where regulation is minimal and validity and legality are in question. Schmidt and Hunter’s research was grounded in decades of scientific data reported on psychometric testing, but that’s not the case with many of these newer assessment tools. In their paper “Mapping the Wild West of Pre-Hire Assessment: A Landscape View of the Uncharted Technology-Facilitated Ecosystem,” the Ithaka S+R team explains that these new tests “have not yet demonstrated the validity of traditional assessment methods, and, even more problematically, they seem to eschew the grounded theory backing analog tests.” The team goes on to explain that “there is little to no peer-reviewed evidence for the predictive powers of many of these new tools.”
Despite the skeptics and the concerns, the use of pre-employment testing is not going anywhere. As the trend continues, experts will focus on creating and improving guidelines. In the meantime, there’s a few things to remember about pre-employment tests:
1. Use the tests in combination with other evaluation tools. The biggest mistake companies make is using these tests in isolation. Testing alone cannot measure every relevant aspect of a candidate. Schmidt and Hunter’s research proved that the best predictor of employment is a multi-faceted approach, such as using both testing and interviewing. The most important takeaway is that testing should be just one tactic of a comprehensive hiring campaign. The most common use is automating the initial screening process to filter out unsuitable candidates.
2. Do your research. There are thousands of tests out there, so it’s important to do your research before implementing any pre-employment testing. Decide what you’re looking for and consider how a test might help you achieve your goals. And, make sure you understand what the results mean. Human resources professionals are not usually trained in statistics and data analytics, which poses a challenge for optimizing the use of predictive and psychometric methods. Before pulling the trigger it’s important to make sure you know why you’re using the tests and how the data will help your business.
3. Track your success and adjust accordingly. As you use these tests in your hiring process, you should also evaluate how well they are working. When you are assessing job performance, consider how well that performance matches your predictions. Use that information to determine the effectiveness of the testing and decide what improvements could be made.
4. Leverage the data. Psychometric tests are commonly used for employee training and development purposes, yet there is much debate around this application of the test. Experts question if some of these loosely scientific tests should really be used to understand individuals. They also raise concerns about unintended consequences such as alienating or typecasting employees. However, the data could be useful when used in conjunction with other training and development measures.
In the fast-paced, highly volatile life sciences industry, there’s no time for bad hires. Pre-employment, predictive, and psychometric testing can be an efficient and effective way to alleviate such concerns. However, it’s important to remember that they do raise a host of their own concerns. So, know the limitations of these tools, but don’t let those scare you from implementation because pre-employment testing can be a worthwhile investment.
