The healthcare industry is facing a massive talent shortage. While the broader job market is now starting to recover from the ‘great resignation’ that followed the pandemic, turnover rates in the healthcare sector are still above 2019 levels.
Among all the stakeholders affected, health tech startups are facing the biggest challenges when it comes to talent acquisition.
“The pandemic thrust the life sciences very much front and centre as a hot topic, and we’ve seen that in terms of the number of startups coming onto the scene,” says John Bethell, Director and co-founder of LUKA BIO, a recruitment firm specialising in life science and biotech startups.
“One of the problems with fast-growing sectors is that the supply of highly skilled talent doesn’t often keep pace with the demand,” he added.
Hiring the right people can make or break any startup. Health tech startups face the additional challenge of looking for candidates with a very specific set of skills, often at the intersection of biology and technology. This means they have a very small talent pool to tap into.
“These companies have the need for a skill set that either does not exist in the market or not at the volume that you really need to supply the entire startup ecosystem,” Bethell explains.
In addition, health tech startups have to compete for this scarce talent pool not just with well-established firms in the healthcare sector, but also with tech companies across all other industries.
This competition gets even harder when funding is also scarce. In 2023, funding for digital health startups hit the lowest levels since 2019.
To survive in such a bleak market, these startups need to evolve along with the changing landscape and hone in on their talent acquisition strategies.
Hire like a pro
Founders of health tech startups often get training on marketing skills and on how to pitch to investors. However, they don’t typically get trained on how to recruit systematically.
“My first and most pointed piece of advice to startup founders is: learn to recruit,” says Bethell.
Learning to use ‘proper’ recruitment tools is the first step. Bethell considers it is a big red flag if a founder solely uses Google Docs and their inbox as their recruitment tools.
“There are plenty of really cheap, excellent, easy to use, easy to implement tools that not only will make your process more efficient and more effective, [but] they’ll also teach you how to recruit because they enforce having a process in place.”
A key skill that startup leaders should learn is how to identify and reach out to potential candidates. However, this remains outside the comfort zone of many startup founders.
“This notion that you can rely on advertising is a very antiquated one in this day and age. If you have specific skills that you need to bring into your business, you need to go out and look for them,” Bethell explains.
He adds: “At any given time, only 20% of the potential talent pool is actually looking for a job, and usually the best people are not looking for a job anyway because they’re happy and functional and successful where they are. You need to take that leap and actually reach out to people.”
Startups also have to come to terms with the fact that the perfect candidate with all the qualifications and experience they are looking for may not exist. A candidate’s attitude can be a much better predictor of their future performance than their experience, says Bethell.
“A person who has less experience but a better attitude will outperform an experienced but less motivated employee every time. Looking outside the box and taking a risk on people who have the right attitude and cultural fit is always a good idea.”
Finally, looking after all candidates during the recruitment process is also essential to cultivate the company’s reputation and establish a successful hiring strategy in the long run.
“If you have 50 applicants and you hire one, that’s 49 people who are going to be rejected by you. If you don’t do that well, that’s 49 people that are going to say bad things about you in what is almost inevitably a very tight market,” says Bethell.
Adapt to a remote work culture
The Covid pandemic has led to massive shifts in the way recruitment is done in the industry. One major change Bethell has come across is that candidates are increasingly reluctant to relocate for a new position.
“When there’s talent shortages, the candidates have the power,” he says. “This is putting pressure on startups, and all employers now have to seriously consider remote employment as an option.”
This often means not just remote work but also remote interviews. During and after the pandemic a lot of startups had to start working with new hires without ever having a chance to meet them in person and getting to know each other. And without a proper system in place, remote interviews can make the whole recruitment process much longer.
“One thing that I learned over the years is that recruitment is a process that works best when it moves swiftly,” says Bethell.
While implementing remote recruitment and work options can be challenging, it can also help startups access a larger talent pool with a more diverse set of skills and personal experience.
Grow along with your talent needs
Over the years, the talent needs of a startup naturally grow and evolve. This is a key factor that founders and managers need to take into account early on so they can be ready to create and fill new positions as their company’s needs change.
“It is a cliché, but it’s very true: the life sciences is first and foremost a people business,” says Stephan Christgau, Managing Partner at life sciences investment firm Eir Ventures.
Investors like Christgau will take a close look at a startup’s team when deciding whether to invest in them. They often look for a team that is diverse in terms of expertise and has a balance between scientific knowledge and the ability to ‘get stuff done’.
“We’re looking for an experienced and balanced team, with as many areas of expertise covered as possible, but we accept that in the early stage companies will have small teams,” says Christgau.
“However, you have to be aware of which areas of expertise you want to expand into, and have a plan for how you’re going to engage those competencies to get the company where you want to.”
Retain your top talent
“Once a talented person has committed to join your business you want to make sure you keep them,” says Rowan Gardner, serial entrepreneur and co-founder of health tech startup PrecisionLife.
Talent retention is a priority for Gardner — and it should be for any health tech startup given the amount of money, time and resources it can take to find the right candidate and onboard them into their new position.
She believes that to retain employees, it’s important to make sure they find satisfaction and enjoyment in their work and to give them a sense of what their development potential is within the organisation.
For example, PrecisionLife has teams that work in sprints — a short period of time where a specific set of tasks have to be completed. During each sprint, a different member of the team will take the lead, meaning everyone gets an opportunity to develop their leadership skills and gain first-hand appreciation for the challenges of leading a team.
“The wonderful thing of working in a startup, as opposed to a much larger organisation, is there’s a much stronger relationship between the work you do every day and the progress that a business makes,” Gardner explains.
“Not everyone can be a manager or have a long job title, but you want to develop the sense of ownership and responsibility for delivery within the organisation.”
Build an attractive company culture
Ultimately, creating an outstanding company culture can be the key to both attracting and retaining highly skilled talent, says Gardner.
Company culture consists of a set of principles that everyone in the organisation shares. Making them explicit helps employees understand what’s expected of them and — if done right — can make people proud of working for the company.
“I’m always delighted when people bring culture to the forefront because it really tells me that they’re going to care about their people and think about making them a priority,” says Bethell.
He sees recruitment as a war for a scarce resource — skilled talent — and company culture as one of the most effective weapons to fight with.
It may have become a cliché in the business world, but there is a lot of truth to the saying “culture eats strategy for breakfast,” according to Gardner. The best hiring strategy will lead nowhere if there isn’t a company culture in place that makes employees want to work for you.
Altogether, recruitment is a multifaceted challenge that all companies have to face. Upgrading your recruitment skills and following the advice of experts can only get you so far, concludes Gardner, because at the end of the day, a business has to be worthy of great talent in order to attract and retain it.