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Article | Beyond Data

Keeping pay and employee benefits healthy in pharma and life sciences

By Beata Kaczynska-Lombardi | August 31, 2023

Effectively responding to fast-moving changes requires robust rewards strategies in the pharmaceutical and life sciences industry.
Compensation Strategy & Design|Ukupne nagrade
Beyond Data

The pharmaceutical and life sciences industry has quickly transformed in the past few years with new roles on the rise, changes in organizational structures and deepening talent deficits in areas that have been understaffed for some time. Additionally, M&A activity – which is expected to increase – is ramping up the competition for talent, and supply chain disruptions have kept the biopharmaceutical industry from reaching its full potential.

To respond appropriately and effectively, industry organizations must develop robust rewards strategies that not only meet employees’ demands but also mitigate rising costs. Following are just some of the strategies and areas of focus that organizations need to explore and develop to compete for talent and achieve business goals.

ESG, with an emphasis on people and planet

Life science organizations are not alone in their need to meet stakeholders’ demands for a focus on environmental, social and governance (ESG) initiatives. Along with demonstrating a commitment to solving ESG-related issues, setting ESG goals are helpful for attracting and retaining talent from a labor market that is increasingly keen to see social responsibility reflected in their organizations’ priorities.

Broadly, biopharmaceutical companies are increasingly setting ESG goals, with large, global firms leading the way. However, medium- and smaller-sized organizations also are looking at ways to integrate a bigger commitment to ESG initiatives.


Clinical trials are an area in which pharmaceutical companies will continue to invest. As such, we anticipate an increase in recruitment activities in this space. Life-science candidates are characterized by only moderate attachment to their current jobs; they are willing to be recruited. Because of the dynamic development of clinical trials, many companies are restructuring and reorganizing, leading to a sense of instability and discontinuity.

Recruiting new talent creates high costs for companies. To identify premiums paid in the market, we compared the compensation of recent hires vs. employees with longer service. In China, the difference is higher than in other Asian countries, and we have made similar observations in Germany and the U.S. In these countries, premiums seem to be linked to seniority but, contrary to what’s happening in China, these premiums don’t increase with the level.

Conversely, companies in Brazil do not offer any new-hire premiums, yet some jobs do stand out such as those in clinical research, medical writing, medical technology product development or pricing, and reimbursement. Higher premiums also are seen in roles like data analyst, real-world data or AI. This demand in the pharmaceutical and life sciences industry mirrors that of other industries where we also observe growing demand for and shortage of talent.


In response to a competitive job market coupled with inflationary pressures, many life sciences organizations have increased their emphasis on the nonfinancial elements of compensation or allocated additional funds for salary adjustments. Typical non-financial offerings include things like fringe benefits, language courses, global recognition programs, employee assistance programs and so on. It is unclear at this time which programs – whether financial or non-financial – will be kept and which are temporary.

Pay competitiveness

Across all geographies, biotech and contract research organizations (CRO) sub-industries remain the top payers within life sciences. Medical technology is still slightly below other sectors, except in the UK and Brazil. In China, pharmaceuticals is the best-paid sector among all pharmaceutical and life sciences organizations.

The pandemic significantly influenced the importance of specialization within therapeutic areas. Though oncology retains the highest volume of research and clinical trials, jobs focused on respiratory, immunology and central nervous system were the highest paid in 2022.

Flexible work arrangements

COVID-19 also forced companies to review their work-from-home policies. Most life science organizations opted for alternative or flexible work arrangements. About half are compensating or considering compensating employees for the cost of working from home. In most cases, all employees who work from home are entitled to compensation, but this does vary by function and job level (Figure 1).

Our research found that most companies buy or reimburse the equipment employees need to work from home or, alternatively, they provide allowances (Figures 2 and 3)

Company car benefits

Company car benefits policies are another hot topic for life science organizations. Fluctuations in fuel and electric prices, manufacturing delays, increased remote work, increased environmental awareness as well as tighter environmental standards are raising more questions about the value of company car programs.

Around the world, organizations are introducing more environmentally friendly vehicles to their fleets, and this trend is particularly escalating in Western Europe. Organizations plan to introduce CO2 emission ceilings on their vehicles and continue reviewing the car makes and models they offer. Also, decisions are being made on company car eligibility, with some organizations removing eligibility altogether for selected roles or employee categories. Finally, some organizations plan to introduce a choice between a company car and a cash allowance for car-eligible employees based on their status in the company, level or job needs.

Pay transparency

Companies also need to focus on pay transparency and pay equity. The EU Pay Transparency Directive requires companies to ensure they have defensible reward and talent management practices in place and are more transparent about pay. This topic is relevant for all organizations regardless of industry. The Directive covers four key areas:

  • Employees’ right to information including pay policies, pay rank upon hire and average pay of peers
  • Calculating gender pay gaps for the legal entity as well as on an employee-group basis
  • Disclosing pay gaps
  • Employer action to close pay gaps

The exact timing for these requirements is unclear, but most companies are preparing now as it can take multiple years to become compliant.

Of course, pay transparency must not be confused with pay equity. Rather, pay transparency means that any pay differences can only be based on objective reasons and not on any protected characteristics (e.g., gender, ethnicity, age, sexual orientation).

The pressure on companies to be more transparent about pay is increasing rapidly. In four to five years, all workers in EU member countries will have the right to ask employers how their pay compares to the average pay for men and women in the organization. In addition, another stakeholder group is putting pressure on organizations: investors. At any time, investors or rating agencies may ask a company to demonstrate how they are paying and whether they can explain the reasons for any pay differences. Organizations will need to answer questions like:

  • Do we have any pay differences we can’t explain?
  • Is the pay gap based on gender, ethnicity or any other protected characteristic?
    • If yes, what is being done to resolve the issue?

A healthy approach to rewards ensures a healthy workforce

The life sciences industry is constantly changing. In recent history, many of these changes have been triggered by the pandemic (e.g., work-from-home policies, supply chain issues) as well as environmental and regulatory pressures. Additionally, competition for talent has increased across all industries, with industry-specific roles also proving challenging for the pharmaceutical and life sciences industry. Specifically, digital transformation has increased the demand for digital skills, which has pitted the pharmaceutical and life sciences sector against other industries like technology, fintech and others.

Staying competitive while managing compensation costs requires compensation and HR professionals to stay current on market trends. Even as economic, regulatory and technological changes herald a new era in the development of total rewards programs that attract and retain talent, having the most current data and being aware of the latest trends in the marketplace will support the introduction of innovative programs and policies that support long-term business success.


Global Pharmaceutical and Life Sciences Lead, Rewards Data Intelligence
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