What You Need to Know to Woo, Win and Keep the Best and Brightest

These are nervous times in laboratories. Staff shortages abound and the workforce is aging, but the recession acts as a defibrillator keeping the laboratory heartbeat humming as veterans postpone retirement. Acting to stem this shortfall and generate interest in science careers, the U.S. National Academies, to considerable fanfare, earlier rolled out a study calling for educational and policy reforms to ramp up the supply of domestic scientific and engineering talent, entitled “Rising Above the Gathering Storm.”

The storm has broken over America’s laboratories. Vexed by acute personnel shortages, medical labs have mobilized into a full-court press—lobbying and working policy levers to attract and retain talent, promoting their profession, and warning of the impact on quality care. Job vacancy rates exceed 50 percent in some states. New lab staffing models with less rigorous educational requirements are being floated.

“I think we have workforce challenges in front us that cannot be fully mitigated,” says consultant Paul L. Epner, citing demand from an aging population and a concomitant rise in testing that outstrips lab automation measures. Epner, who spent 31 years with Abbott Laboratories, helped create Abbott’s Labs Are Vital™ program to address the profession’s lack of public awareness, particularly the students it aspires to attract, most of whom are unaware that the profession is a career option.

Nearly 60 percent of the more than $4 trillion spent on global health care annually supports the clinical workforce, according to management consulting firm McKinsey & Company, and ASCP, like other groups, is pulling out all the stops to raise the profession’s visibility. Labs Are Vital “was not just about selling the profession to non-laboratorians,” says Epner, “but also about boosting a grassroots effort of lab professionals toward their own profession to improve self-esteem.” ASCP, ASCOF, COMA, AACC and APHL all pitched, says Epner, hoping to earn favorable publicity on word of mouth to attract up-and-coming talent. According to a survey by the Coordinating Council for the Clinical Laboratory Workshop—a coalition of about a dozen lab associations— conversations with friends or relatives are far and away the leading mechanism that sparks interest in a lab career.

The demand for true talent always exceeds supply. In a 2007 HR Priorities Survey by ORC Worldwide, nearly two-thirds of respondents identified talent management as their most urgent strategic issue. They have not been disappointed. With waves of workers at retirement age in industrialized nations, and increased competition from developing nations, it’s a seller’s market. As the war for talent intensifies, so does the weight on lab managers tasked with stroking high potential stars.

Workers, goes the old adage, don’t quit bad jobs—they quit bad bosses. Nor do they necessarily follow the money. In the great global game to woo and win scientific talent, more employers—most notably medical labs— are extending noncash motivators as the proverbial carrot. Attracting and retaining talent without pay increases is STAFING“absolutely” a discussion people are having, says Kathy Doig, associate dean at Michigan State University and a national leader in medical lab workforce issues.

“Too many approach the retention of key employees by throwing financial incentives” at rainmakers, says McKinsey. Studies show that money doesn’t buy their happiness, and there’s less of it to go around besides—many HR directors have pulled back remuneration expenditures by 15 percent or more, according to Forbes magazine.

Remuneration—the bargain between employer and employee—is an often fluid concept for lab talent. Human resource and management personnel were among the first to study happiness and contentment while trying to understand the linkages between worker satisfaction and workforce production and innovation. The underpinnings of this aspect of business behavioral theory are traceable to psychologist Abraham Maslow’s hierarchy of needs theory, and his contemporary Frederick Herzberg, whose research on the psychology of motivation is considered “HR 101,” according to Doig.

Herzberg’s theories may have been slow to get traction, but he left managers a dichotomy to ponder as his legacy: that which satisfies and motivates workers is quite different from what displeases them.

Job satisfiers, wrote Herzberg, “deal with the factors involved in doing the job,” whereas dissatisfiers “deal with factors that involve the job context,” or work environment. Salary, supervision, company policy and culture, and interpersonal relations are job dissatisfiers that can cause lab talent to rock the boat. Where the rubber really meets the road lies in satisfiers with the potential to engage and stimulate workers—challenge and achievement, recognition, responsibility, advancement, and the nature of the job itself. The ultimate expression of such engagement is the mental state of “flow,” which enhances performance and innovation.

Satisfiers have long-term positive results in attitude and performance. Adjusting dissatisfiers can produce short-term changes, but attitude and performance typically revert to previous levels. “Managers say, well, give them a raise,” says Dr. Robert Hernandez of the Mayo Clinic in Scottsdale, Ariz. “But that’s secondary. Give unhappy people a pay raise and you’ll probably have highly paid unhappy people.”

Employers strive to keep compensation packages competitive, but the majority of managers don’t have the freedom to authorize bonuses or raises. (At Genentech, managers can cut a check—a “Genencheck”—right on the spot to award employees.) While money is the routine starting point in the war for talent, a compelling variability between competing offerings for lab talent is found in the satisfiers, atmospherics and management’s approach to soft benefits—reward and recognition programs, flextime and work/life balance, career training and development, and assorted conveniences and services. Sometimes called total reward systems, this holistic approach attempts to go beyond money to more fully capture the employee value proposition, in HR-speak.

The use of nonmonetary techniques may increase transaction costs for managers. Cash is quick and easy; noncash motivators can be timeconsuming, touchy-feely, and require direct managerial attention. Time spent managing talent is time lost managing lab operations, the measure traditionally used to evaluate and reward managers. Nor is top talent readily managed. “…if clever people have one defining characteristic, it is that they do not want to be led,” says a Harvard Business Review white paper that draws on science-based operations. “This clearly creates problems for you as a leader.” The clever “want a high degree of organizational protection and recognition that their ideas are important” and “the freedom to explore and fail,” and they “expect leaders to occupy their intellectual plane, while not eclipsing their talent and skills.”

Building on HR theory, anecdotal experience, best practices and incoming empirical data, more managers are honing skills to attract and retain staff without pay increases. Instead of a systematic or one-size-fits-all approach, managers need an array of arrows in their quivers when hunting for talent. Different workers respond to different motivators.

Many workers in medical labs feel undervalued and respond to recognition and appreciation, including from colleagues. McKinsey reports that praise and commendation from immediate managers was the most effective nonfinancial incentive across all industry sectors, followed by attention from leaders and the opportunity to lead projects or task forces.

Headhunter David G. Jensen, managing director, Kincannon & Reed Global Executive Search, recommends “The 7 Hidden Reasons Employees Leave” by Leigh Branham, which, Jensen says, convinced him that “this book was written with the biotechnology and pharma industries in mind.” Branham, who says that compensation issues are responsible for just 12 percent of employee defections, lays out the following “hidden agendas” that recruiters exploit to poach talented malcontents:

• The job or workplace was not as expected
• A mismatch between the job and person
• Too little coaching and feedback—more managerial attention, or mentors, for new employees
• Too few opportunities for growth and advancement—overseas rotations are valued, but reentry and repatriation can be problematic
• Feeling devalued and unrecognized
• Stress from overwork and work/life imbalance—mothers want time for family
• Loss of trust and confidence in senior leadership

“Progressive labs pay attention to their retention,” says Hernandez. “But if we push productivity too hard, we pay with increased turnover,” he warns, recalling a driven colleague in a community hospital lab bemoaning his 90 percent turnover. Additionally, managers who don’t address “staff who are not competent or safe can be very demoralizing to good workers,” he adds.

New research throws light on related HR challenges. Henry Sauermann of Georgia Institute of Technology’s College of Management studies whether science PhDs prefer careers in industry or academia, and “what makes them tick.” To avoid mismatches, Sauermann says managers should take pains with potential employees to convey the company culture, since it’s not readily discernable from the outside.

The intergenerational mix is another consideration. Many labs have four distinct generations working side by side: Millennials born after 1980; Gen Xers in their 30s and 40s; Baby Boomers in their 50s and 60s; and the Silent Generation in their mid-60s and beyond.

Generational theory proposes that each generation has distinct values and preferences that managers must recognize and reconcile. Whereas the Silent Generation and Boomers are respectful of authority, Gen Xers are more impressed with competence. Millennials and Gen Xers want work-life balance and personal freedom; Boomers, recognition.

“Internal equity is very important for many institutions,” and limits flexibility in monetary rewards or paid time off, says Carmen Wiley, co-director of chemistry and immunology at Providence Sacred Heart Medical Center and PAML in Spokane, Wash. So Wiley advocates allowing for generational differences, perhaps permitting Millennials and Gen Xers to wear iPods at the bench, “or maybe make your Boomers more comfortable” by instituting basic dress codes for younger generations to adhere to.

A 2009 Deloitte Consulting LLP report on “life sciences R&D talent strategies” in emerging markets predicts management will be challenged to recruit and retain talent in R&D hotbeds like India and China, where Deloitte says a widening supply-and-demand gap and mismanagement have created turnover rates of 30 percent to 45 percent in CRO and pharma operations, and employee satisfaction numbers in the single digits. Companies “must avoid the pitfall of focusing only on paying more.”

Not the Money

A growing body of empirical research, supported by input from industry observers and placement firms, is taking the mystery out of how to attract and retain R&D talent and defying conventional wisdom about the allure of money.

Mismatches between employee expectations and the promises and true culture of the workplace—likely the primary reason scientists lose interest and change jobs, say researchers and headhunters—can be minimized by a thorough, two-way interview process on the front end.

After studying more than 5,000 scientists in industry and academe, Henry Sauerman of the Georgia Institute’s College of Management confirmed the stereotype that academia attracts scientists with a greater “taste for science,” but cautions that individual preferences for other job attributes differ widely and should be ferreted out during interviews.

Earlier studies on the reward preferences of scientists (Kochanski and Ledford; Chen, Ford and Farris) indicate the value of the total workplace offering to entice talent and the lesser appeal of money.