HUMAN STRATEGY SERIES – An Australian Perspective
“Australian companies with real ambition, realizing they could access the best talent anywhere on the globe, became very open to hiring executives in the US and Europe who could work remotely”
Michael Huberts, Executive Director at Coulter Partners, provides an Australian perspective on Executive Search and Leadership Consulting in the Life Sciences, Health and Tech sectors.
He explores the impact of the global Covid pandemic, the challenges of shrinking talent pools, government initiatives and investments, leadership diversity, digital health, and current trends.
Coulter Partners: How has the pandemic impacted senior leadership hiring in Australia, specifically in the Life Sciences, Health and Tech sectors?
Michael: After an initial pause on executive hiring at the beginning of the pandemic, clients adjusted fairly well to video interviewing and the overall pace of search returned and indeed picked up a little through 2021. As a substitute to in-person meetings, we saw an increased emphasis on due diligence and reference checking (official and unofficial) from our clients, as they sought additional data points when making hiring decisions.
The key takeaway we saw, likely bolstered by Australia’s strong immigration stance through the pandemic, was that Australian companies with real ambition became very open to hiring executives in the US and Europe who could work remotely. This wasn’t exclusive to Board roles (where the need for companies to access a particular market segment / geography has always existed) but extended to senior medical, operational and commercial positions as companies realized they could access and work with the best talent anywhere on the globe. This had previously been a trait with some of our tech and digital health clients, but it was pleasing to see this extend to some of our biopharma and medtech partners.
This is a positive trend, but we would stress the importance of Australian healthcare companies setting a diligent and committed onboarding process for these international hires (100-day plans, regular touch points, competency assessments and training). It’s important to build a “sticky” culture where executives feel welcomed and included and, with the past two years severely limiting international travel, we’ve seen the good companies invest a lot of time and energy into their onboarding processes to ensure successful hires feel part of the broader leadership team.
Coulter Partners: There has been significant recent global attention on changing behaviours in the global labour market and shrinking talent pools. What are your perspectives on the Australian Life Sciences, Health and Tech markets? Have you seen similar trends and if so, how are companies in our sectors overcoming the challenges of talent gaps?
Michael: I haven’t seen as much of a local “great resignation” as those I’ve read about in other markets. It’s a good headline but I’ve not seen any hard data supporting this in the Australian context. I think there was a hope that the pandemic might increase the “go-home” factor for some talented Australians living abroad but I have seen only a handful of examples and for every ambitious Aussie company that values global talent, there are many that are primarily focused on candidates with domestic experience. Having gone through ‘quarantine hotels’ myself on several occasions in the past few years (Michael lived in Japan for many years and calls both Melbourne and Tokyo home), I think there were plenty of strong candidates in Europe and the US that may have been held off the “go-home factor” until our borders opened up a little – perhaps we’ll see more mobility in the coming year?
Coulter Partners: If Australian companies have chosen to bring in a Board or senior executive in a geography outside of Australia, what are the common challenges they face?
Michael: Remuneration is the first and, generally most powerful, sticking point. A lot of money has flowed into the global healthcare sector and whilst Australia has seen some of this, a disproportionate amount of resource appears to have gone elsewhere (the US in particular). This has created a sense of inflation in global talent markets that hasn’t been replicated here. US Board Directors are commanding almost double what they would receive in Australia domestically and whilst every company needs to be prudent with their cash, if you’re an ambitious firm where success depends on access to global investors and markets, the rewards are nonetheless greater than those you might see by staying local.
Additional to remuneration, would be overall brand recognition for Australian companies (Europe and the US are significantly bigger ponds so unless you are a CSL or Cochlear, the company name is unlikely to cut through). We’ve seen a need for advisors and consultants with deep local networks who can advocate on behalf of Australian firms at the introductory stage – it’s a hot market and many executives are screening out approaches by companies they’ve not heard of.
Finally, we’ve also found that some executives based on the US East Coast can be a little concerned with the time difference to Australia and how that might affect their work life balance – the West Coast and European candidates tend to be less concerned by this.
Coulter Partners: The Australian government has, in the last few years, introduced several new initiatives across R&D, manufacturing and regulation, as well as increased investment and funding. Do you feel this is enough to attract global executives? Are Australian Life Science and HealthTech companies doing enough to compete on a global scale and maintain appeal to top talent?
Michael: I think the Australian Government (at both the federal and state level) have been quite active in investing in the sector and it’s certainly welcome in our relatively small market. I think initiatives around the R&D tax breaks and government investment into MRFF are excellent. However, for real growth that will attract global talent to our shores, I think we need to see more private sector investment to drive the industry further (ideally domestic but, as Covid shrunk the world to a laptop, why not from larger VC investors in the US, Europe and Asia?). Not only will this help attract the appropriate funding to afford world-class candidate salaries, but it will also allow senior executives to potentially relocate to Australia whilst remaining connected with the global investor communities they have strong networks with.
Coulter Partners: How are your clients addressing leadership diversity? How important is cultural alignment while still ensuring meaningful inclusion strategies?
Michael: Broadly I think the Australian healthcare industry is very aware and committed to promoting diversity in their boards and senior leadership teams and, in comparison to other geographies, I think we are one of the better performing countries. From my observations of the market, I’d say there is around 30% female representation at the Board level (almost dead-on with the national average) so there is clearly still more work to be done. What I’d like to see more of (and I think it’s already happening to some extent) is companies broadening their focus beyond the areas we typically associate with diversity and really starting to think about importing unique ideas and backgrounds that can open up new geographies and technologies. We want more Aussie success stories; the overall talent pool of local Board candidates (particularly as you move up the ASX) is quite limited. We have seen a lot of overlap of directors across companies in our sectors. Whilst this isn’t necessarily a bad thing, I think we increase the chances of producing more internationally competitive companies if we widen the talent pool and bring some new faces and ideas into the mix (either from outside Australia or from separate industries, technology being the most obvious).
Coulter Partners: Venture investments in digital health surged in 2021, and the government has pledged a further A$106mn earlier this year. To what extent do you think digital health is becoming a dominant force in the Australian Life Sciences ecosystem? Has the pandemic contributed to this?
Michael: To your second question, of course digital enablement has significantly expanded due to Covid, and this will only continue moving forward. Government investment is terrific but, as with biotech, Australia needs more private sector funding to really move the market. We’ve got a lot of digital health businesses but not many that are at the scale where they can go out and recruit the best available talent in the market. I hope this is corrected because I think the Australian digital health space could be really competitive if better funded – there is a terrific local community of innovators and entrepreneurs that would flourish with greater support.
Coulter Partners: What trends do you see regarding talent needs moving forward for the Australian Life Sciences industry?
Michael: I think we’ll see continued demand for executives who can lead businesses through critical milestones (Commercial CEOs and Chairs for maturing ventures, Chief Medical Officers for firms at later stage clinical, CFOs with IPO experience etc.) but I think the two new(ish) trends will be 1. increased demand for leaders with overseas experience (particularly the US which is such a major market for investment and commercial opportunities) and 2. the growth of digital health (not necessarily candidates currently running a digital health business, but rather leaders who are capable of positioning / evangelizing a product or service in the context of a broader healthcare model that is experiencing digital transformation). These are limited talent pools if you focus solely on the domestic market (i.e., Australia) but I suspect ambitious firms that look both locally and globally will be able to separate themselves from the field if they want to become the next star Australian healthcare business.