At Singular, we believe that the secret formula to building a brilliant Biotech rests on three pillars: science, money, and people.  

Cost of a bad hire: image depicts a scientist pouring a chemical into a test tube.For most biotech founders, your skillset will lie in the science or the financial aspect of the business. But these two pillars can demand so much of your time and attention that developing your people and culture often get put on the backburner. Most Biotechs know that your people are critical to your success, but just don’t have the time or the necessary expertise to give that pillar the attention it needs.  

Ultimately, this is why many Biotech companies end up failing. Science stalling, or money running out, does of course present challenges, but we would argue that these can be overcome if you have a strong team behind you and a vibrant company culture. 

Tom Froggatt, Founder & CEO of Singular, sheds light on the three pillars to building a brilliant Biotech, highlights the true cost of a bad hire and explains why nurturing your people is the key to Biotech success. 

You can also watch our latest webinar on the topic here.

Pillar 1: Science 

Successful Biotechs are built on more than just functional science. While efficacy is crucial, what truly sets apart exceptional companies is their ability to address significant unmet needs or to move the needle in terms of treatment options available for people. Incremental progress is not enough; it’s about making substantial advancements that have a real impact on patients’ lives. This dedication to transformative science forms the cornerstone of any successful Biotech endeavour. 

Pillar 2: Money 

Financial backing is, of course, vital in the Biotech industry, especially for therapeutic companies facing lengthy development timelines before generating any revenue. Without sufficient capital, even the most promising scientific discoveries risk languishing in the lab. Navigating the complex landscape of fundraising is a skill in itself, requiring strategic planning and astute financial management. 

Pillar 3: People

While founders often excel in science or finance, nurturing a talented team and fostering a positive workplace culture can be challenging. But neglecting the human element in Biotech ventures can be highly detrimental to success. Making the wrong hires can incur significant costs, both monetarily and in terms of productivity and morale. Additionally, losing valuable team members not only disrupts operations but also erodes institutional knowledge and camaraderie. 

How much will a bad hire cost your business?

There are both tangible and intangible costs of neglecting people and culture within Biotech companies. From the financial burden of bad hires and employee turnover to the strain on productivity and team dynamics, the repercussions are far-reaching. Disengaged employees not only contribute to absenteeism and decreased productivity but can also stifle innovation and hinder progress. 

1. Financial cost 

On average, the estimated cost of a poor hire for a Biotech is just under £40,000. However, this is based on the UK average wage in Biotech (£47,500) which is calculated taking into account companies of various sizes, including much larger ones with more junior employees. For those operating within the seed to Series B biotech category, where average salaries tend to be notably higher, the real financial cost of a bad hire is likely much greater.  

2. Wasted time 

Beyond the monetary implications, there are additional costs associated with the management time expended on recruitment and training. A subpar hire not only affects the person’s own productivity but also places strain on the entire team, with other team members having to compensate and pick up the slack. Moreover, such hires can introduce disruptions and exert a significantly negative impact on teamwork and morale. 

3. Performance dynamics 

Extensive research has explored the repercussions of poor performance within high-performing teams. Contrary to initial theories suggesting that placing an under-performer in such a team would elevate their performance, the opposite typically occurs, with the team’s standards as a whole often diminishing instead.  

4. Turnover 

Employee turnover also carries substantial monetary costs. According to HMRC, the average cost of losing an employee in the UK amounts to £30,000. Considering that Biotech salaries typically exceed the national average, this figure is expected to be even higher within the industry.   

In a smaller company, you can’t really afford to build redundancy into your business plan. But this means when someone leaves, they often take their knowledge with them. Businesses tend to always start recruiting too late; oftentimes, you don’t end up replacing a person until well after they’ve left. This means you not only lose the departing employee’s intellectual capital, but the delay in replacing them can cause significant disruption to workflow continuity. 

5. Disengagement  

Even if employees decide to remain with the company, the effects of employee disengagement cannot be overlooked. Disengaged employees can incur significant costs to Biotechs, amounting to approximately £3,500 for every £10,000 earned. This is primarily driven by higher rates of absenteeism and reduced productivity. So, even if people aren’t leaving your company, if they’re not engaged and they’re not highly productive, then they will still be impacting your overall performance. 

The power of engagement 

All of this serves to highlight the importance of nurturing a motivated and committed workforce. Fostering high levels of engagement within your team can yield substantial benefits. Studies suggest that highly engaged teams can be up to 40% more productive than their less engaged counterparts. This increase in productivity translates into accelerated achievement of milestones, offering substantial advantages for your organisation. 

In monetary terms, the rewards of team engagement are significant. According to data from Q3 2023, the average fundraising amount for UK venture capital (VC) funded Biotech companies stood at £18.2 million. By enhancing team engagement, you stand to capitalise on this potential windfall, further reinforcing the importance of prioritising employee morale and involvement in achieving organisational objectives. 

Science, money, people: a winning formula 

For Biotechs, success hinges on more than just scientific breakthroughs or financial prowess. It requires a holistic approach that prioritises both innovation and human capital. By investing in excellent science, securing adequate funding, and nurturing a team that is not just talented but truly engaged, Biotech companies can chart a course toward meaningful impact and sustainable growth. 

For a detailed look at the 5 keys to building a brilliant Biotech, check out our latest webinar here.

 We can help you build a brilliant team 

At Singular, we know that your work is too important to be delayed by people issues. We provide Biotechs with a highly experienced and cost-effective Chief People Officer solution to help you build, engage and develop your team, leaving you to focus on developing drugs to help patients and save lives. Find out more about our People Partnerships here.