• According to data published by the UK Bioindustry Association funding for UK life science business has reached a 10 year high. At the same time recent reports based on the ONS Labour Force Survey 2014-15 indicate that the industry faces an imminent succession planning time bomb.

    It is estimated that in life sciences there are 28% more employees aged 40-64 than 16-40. 70% of life science businesses have reported difficulties in recruiting for key skilled positions. Most concerning is the estimate that there could be a shortfall in employees retiring versus joining the sector over the next 10 years of around 17,000. The combination of funding boom times and a potential succession time bomb make retaining your existing key staff a key priority and challenge.

    So how do you ensure that you succeed in the current battle for talent?
    In this article we look at a few of the options to improve employee retention that come with an employment law focus:

    • deferred remuneration schemes
    • enhanced redundancy/maternity/parental leave schemes; and
    • restrictive covenants

    Deferred renumeration schemes

    Deferred remuneration schemes normally consist of materially valuable annual or periodic bonus schemes with payment deferred several months and possibly years into the future with the requirement to be employed (and not under notice) at that future payment date. These schemes work because by the time an employee is eligible for 2014’s bonus, by mid-2015, they have also in theory built up a significant period of service and effort towards 2015’s bonus, which will be lost if they leave.

    More complex and often long term buy in and retention can also be achieved through employee share option schemes which commonly run over several years before vesting and thus delivering maximum return.

    Enhanced redundancy/maternity/paternity schemes

    Creating enhanced redundancy terms can also represent a significant retention benefit. Employees sitting on a significant golden parachute based on enhanced redundancy terms are less likely to leave in times of uncertainty.

    There is, of course, a cost to this option should the need for actual redundancies arise. It is also debatable in boom times how much of an incentive this protection will be.

    Other options to enhance retention of key staff can include creating enhanced maternity pay or parental leave pay schemes based on returning to work for a minimum period of time post maternity or shared parental leave periods.

    Restrictive covenants

    Restrictive covenants, i.e. contractual restrictions preventing an employee from joining a competitor for a period of time can also have a positive influence on employee retention as well as protecting the business from the significant risk of harm posed by a key employee leaving to work for a competitor. For more information on this are please see our fact sheet on restrictive covenants.

    Of course, ultimately, the factors that enhance employee retention and motivation are diverse and often person specific and include a much wider variety of influences and factors contributing to employee satisfaction. However, the above options, properly developed and deployed, represent useful weapons in an employers’ retention and motivation armoury.

    Can we help?

    Take a look at our Life Sciences page for useful information, resources, guidance, details of our team and how we may be able to help you