Over the past two years, the biotech sector has weathered a difficult correction. Funding constraints and pipeline reprioritizations have led to waves of layoffs, creating leaner teams across the industry. Yet even as companies downsize, the need for specialized expertise has never been greater. The result is a widening talent gap – one that threatens productivity, continuity, and innovation.

Leaders at small and mid-sized biotech companies are being forced to make tough decisions: how to preserve institutional knowledge, sustain development momentum, and remain competitive with limited internal bandwidth.

Here are five takeaways for companies navigating this new workforce landscape:

1. Prioritize Core Expertise, Outsource the Rest

Not every role needs to be rebuilt internally. Identify which functions are critical to your intellectual property, regulatory strategy, or investor value story – and consider trusted external partners for everything else. Strategic outsourcing can allow you to execute on your business strategy while preventing burnout, reducing fixed costs, and ensuring continuity through development inflection points.

2. Reassess Organizational Design for Agility

Lean doesn’t have to mean overextended. Reassess how decisions have been made and consider if a smaller team could mean a more efficient approach, where bottlenecks exist, and which functions are duplicative. Flattening structures and empowering cross-functional project leads can help maintain momentum even with smaller teams.

3. Invest in Retention – Even When You’re Cutting Costs

After layoffs, there is often undesirable attrition, and the remaining team members often carry heavier workloads and higher stress. Retention depends on transparency, recognition, and growth opportunities. Simple actions, like reviewing and updating roles and responsibilities,  consistent communication about company direction, flexible work arrangements, or development stipends, can have an outsized impact on morale and loyalty.

4. Bridge Skill Gaps Through Partnerships and Interim Talent

Specialized expertise in areas like regulatory strategy, CMC, bioinformatics, and clinical operations is increasingly scarce. Interim or fractional experts can bridge capability gaps without the long-term cost of full-time hires, allowing your team to have the right level and amount of expertise as needed. If you are embracing a fractional model, look for experienced consultants or partner firms who understand biotech’s unique regulatory and operational nuances.

5. Revisit Workforce Planning Every Quarter

Embrace a just-in-time hiring model. While there is great talent in the market right now, hiring too far ahead of your needs can unnecessarily accelerate your cash burn. The market is shifting fast. What seemed essential six months ago may not be today. Building a rolling 3- to 6-month talent roadmap—aligned with your pipeline milestones and financing horizon—helps avoid reactionary hiring or deep cuts later on.

The Bottom Line

The biotech talent landscape is being reshaped in real time, but the need for great talent never goes away. In today’s environment, success will depend on strategic resourcing, organizational agility, and empathetic leadership. Companies that balance cost discipline with a thoughtful approach to people management will emerge stronger, more focused, and ready to capture opportunity as the market rebounds.

Danforth Health uniquely bridges both sides of the talent challenge — providing fractional experts to fill critical functional gaps. Our team can work with you to determine if a fractional resource is right for your business or if this is the time to invest in a full-time hire. Either way, we have the expertise and network to assess your needs, recruit the appropriate resources, and support their onboarding in a way that thoughtfully integrates them into your team quickly and efficiently.

Click here to schedule a free consultation about how we can support your talent needs.