The U.S. life sciences industry has undergone a pivotal reset this year. Hiring has cooled, investment patterns have normalized, and federal research funding uncertainty is reshaping planning cycles. And yet, wages continue to rise, productivity is up, and companies are accelerating digital transformation efforts.
The result is a sector that’s becoming leaner, more specialized, and more directly shaped by the relationship between technology, talent, and regulation.
A Mixed Employment Picture
Workforce trends vary widely by region and subsector. In the Western U.S., the medical device and equipment subsector has emerged as an employment accelerator. However, the nation has outpaced this region in terms of job growth in many other subsectors, including pharmaceuticals, industrial biosciences, and bioscience-related distribution, according to the TEConomy Partners analysis of U.S. Bureau of Labor Statistics data.
The life sciences industry as a whole is seeing lower hiring volumes, prompting leaders to focus on upskilling and reskilling current talent.
Productivity and Wages Are Rising
Since 2022, wages across life sciences have surged at double-digit rates and remain well above private-sector averages. Companies are paying for deep expertise and getting more value out of every role.
Productivity gains, even amid selective job cuts, highlight tighter processes, better quality systems, and widespread adoption of digital tools that enhance efficiency.
Capital Markets Reset
Life sciences investment has settled into a more measured rhythm. Capital flows have rebounded from earlier declines in 2022 and 2023, but investments are on pace to come in lower than in 2024. Medical device-driven innovation is capturing a larger share of attention and investment.
Early-stage activity remains present but more selective, with rising expectations around validation and clear market pathways.
Federal Funding Uncertainty Is Emerging
NIH funding remains foundational to the nation’s research engine, fueling discovery, talent development, and translational pipelines. But the volume of terminated and at-risk awards in 2025 signals turbulence.
Fewer grants may mean fewer early-stage projects, constrained lab capacity, and disruptions to industry-academic collaboration. In response, organizations may consider diversifying funding strategies, building internal bridge resources where possible, and strengthening commercialization pathways that propel discoveries forward even when federal cycles fluctuate.
Workforce Dynamics: Less Volume, More Skill Depth
Life sciences companies report softer hiring but greater success filling critical roles as they shift from volume growth to strategic capability building. Leading firms are embedding AI, machine learning, and automation across R&D, production, and distribution.
According to TEConomy Partners and LSWC, the skills stack shaping the industry now includes:
- Digital and data: Experience with AI, data science, programming languages, governance, warehousing, cloud analytics, enterprise platforms, and CI/CD pipelines.
- Quality and compliance: Familiarity with product quality, good clinical practices, patient safety, process control, clinical operations, and continuous improvement.
- Systems and operations: Strong grasp of systems engineering, process and project management, predictive maintenance, and cross-functional collaboration.
Companies are also investing earlier in the talent pipeline, expanding STEM partnerships and experiential learning programs to ensure tomorrow’s workforce is equipped for an increasingly data-driven and regulated environment.
Current Strategic Priorities for Life Sciences Leaders
- Strengthen device-driven advantages: Medical devices remain a standout performer. Reinforce supply chains, regulatory readiness, and advanced manufacturing to capitalize on momentum.
- Institutionalize productivity gains: Integrate digital workflows, expand automation thoughtfully, and upskill teams to sustain higher value per role.
- Proactively manage federal research volatility: Diversify funding approaches, build coordinated plans for at-risk NIH grants, and tighten industry-academic transitions.
- Make skills strategy a top-tier priority: Data fluency, quality systems mastery, and systems thinking must become baseline competencies across your organization — not niche expertise.
Looking Ahead: What 2025 Signals About the Future of Life Sciences
While 2025 brought challenges for the life sciences sector, it has also created opportunities for future growth. Productivity and wages continue to rise. Capital is available, though more discerning. And companies are reshaping their operations around technology, compliance, and specialized talent.
The coming year will reward organizations that move with clarity and conviction. Those that build operational excellence, deepen talent pipelines, and capitalize on high-performing subsectors will not only weather uncertainty — they’ll set the pace for what comes next.
Ensure your organization is prepared to grow, scale, and thrive in 2026. Connect with CBIZ to explore solutions designed for the life sciences sector.
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