An ocean apart: why US life science professionals get paid more…

06/06/2016 | Posted by:

America has always tended to do things bigger — and when it comes to salaries, life sciences professionals in the US can generally expect to get a substantially bigger sum than their peers in Europe.

Life Science Professionals in the US

How big is the gap?

The Scientist magazine’s 2015 salary report found that on average, life sciences professionals make $47,664 more than their European counterparts, across both academic and industrial sectors. Nature magazine also finds evidence of a wage gap, with average US salaries in academia and industry at $70,000 and $115,000 respectively, compared with $60,000 and $80,000 in Europe (Nature 465, 1104-1107).

average-life-science-salaries-2014

So, if you’re a European life sciences professional moving to the USA you can expect a significant pay rise … and if you’re looking to employ a worker in the USA you should expect to pay more in order to get the employee you want.
And what causes the gap? Basic differences in the nature of the US biotech industry: it’s bigger and stronger, there’s more competition to win the right people, and yet at the same time the jobs on offer carry less security than they do in Europe.

A strong, competitive and fast-growing US sector

The biotech industry is flourishing in the US, and it’s creating stiff competition for the right talent. This is continuing to push up salaries for life sciences professionals, especially in biotech hotspots such as Boston, Massachusetts. With around $44 billion of capital ploughed into the US biotech sphere, many start-ups now have cash to compete for the best employees. The European biotech industry meanwhile has not seen this kind of capital infusion in recent years:

capital raised in 2014

Employment laws that change the game

One reason US companies need to pay higher salaries is that US employment law passes more risk on to the employee. The USA’s laws on employment follow an at-will doctrine where the employer can terminate the employment contract at any time. In Europe, employment contracts and restrictive labour laws make it harder to dismiss an employee. European employers are therefore taking on more risk in hiring an employee, and paying a lower salary indirectly offsets this risk.

In short it’s a trade-off: lower pay and more security in Europe; more pay and less security in the USA.

If you are looking to expand into the US, Foothold American can help you find, recruit and hire employees. We can advise you on salary, benefits and other compensation so you can offer a competitive package.