Why life sciences leaders are rethinking the FSP model

Roughly two decades ago, many life sciences leaders turned to Functional Service Provider (FSP) models as a smarter way to access specialist clinical talent without adding permanent cost. For a time, the model delivered exactly that. But fast-forward to today’s $20 billion market, some are finding that the very structures designed to improve agility are now adding new layers of complexity.

For life sciences leaders, the question is no longer whether to use FSP, but how to rethink it to deliver greater control, flexibility, and value. As a result, FSP is entering a new phase; one less focused on scale alone, and more on how it is designed and delivered.

From solution to refinement – how the model is shifting again

FSP was created to solve a specific challenge: accessing specialist clinical capability without increasing permanent cost and complexity. It proved highly effective and scaled quickly across global programmes. But as it grew, delivery became heavier, introducing additional layers, higher costs, and reduced flexibility.

By the time FSP became the $20 billion strategic pillar of modern clinical development it is today – now estimated to reach $38 billion by 2035 – many of the firms that invented it had been acquired or absorbed into larger organisations. Today’s clinical environment is fundamentally different. The UK’s STEM talent pipeline is narrowing as hiring becomes more complex, with wage inflation and higher employer National Insurance Contributions making permanent recruitment more expensive. Workforce models are leaner, with sponsors actively reducing fixed headcount in favour of more flexible external capability.

At the same time, demand is broadening, and FSP is no longer the preserve of pharmaceutical giants alone. Mid-sized and venture-backed biotech organisations are also adopting FSP to scale without building headcount, while maintaining close control over their assets.

Technology, of course, has also evolved. Sponsors now operate sophisticated platforms and data environments. The requirement is no longer for providers to bring systems, but to supply highly skilled professionals who can operate them effectively.

Overlaying all of this is increasing regulatory scrutiny, with the tightening of IR35 in the UK meaning a provider's ability to deliver a genuinely compliant, direct-employment infrastructure has become a non-negotiable requirement.

Together, these shifts are bringing FSP back to its original purpose: delivering flexibility without sacrificing control.

Delivering FSP differently

Meeting the industry’s new demands requires a different approach. Historically, organisations were forced to choose between specialist expertise and global scale. That trade-off is now becoming less relevant, and the ability to combine global employment infrastructure with deep functional expertise is emerging as a clear differentiator.

Leaders want cost clarity, not layered pricing. They want continuity of talent, not constant churn. They need global scale, but without unnecessary complexity. And they expect partners who operate as a genuine extension of their organisation, not alongside it.

At Hays, we are seeing growing demand for this model. By bringing together compliant, multi-country employment frameworks with dedicated life sciences expertise, it becomes possible to deliver embedded teams that align fully with client systems and ways of working. The result is not a new form of outsourcing, but a more precise and effective version of FSP, aligned to the realities of today’s clinical environment.

Rethink your strategy

In many ways, the story of FSP has come full circle. What started as an experiment over two decades ago has finally reached its initial promise: greater transparency, closer sponsor alignment, and more effective delivery at scale.

The industry no longer must choose between the compliance of a staffing specialist and the scale of a CRO. Instead, today’s life sciences leaders now face a more strategic question: what workforce model will best support the next phase of clinical innovation?

Speak to our team to find out how Hays is helping life sciences organisations rethink workforce strategy for a more complex clinical environment.