Christopher Delporte, Editorial Director10.09.14
The state of the medtech job market. It can be a tricky subject. Headlines in this publication as well as others shout out news of downsizing and just as often (if not more so it seems) announce companies expanding their workforces—“Biomet Expansion Plans to Create 150 Jobs” or “Boston Scientific to Cut 1,110-1,500 Jobs.” MPO’s People News column in each issue—and many more stories online at mpo-mag.com—include seemingly endless strings of news about new hires.
But headlines tell only part of the story.
For example, many critics of the medical device tax claim the tax has been and will continue to be a job killer. The Advanced Medical Technology Association claims—based on a survey the lobbying group conducted at the end of 2013 and reported early this year—the tax has resulted in employment reductions of approximately 14,000 industry workers and the forgone hiring of 19,000 workers since it went into effect at the beginning of last year. But what’s the net gain or loss for the industry as a whole? That’s a little more difficult to figure out.
According to a report released in August by London, United Kingdom-based Evaluate Ltd., a life-science market intelligence and analysis company, medtech employment overall remained steady in 2013 with most medical device makers experiencing an increase in their workforce. Of the top 15 device makers, only three experienced a reduction in head count and two of those drops were due to companies spinning off their respective pharmaceutical operations, according to Evaluate’s analysts. Excluding these divestments, the top 15 largest medtech firms grew their workforces by an average of 6 percent. Mergers and spinoffs typically drive employment trends in the medtech industry. In 2013, companies such as Baxter International Inc. and Stryker Corp. grew through multibillion-dollar acquisitions of other medtech companies. Baxter was the fastest growing among the top 15 companies in 2013 thanks, in part, to its acquisition of Gambro, adding 10,000 employees for a growth rate of 20 percent. Acquisitions, however, did not play a role for the second-ranked hirer, Intuitive Surgical Inc. Despite a tumultuous year with regulatory snafus to fix, the firm brought on 28 new salespeople in 2013, an increase of 30 percent.
“There were a few eye-catching acquisitions and divestments in 2013, but overall, medtech companies increased their head count slowly and steadily,” said Elizabeth Cairns, report author and EP Vantage medtech reporter. “The trend towards pharma spin-outs means large medtech is getting purer. And with several megamergers underway, we can expect to see much more drastic changes in device makers’ head counts in the coming years.”
Most recently, for the second quarter of this year, the global life-sciences hiring index (medical devices, pharmaceuticals and outsourcing) from ZRG Partners, a Boston, Mass.-based life-science-focused executive search and consulting firm, showed a mixed bag for the medical technology market.
“While hiring activity overall in the [life-sciences] industry took a slightly negative turn in the second quarter, the overall outlook remains very positive with 13 percent year-over-year gains, and 43 percent more activity than the index’s low point four years ago,” ZRG analysts wrote. “Outsourcing services are at an all-time high and … boast nearly 30 percent increases from a year ago.
Medical device companies continue to lag behind with a 9 percent decrease from the same period a year ago.”
Respondents to this year’s MPO salary survey—54.1 percent—said their business had grown during the past year, while 29.4 percent said it remained the same. A total of 40.3 percent are medical device OEMs or manufacturers of in-vitro diagnostic technology, while approximately 36 percent are contract manufacturers and service, material or equipment suppliers. A little more than 72 percent claim to feel secure or very secure in their current position, while 18.3 percent feel neutral. Only 4.6 percent feel somewhat insecure, while an equal amount feel very insecure in their roles at present. That security comes with a sizeable paycheck: Nearly 60 percent of those surveyed make more than $100,000 a year (more than 27 percent make more than $150,000 annually). This would seem to fit with why only 14.7 percent of those taking MPO’s survey said they were dissatisfied by what they think is inadequate compensation. However, 28.4 of those responding to the survey did not receive a raise last year. A total of 52.3 percent did make more than last year, but only 1-5 percent more. By contrast, the national salary average, for example, of a general manufacturing sales representative is $68,880 (according to 2013 figures from the U.S. Bureau of Labor Statistics [BLS]). According to BLS, the mean salary for biomedical engineers in 2013 was $93,960.
Average time spent in the medical device industry for this year’s survey takers is 16 years, with 81.6 percent holding a bachelor’s degree or higher. The mean age is 49.
While survey respondents reported a good wage and a feeling of overall job security—employers seem to be getting the most for their dollars and are drawing on their teams’ wealth of industry experience. One of the most frequent comments was that people are being asked to do more with less.
“I do more now than what I was hired for,” said one respondent. “The job has increased in responsibility ten fold.”
Another shared: “I’m doing a lot more. We’ve got open positions we can’t fill.”
Others noted shifts in job or technology applications, while some focused on how their roles have evolved.
“There’s more focus on wireless and mobile devices,” wrote one survey taker. “There’s always the need to keep up with advancing pace in technology.”
Yet another industry professional wrote: “I have been tasked to do a lot more with my title. I am now doing more with recruitment, and seeking new service leads as well as ramping up our training programs.”
Another respondent added: “There’s been more of a shift from shop-floor improvement to business operations improvement.”
Topics of most concern this year came as no surprise: the medical device tax, increased regulatory burdens in the United States and Europe (and the impact on funding and time to market), universal healthcare, and a fear that U.S. medtech dominance is sliding.
“It’s too costly to gain FDA (U.S. Food and Drug Administration) approval of Class III devices,” said a respondent. “With no compensation from Medicare or insurance companies, our industry must struggle to keep sales levels competitive.”
The FDA theme is a common thread in this year’s feedback.
“An underfunded/understaffed FDA being unable to test and approve new technologies in a timely manner is a serious concern,” wrote a survey participant. “There are great things ‘just around the corner,’ but it seems like the corner isn’t getting here any time soon.”
Yet another chimed in: “The FDA and many companies have become so wrapped up in preventing all risk that product development and innovation has come to a dead standstill.”
The ability to innovate—or lack thereof—also was mentioned.
One wrote: “There’s so much pricing pressure that it’s reducing innovation and choking R&D.”
“Technology has grown so rapidly that it is hard to keep up,” said a respondent. “I am afraid that people have about reached their saturation point and, in order to compensate, we now make new rules and guidelines to try to force people to use the technology.
Soon there will be a point where we say enough is enough and have to simplify the systems instead of expand them.”
OEMs aren’t innovating “at all,” fumed one survey taker. “Large OEMs are simply acquiring smaller startups, and that’s a scary innovation model if startups aren’t getting funding.”
But headlines tell only part of the story.
For example, many critics of the medical device tax claim the tax has been and will continue to be a job killer. The Advanced Medical Technology Association claims—based on a survey the lobbying group conducted at the end of 2013 and reported early this year—the tax has resulted in employment reductions of approximately 14,000 industry workers and the forgone hiring of 19,000 workers since it went into effect at the beginning of last year. But what’s the net gain or loss for the industry as a whole? That’s a little more difficult to figure out.
According to a report released in August by London, United Kingdom-based Evaluate Ltd., a life-science market intelligence and analysis company, medtech employment overall remained steady in 2013 with most medical device makers experiencing an increase in their workforce. Of the top 15 device makers, only three experienced a reduction in head count and two of those drops were due to companies spinning off their respective pharmaceutical operations, according to Evaluate’s analysts. Excluding these divestments, the top 15 largest medtech firms grew their workforces by an average of 6 percent. Mergers and spinoffs typically drive employment trends in the medtech industry. In 2013, companies such as Baxter International Inc. and Stryker Corp. grew through multibillion-dollar acquisitions of other medtech companies. Baxter was the fastest growing among the top 15 companies in 2013 thanks, in part, to its acquisition of Gambro, adding 10,000 employees for a growth rate of 20 percent. Acquisitions, however, did not play a role for the second-ranked hirer, Intuitive Surgical Inc. Despite a tumultuous year with regulatory snafus to fix, the firm brought on 28 new salespeople in 2013, an increase of 30 percent.
“There were a few eye-catching acquisitions and divestments in 2013, but overall, medtech companies increased their head count slowly and steadily,” said Elizabeth Cairns, report author and EP Vantage medtech reporter. “The trend towards pharma spin-outs means large medtech is getting purer. And with several megamergers underway, we can expect to see much more drastic changes in device makers’ head counts in the coming years.”
Most recently, for the second quarter of this year, the global life-sciences hiring index (medical devices, pharmaceuticals and outsourcing) from ZRG Partners, a Boston, Mass.-based life-science-focused executive search and consulting firm, showed a mixed bag for the medical technology market.
“While hiring activity overall in the [life-sciences] industry took a slightly negative turn in the second quarter, the overall outlook remains very positive with 13 percent year-over-year gains, and 43 percent more activity than the index’s low point four years ago,” ZRG analysts wrote. “Outsourcing services are at an all-time high and … boast nearly 30 percent increases from a year ago.
Medical device companies continue to lag behind with a 9 percent decrease from the same period a year ago.”
Respondents to this year’s MPO salary survey—54.1 percent—said their business had grown during the past year, while 29.4 percent said it remained the same. A total of 40.3 percent are medical device OEMs or manufacturers of in-vitro diagnostic technology, while approximately 36 percent are contract manufacturers and service, material or equipment suppliers. A little more than 72 percent claim to feel secure or very secure in their current position, while 18.3 percent feel neutral. Only 4.6 percent feel somewhat insecure, while an equal amount feel very insecure in their roles at present. That security comes with a sizeable paycheck: Nearly 60 percent of those surveyed make more than $100,000 a year (more than 27 percent make more than $150,000 annually). This would seem to fit with why only 14.7 percent of those taking MPO’s survey said they were dissatisfied by what they think is inadequate compensation. However, 28.4 of those responding to the survey did not receive a raise last year. A total of 52.3 percent did make more than last year, but only 1-5 percent more. By contrast, the national salary average, for example, of a general manufacturing sales representative is $68,880 (according to 2013 figures from the U.S. Bureau of Labor Statistics [BLS]). According to BLS, the mean salary for biomedical engineers in 2013 was $93,960.
Average time spent in the medical device industry for this year’s survey takers is 16 years, with 81.6 percent holding a bachelor’s degree or higher. The mean age is 49.
While survey respondents reported a good wage and a feeling of overall job security—employers seem to be getting the most for their dollars and are drawing on their teams’ wealth of industry experience. One of the most frequent comments was that people are being asked to do more with less.
“I do more now than what I was hired for,” said one respondent. “The job has increased in responsibility ten fold.”
Another shared: “I’m doing a lot more. We’ve got open positions we can’t fill.”
Others noted shifts in job or technology applications, while some focused on how their roles have evolved.
“There’s more focus on wireless and mobile devices,” wrote one survey taker. “There’s always the need to keep up with advancing pace in technology.”
Yet another industry professional wrote: “I have been tasked to do a lot more with my title. I am now doing more with recruitment, and seeking new service leads as well as ramping up our training programs.”
Another respondent added: “There’s been more of a shift from shop-floor improvement to business operations improvement.”
Topics of most concern this year came as no surprise: the medical device tax, increased regulatory burdens in the United States and Europe (and the impact on funding and time to market), universal healthcare, and a fear that U.S. medtech dominance is sliding.
“It’s too costly to gain FDA (U.S. Food and Drug Administration) approval of Class III devices,” said a respondent. “With no compensation from Medicare or insurance companies, our industry must struggle to keep sales levels competitive.”
The FDA theme is a common thread in this year’s feedback.
“An underfunded/understaffed FDA being unable to test and approve new technologies in a timely manner is a serious concern,” wrote a survey participant. “There are great things ‘just around the corner,’ but it seems like the corner isn’t getting here any time soon.”
Yet another chimed in: “The FDA and many companies have become so wrapped up in preventing all risk that product development and innovation has come to a dead standstill.”
The ability to innovate—or lack thereof—also was mentioned.
One wrote: “There’s so much pricing pressure that it’s reducing innovation and choking R&D.”
“Technology has grown so rapidly that it is hard to keep up,” said a respondent. “I am afraid that people have about reached their saturation point and, in order to compensate, we now make new rules and guidelines to try to force people to use the technology.
Soon there will be a point where we say enough is enough and have to simplify the systems instead of expand them.”
OEMs aren’t innovating “at all,” fumed one survey taker. “Large OEMs are simply acquiring smaller startups, and that’s a scary innovation model if startups aren’t getting funding.”