Michael Barbella, Managing Editor10.08.12
The U.S. economy slowly is rebounding (it is bouncing back at a snail’s pace but nevertheless headed in the right direction), yet medical device salaries remain flat as companies wrestle with increased regulatory requirements, low-cost manufacturing abroad and an excise tax that is killing jobs.
Despite such challenges, though, most medtech professionals feel secure in their careers and are satisfied with their salaries. But more than half, or 54.2 percent, have felt threatened by the most destructive economic downturn since World War II, according to the latest salary survey conducted by Medical Product Outsourcing.
“My job is dependent on filling employment opportunities,” one survey respondent wrote. “With limited growth and many unemployed, it makes [my job] more challenging.” Said another: “The medical device industry is typically recession proof (people always get sick). However, this recession coupled with ongoing unease [over] Obamacare has caused considerable wallet hugging by buyers.”
It also has led to significant “wallet-hugging” by companies, particularly those forced to pay tens of millions of dollars in additional taxes due to healthcare reform. The Patient Protection and Affordable Care Act, signed into law in March 2010, imposes a 2.3 percent excise tax on medical devices sold by a manufacturer or importer. The tax does not apply to drugs, eyeglasses and contact lenses, or any other device purchased by the general public at retail for individual use.
Industry groups like the Advanced Medical Technology Association and the Medical Device Manufacturers Association as well as most major manufacturing firms have been opposed to the tax practically since its inception. Company executives and trade association representatives are attempting to repeal the tax, but there is little chance of a vote occurring before the levy takes effect on Jan. 1. As a result, companies such as Boston Scientific Inc., Medtronic Inc., Stryker Corp., Welch Allyn and Zimmer Holdings Inc., among others, have trimmed costs (and personnel) to minimize the tariff’s impact.
For the most part, medtech professionals seem unfazed by all the layoffs—57 percent of the 154 respondents to MPO’s salary survey reported feeling “secure” or “very secure” in their respective positions. Only 10 percent expressed some career anxiety.
Yet the minority appears to be growing. Fewer survey respondents were confident this year about their futures with employers than they were in 2010, when more than two-thirds (66 percent) felt secure in their jobs. Whether the device tax is the source of this increased anxiety may never truly be known because survey takers did not fully reveal the reasons for their insecurities. Several respondents attributed “layoffs” to their nervousness, but none directly linked the job cuts to the excise tax.
Medical device professionals also did not attribute downsizing or overseas competition to their internal strife, even though fewer companies expanded this year compared with 2010 and more workers are feeling threatened by overseas markets such as China, India, Korea, and to some extent, Europe. Nearly 67 percent of respondents’ companies experienced growth in the past year—an impressive turnaround compared with 2009, when only 47 percent of device firms expanded but down 7.9 percent from 2010, when 74.6 percent of device professionals reported growth.
After a brief lull in 2010, downsizing appears to be making a comeback—33.3 percent of survey takers revealed cutbacks at their companies this year, a considerable drop from the staggering 53 percent rate in 2009 but still nearly 8 percentage points higher than the 25.4 percent that survived downsizing two years ago.
Respondents attributed the downsizing this year to various factors, including government spending cuts, paltry federal grants, diminishing demand for contract manufacturing, a general “lack of business” and weak domestic product sales.
Perhaps it was the weak domestic sales that contributed to a 12.4 percent drop in the number of medtech professionals who claim to be unaffected by overseas competition and a 12.4 percent rise in the number of workers feeling nervous about their rivals abroad. As one respondent bluntly noted, “[There are] always cheaper places to build.”
Low-cost country options most likely will never go away. And there is no escaping the stress involved in manufacturing a product abroad. But that stress might be worth the risk, because international business—when conducted properly—can be extremely gratifying. Consider some of the comments from MPO survey participants about their favorite part of the job: “Meetings with different cultures,” said one device worker. “Meeting different people from all over the world,” agreed another. Several more mentioned international travel and contacts as their top favorites.
The diversity of medical technology and “family-like” workplace also are popular sources of fulfillment for healthcare professionals, according to the survey. But the ability to innovate and improve patients’ lives really is what motivates most device artisans to show up for work every day. One survey participant who related the root of his own job satisfaction possibly spoke for the entire medical technology workforce when he replied, “Knowing that what I do makes a difference in people’s lives.”
Compensation can be a mighty motivator as well, and medical device workers appear to be fairly well-paid, according to the survey. Nearly half, or 47 percent, earn between $75,000 and $150,000 annually; 13 percent earn between $150,000 and $200,000 per year, and 6.5 percent take home more than $200,000. The remaining third are split nearly evenly on either side of the nation’s real median household income of $50,054—16.9 percent earn between $50,000 and $75,000, and 16.8 percent make less than $50,000.
Stock options slowly are disappearing (that perk is reserved for just 21.4 percent of workers, according to the survey), and companies seem to be getting stingy with even the most basic benefits. Many survey respondents lamented the lack of company profit-sharing plans, 401(k)s, car allowances and tuition reimbursement and some griped about the lack of any benefits, including health insurance.
Others, however, lauded their employers for such non-traditional extras as a subsidized cafeteria, a compressed workweek, flexible hours, relocation assistance, domestic partnership benefits, an on-site wellness program, flexible spending accounts and, perhaps most importantly, professional respect.
That latter perk could be the key to respondents’ fierce loyalty to their employers. Only 20.7 percent of MPO readers expressed a desire to leave the companies for which they work in the next two years. Salaries might play a role in corporate loyalty as well. More than half the survey participants (52 percent) either are “satisfied” or “very satisfied” that their salary accurately reflects their level of responsibility. Raises (or lack thereof), however, eventually may prompt some workers to be unfaithful to their corporate partners.
Nearly one-third of respondents (31.2 percent) did not receive a raise last year, and 30 percent do not expect to get one this year. Those who did receive raises in 2011 were rewarded handsomely, though: 13.6 percent received a 3 percent salary hike; 12.3 percent were given a 2 percent raise; 9.1 percent received an additional 4 percent in their paychecks and 7.1 percent took home an additional 5 percent in total salary.
Surprisingly, 4.5 percent were given a 10 percent raise and 2.6 percent received a staggering 20 percent increase—more than three times the average 6 percent hike medical device professionals reported in 2011, according to MedReps.com, an online job search site focused on medical representative sales jobs and related industries. The site’s 2nd Annual Medical Device Sales Salary report concluded that medical device sales reps earn an average of $154,753 (base salary and commission/ bonus), more than their counterparts in any other field. Device professionals, according to the report, earn 1 percent more than those working in healthcare IT/software and 2.5 percent more than those in biotech/biopharma.
Men, on average, earn 15 percent more than women, the report stated, though the data indicates that income appears to increase with age. The most significant jump occurred between the 20-30 and 31-40 age groups. Afterwards, it levels off a bit with a 4 percent increase reported by those between 41 and 50 years old and less than a 1 percent change in the 51-60 age group.
The jump to management in medical device sales has a significant impact on income, the MedReps report concluded. Base salaries for those working in device sales management are 36 percent higher than those in a sales role; similarly, commission and bonuses for those in management are 8 percent more than those they supervise.
Salaries, however, are not always indicative of experience levels. The report found those with 11-20 years of experience earn the most money, followed by sales reps with six to 10 years under their belts. Veterans with 20 or more years of service in the industry earn an average of $171,837.
Despite such challenges, though, most medtech professionals feel secure in their careers and are satisfied with their salaries. But more than half, or 54.2 percent, have felt threatened by the most destructive economic downturn since World War II, according to the latest salary survey conducted by Medical Product Outsourcing.
It also has led to significant “wallet-hugging” by companies, particularly those forced to pay tens of millions of dollars in additional taxes due to healthcare reform. The Patient Protection and Affordable Care Act, signed into law in March 2010, imposes a 2.3 percent excise tax on medical devices sold by a manufacturer or importer. The tax does not apply to drugs, eyeglasses and contact lenses, or any other device purchased by the general public at retail for individual use.
Industry groups like the Advanced Medical Technology Association and the Medical Device Manufacturers Association as well as most major manufacturing firms have been opposed to the tax practically since its inception. Company executives and trade association representatives are attempting to repeal the tax, but there is little chance of a vote occurring before the levy takes effect on Jan. 1. As a result, companies such as Boston Scientific Inc., Medtronic Inc., Stryker Corp., Welch Allyn and Zimmer Holdings Inc., among others, have trimmed costs (and personnel) to minimize the tariff’s impact.
Yet the minority appears to be growing. Fewer survey respondents were confident this year about their futures with employers than they were in 2010, when more than two-thirds (66 percent) felt secure in their jobs. Whether the device tax is the source of this increased anxiety may never truly be known because survey takers did not fully reveal the reasons for their insecurities. Several respondents attributed “layoffs” to their nervousness, but none directly linked the job cuts to the excise tax.
Medical device professionals also did not attribute downsizing or overseas competition to their internal strife, even though fewer companies expanded this year compared with 2010 and more workers are feeling threatened by overseas markets such as China, India, Korea, and to some extent, Europe. Nearly 67 percent of respondents’ companies experienced growth in the past year—an impressive turnaround compared with 2009, when only 47 percent of device firms expanded but down 7.9 percent from 2010, when 74.6 percent of device professionals reported growth.
After a brief lull in 2010, downsizing appears to be making a comeback—33.3 percent of survey takers revealed cutbacks at their companies this year, a considerable drop from the staggering 53 percent rate in 2009 but still nearly 8 percentage points higher than the 25.4 percent that survived downsizing two years ago.
Respondents attributed the downsizing this year to various factors, including government spending cuts, paltry federal grants, diminishing demand for contract manufacturing, a general “lack of business” and weak domestic product sales.
Low-cost country options most likely will never go away. And there is no escaping the stress involved in manufacturing a product abroad. But that stress might be worth the risk, because international business—when conducted properly—can be extremely gratifying. Consider some of the comments from MPO survey participants about their favorite part of the job: “Meetings with different cultures,” said one device worker. “Meeting different people from all over the world,” agreed another. Several more mentioned international travel and contacts as their top favorites.
The diversity of medical technology and “family-like” workplace also are popular sources of fulfillment for healthcare professionals, according to the survey. But the ability to innovate and improve patients’ lives really is what motivates most device artisans to show up for work every day. One survey participant who related the root of his own job satisfaction possibly spoke for the entire medical technology workforce when he replied, “Knowing that what I do makes a difference in people’s lives.”
Compensation can be a mighty motivator as well, and medical device workers appear to be fairly well-paid, according to the survey. Nearly half, or 47 percent, earn between $75,000 and $150,000 annually; 13 percent earn between $150,000 and $200,000 per year, and 6.5 percent take home more than $200,000. The remaining third are split nearly evenly on either side of the nation’s real median household income of $50,054—16.9 percent earn between $50,000 and $75,000, and 16.8 percent make less than $50,000.
Others, however, lauded their employers for such non-traditional extras as a subsidized cafeteria, a compressed workweek, flexible hours, relocation assistance, domestic partnership benefits, an on-site wellness program, flexible spending accounts and, perhaps most importantly, professional respect.
That latter perk could be the key to respondents’ fierce loyalty to their employers. Only 20.7 percent of MPO readers expressed a desire to leave the companies for which they work in the next two years. Salaries might play a role in corporate loyalty as well. More than half the survey participants (52 percent) either are “satisfied” or “very satisfied” that their salary accurately reflects their level of responsibility. Raises (or lack thereof), however, eventually may prompt some workers to be unfaithful to their corporate partners.
Nearly one-third of respondents (31.2 percent) did not receive a raise last year, and 30 percent do not expect to get one this year. Those who did receive raises in 2011 were rewarded handsomely, though: 13.6 percent received a 3 percent salary hike; 12.3 percent were given a 2 percent raise; 9.1 percent received an additional 4 percent in their paychecks and 7.1 percent took home an additional 5 percent in total salary.
Surprisingly, 4.5 percent were given a 10 percent raise and 2.6 percent received a staggering 20 percent increase—more than three times the average 6 percent hike medical device professionals reported in 2011, according to MedReps.com, an online job search site focused on medical representative sales jobs and related industries. The site’s 2nd Annual Medical Device Sales Salary report concluded that medical device sales reps earn an average of $154,753 (base salary and commission/ bonus), more than their counterparts in any other field. Device professionals, according to the report, earn 1 percent more than those working in healthcare IT/software and 2.5 percent more than those in biotech/biopharma.
Men, on average, earn 15 percent more than women, the report stated, though the data indicates that income appears to increase with age. The most significant jump occurred between the 20-30 and 31-40 age groups. Afterwards, it levels off a bit with a 4 percent increase reported by those between 41 and 50 years old and less than a 1 percent change in the 51-60 age group.
The jump to management in medical device sales has a significant impact on income, the MedReps report concluded. Base salaries for those working in device sales management are 36 percent higher than those in a sales role; similarly, commission and bonuses for those in management are 8 percent more than those they supervise.
Salaries, however, are not always indicative of experience levels. The report found those with 11-20 years of experience earn the most money, followed by sales reps with six to 10 years under their belts. Veterans with 20 or more years of service in the industry earn an average of $171,837.