Michael Barbella , Managing Editor10.14.15
So much for holding out.
For years now, U.S. medtech firms have branded the 2.3 percent medical device tax a “job killer,” contending the controversial Affordable Care Act proviso prevents them from expanding and hiring new workers. Yet even with unemployment rates falling and the economy improving (or at least returning to some semblance of pre-recession normalcy), most medical device companies still harbor considerable ill will toward the levy.
Such disdain clearly was evident in the results of a Medical Device Manufacturers Association (MDMA) survey conducted in late 2014: Seventy-two percent of respondents said they’ve slowed or halted U.S. job creation to pay the tax, and 85 percent claimed they would hire new employees if the levy was repealed.
“Broad support continues to grow for repealing the medical device tax...” MDMA President/CEO Mark Leahey proclaimed in a January news release announcing the survey results. “This destructive policy has thwarted job creation and patient care for too long.”
Precisely how long, though, is up for debate. Industry bigwigs insist the device tax is negatively impacting research and development funding, chasing venture capital from startups and smaller medtech firms, and reducing the sector’s overall job rolls. Yet medtech employment has grown significantly this year despite the tax’s vexing longevity—repeal legislation passed the U.S. House of Representatives in June and currently is pending in the Senate.
Medical device labor levels surged 38 percent to record highs in the first quarter, fueled partly by a 62 percent increase in overall life sciences R&D positions and 23 percent gain in outsourcing/services jobs, reports ZRG Partners LLC, a Boston, Mass.-based life-science-focused executive search and consulting firm. And though hiring crash-landed in Q2—overall medical device employment fell 11 percent and life sciences R&D jobs plummeted nearly 50 percent—the device sector retained a solid 9 percent lead over the same period last year, ZRG data show.
Company executives attributed the spike in first-quarter medtech employment to the blockbuster Medtronic-Covidien merger, noting the $50 billion corporate marriage offset staff reductions at Becton Dickinson and Company and Siemens Healthcare, the latter of which cut 7,400 jobs to save $1.14 billion.
Indeed, acquisitions considerably boosted life-science employment levels in the past 12 months: Smith & Nephew added 1,800 workers to its payroll (boosting staff 22 percent) by purchasing sports medicine specialist ArthroCare Corp., and Abbott Laboratories bolstered its workforce 12 percent (8,000 jobs) through mergers with Santiago, Chile-based CFR Pharmaceuticals SA, Russian drugmaker Veropharm, and venture-backed electrophysiology technology developer Topera Inc.
Boston Scientific Corp. multiplied its manpower through mergers and acquisitions as well, admitting 1,000 new workers into its empire (a third of which came from the acquisition of Bayer AG’s interventional business. The influx of fresh talent restored most of the jobs lost over the last several years to cost-cutting and profit-boosting efforts.
Other contributors to the 2014-15 medtech/life-sciences hiring boon included Baxter International (5,000 new workers); B. Braun (4,128 additional employees); Essilor International (2,903 extra staff); Steris Corp. (1,600 supplemental laborers); and Stryker Corp. (1,000 ancillary job-holders), a report from London, United Kingdom-based Evaluate Ltd. concluded.
The life-science market intelligence/analysis firm ranks Medtronic as the world’s largest medtech employer, having gained an additional 43,000 employees from the Covidien merger. While that increase far exceeds the combined total number of jobs added by all other top 10 employers in the past year, it nevertheless takes a back seat to Exact Sciences Corp., which had a higher percentage accrual. The Madison, Wis.-based molecular diagnostics company boosted its staff 131 percent in 2014, hiring 134 full-time workers to prepare for launch of its Cologuard colorectal cancer stool test, approved last summer by the U.S. Food and Drug Administration (FDA). Medtronic, by comparison, supplemented its staff by 88 percent, according to Evaluate data.
The surge in Exact Sciences’ staff last year is not surprising, considering the growth the firm has experienced since fending off low-ball takeover bids and running low on cash in 2009. Over the last five years, the company has increased its workforce more than 12 fold.
“New technology platforms and exciting scientific developments continue to fuel demand for top talent,” ZRG Managing Director David Fortier said in releasing second-quarter hiring data, “particularly for those experienced progressing clinical candidates through development and the regulatory approval process. The warming of EMEA [Europe, Middle East and Africa] is also a positive sign for the industry.”
There have been lots of positive signs of late: falling oil prices, lower U.S. unemployment rates (slipping from 6.6 percent in January 2014 to 5.1 percent in September), emerging market economic growth, and improved profit margins.
Such sanguinity might help explain the boost in job security and satisfaction among medtech professionals polled by Medical Product Outsourcing. More than three-quarters, or 82.1 percent, of the respondents to the magazine’s latest salary survey reported feeling secure in their present jobs. And half (50 percent) pledged loyalty to their current employers, up 10 percent from the 2014 results. Only 21.4 percent vowed to leave their jobs, down 6.5 percent from the previous year.
Potential contributors to workers’ discontent include market volatility, new business generation, insufficient (employee) skill levels and incompetent management, according to the survey. Particularly frustrating to those in the field are internal politics (cited by 25 percent of respondents); the regulatory process (19.6 percent); inadequate project funding (17.8 percent); poor pay (10.7 percent) and shareholder expectations (5.4 percent).
Compensation, actually, has become quite a thorny issue for medtech workers. While half of MPO survey respondents (50 percent) believe their salaries adequately reflect their level of responsibility, 28.6 percent are unhappy with their total compensation, up 3.8 percent from last year’s level.
There may be good reason for that dissatisfaction: More than a third (39.3 percent) of those polled reported they did not receive a raise last year, a 10.9 percent jump from the 28.4 percent whose annual pay flatlined in 2013. Moreover, 41 percent have not yet received a bump in pay this year. Adding to the discontent is the (now) longstanding corporate mentality of doing more with less. “[I have been] handed additional (but similar) responsibilities for my current position but doing them for a sister company without compensation,” griped one respondent.
Nearly one quarter of all workers with fatter paychecks received a 3 percent raise last year (23.2 percent); 10.7 percent earned 2 percent hikes, 7.1 percent collected 10 percent increments and 5.4 percent pocketed either 1 percent or 5 percent increases. This year’s raises followed a similar trajectory, with 23.2 percent receiving a 3 percent raise, 14.3 percent earning 2 percent hikes, 5.4 percent getting 5 percent increases, 3.6 percent reaping either 4 percent, 10 percent or 12 percent increments, and 1.8 bookending the salary scale, accepting either a 1 percent boost or whopping 20 percent upgrade.
Despite the variability (and subjectivity) of corporate compensation, medtech professionals appear to be well-paid, although most (84 percent) do not receive stock options as part of their income (a few of the lucky minority were awarded three-year vesting stock options or offered a 15 percent discount on a stock purchase plan). Nearly half of MPO’s survey participants—48.2 percent—earn between $75,000 and $150,000 annually; 14.3 percent score between $50,000 and $75,000; 16 percent earn $150,000 and $200,000; 9 percent take home more than $200,000 and 7.1 percent collect between $25,000 and $50,000. Only 5.4 percent are paid less than $15,000 annually.
Cash, however, isn’t always king. Many device workers measure their levels of career contentment through axioms like creativity, partnerships, product development, opportunity and overall challenge, or, as one respondent said: “... having a direct and positive impact on patients globally.”
For years now, U.S. medtech firms have branded the 2.3 percent medical device tax a “job killer,” contending the controversial Affordable Care Act proviso prevents them from expanding and hiring new workers. Yet even with unemployment rates falling and the economy improving (or at least returning to some semblance of pre-recession normalcy), most medical device companies still harbor considerable ill will toward the levy.
Such disdain clearly was evident in the results of a Medical Device Manufacturers Association (MDMA) survey conducted in late 2014: Seventy-two percent of respondents said they’ve slowed or halted U.S. job creation to pay the tax, and 85 percent claimed they would hire new employees if the levy was repealed.
“Broad support continues to grow for repealing the medical device tax...” MDMA President/CEO Mark Leahey proclaimed in a January news release announcing the survey results. “This destructive policy has thwarted job creation and patient care for too long.”
Precisely how long, though, is up for debate. Industry bigwigs insist the device tax is negatively impacting research and development funding, chasing venture capital from startups and smaller medtech firms, and reducing the sector’s overall job rolls. Yet medtech employment has grown significantly this year despite the tax’s vexing longevity—repeal legislation passed the U.S. House of Representatives in June and currently is pending in the Senate.
Medical device labor levels surged 38 percent to record highs in the first quarter, fueled partly by a 62 percent increase in overall life sciences R&D positions and 23 percent gain in outsourcing/services jobs, reports ZRG Partners LLC, a Boston, Mass.-based life-science-focused executive search and consulting firm. And though hiring crash-landed in Q2—overall medical device employment fell 11 percent and life sciences R&D jobs plummeted nearly 50 percent—the device sector retained a solid 9 percent lead over the same period last year, ZRG data show.
Company executives attributed the spike in first-quarter medtech employment to the blockbuster Medtronic-Covidien merger, noting the $50 billion corporate marriage offset staff reductions at Becton Dickinson and Company and Siemens Healthcare, the latter of which cut 7,400 jobs to save $1.14 billion.
Indeed, acquisitions considerably boosted life-science employment levels in the past 12 months: Smith & Nephew added 1,800 workers to its payroll (boosting staff 22 percent) by purchasing sports medicine specialist ArthroCare Corp., and Abbott Laboratories bolstered its workforce 12 percent (8,000 jobs) through mergers with Santiago, Chile-based CFR Pharmaceuticals SA, Russian drugmaker Veropharm, and venture-backed electrophysiology technology developer Topera Inc.
Boston Scientific Corp. multiplied its manpower through mergers and acquisitions as well, admitting 1,000 new workers into its empire (a third of which came from the acquisition of Bayer AG’s interventional business. The influx of fresh talent restored most of the jobs lost over the last several years to cost-cutting and profit-boosting efforts.
Other contributors to the 2014-15 medtech/life-sciences hiring boon included Baxter International (5,000 new workers); B. Braun (4,128 additional employees); Essilor International (2,903 extra staff); Steris Corp. (1,600 supplemental laborers); and Stryker Corp. (1,000 ancillary job-holders), a report from London, United Kingdom-based Evaluate Ltd. concluded.
The life-science market intelligence/analysis firm ranks Medtronic as the world’s largest medtech employer, having gained an additional 43,000 employees from the Covidien merger. While that increase far exceeds the combined total number of jobs added by all other top 10 employers in the past year, it nevertheless takes a back seat to Exact Sciences Corp., which had a higher percentage accrual. The Madison, Wis.-based molecular diagnostics company boosted its staff 131 percent in 2014, hiring 134 full-time workers to prepare for launch of its Cologuard colorectal cancer stool test, approved last summer by the U.S. Food and Drug Administration (FDA). Medtronic, by comparison, supplemented its staff by 88 percent, according to Evaluate data.
The surge in Exact Sciences’ staff last year is not surprising, considering the growth the firm has experienced since fending off low-ball takeover bids and running low on cash in 2009. Over the last five years, the company has increased its workforce more than 12 fold.
“New technology platforms and exciting scientific developments continue to fuel demand for top talent,” ZRG Managing Director David Fortier said in releasing second-quarter hiring data, “particularly for those experienced progressing clinical candidates through development and the regulatory approval process. The warming of EMEA [Europe, Middle East and Africa] is also a positive sign for the industry.”
There have been lots of positive signs of late: falling oil prices, lower U.S. unemployment rates (slipping from 6.6 percent in January 2014 to 5.1 percent in September), emerging market economic growth, and improved profit margins.
Such sanguinity might help explain the boost in job security and satisfaction among medtech professionals polled by Medical Product Outsourcing. More than three-quarters, or 82.1 percent, of the respondents to the magazine’s latest salary survey reported feeling secure in their present jobs. And half (50 percent) pledged loyalty to their current employers, up 10 percent from the 2014 results. Only 21.4 percent vowed to leave their jobs, down 6.5 percent from the previous year.
Potential contributors to workers’ discontent include market volatility, new business generation, insufficient (employee) skill levels and incompetent management, according to the survey. Particularly frustrating to those in the field are internal politics (cited by 25 percent of respondents); the regulatory process (19.6 percent); inadequate project funding (17.8 percent); poor pay (10.7 percent) and shareholder expectations (5.4 percent).
Compensation, actually, has become quite a thorny issue for medtech workers. While half of MPO survey respondents (50 percent) believe their salaries adequately reflect their level of responsibility, 28.6 percent are unhappy with their total compensation, up 3.8 percent from last year’s level.
There may be good reason for that dissatisfaction: More than a third (39.3 percent) of those polled reported they did not receive a raise last year, a 10.9 percent jump from the 28.4 percent whose annual pay flatlined in 2013. Moreover, 41 percent have not yet received a bump in pay this year. Adding to the discontent is the (now) longstanding corporate mentality of doing more with less. “[I have been] handed additional (but similar) responsibilities for my current position but doing them for a sister company without compensation,” griped one respondent.
Nearly one quarter of all workers with fatter paychecks received a 3 percent raise last year (23.2 percent); 10.7 percent earned 2 percent hikes, 7.1 percent collected 10 percent increments and 5.4 percent pocketed either 1 percent or 5 percent increases. This year’s raises followed a similar trajectory, with 23.2 percent receiving a 3 percent raise, 14.3 percent earning 2 percent hikes, 5.4 percent getting 5 percent increases, 3.6 percent reaping either 4 percent, 10 percent or 12 percent increments, and 1.8 bookending the salary scale, accepting either a 1 percent boost or whopping 20 percent upgrade.
Despite the variability (and subjectivity) of corporate compensation, medtech professionals appear to be well-paid, although most (84 percent) do not receive stock options as part of their income (a few of the lucky minority were awarded three-year vesting stock options or offered a 15 percent discount on a stock purchase plan). Nearly half of MPO’s survey participants—48.2 percent—earn between $75,000 and $150,000 annually; 14.3 percent score between $50,000 and $75,000; 16 percent earn $150,000 and $200,000; 9 percent take home more than $200,000 and 7.1 percent collect between $25,000 and $50,000. Only 5.4 percent are paid less than $15,000 annually.
Cash, however, isn’t always king. Many device workers measure their levels of career contentment through axioms like creativity, partnerships, product development, opportunity and overall challenge, or, as one respondent said: “... having a direct and positive impact on patients globally.”