The pandemic has forever changed the healthcare market’s day-to-day operations and long-term strategy. Commercial teams in particular have faced pandemic-induced challenges like high employee turnover, supply chain snafus, and provider staffing shortages.

When faced with these challenges, commercial leaders within the medical device, pharmaceutical, and healthcare technology sectors can take three immediate steps to adapt to the impact that COVID-19 has had on those industries. Following these suggestions will not only help drive revenue growth but strengthen organizations’ overall long-term success.

Combating The Great Resignation and Retaining Talent

The war for talent has been an ongoing challenge since the beginning of the pandemic. Alexander Group research indicates that employee turnover will remain high this year; that analysis is corroborated by results from a recent company survey showing more than half of healthcare executives (59 percent) having a difficult time recruiting new talent. To help attract new talent and combat the high turnover, healthcare organizations are planning to increase total target sales compensation for field representatives by 4 percent to 6 percent this year. Per Alexander Group’s benchmarking database, field reps are currently paid an average $183,000 annual salary, comprised of a $93,000 base salary and $90,000 target incentive. 

Higher compensation alone, however, will not solve the healthcare industry’s current talent shortage. Companies trying to fill gaps or struggling to retain talent should target candidates who align well with current staff and have the skills necessary to drive success for the company. Healthcare recruiters also should identify new unique skills that will help overcome the loss of employees to other organizations.

There are several key tactics that can help companies retain employees. The first is prioritizing the company culture and ensuring it is positively driven by leadership. Helpful ways to do that could include conducting internal organization health surveys, incorporating high performers’ input in commercial planning decisions, and generally making sure teams feel like they are heard. The second tactic is adapting pay levels and structure to reflect the fast-changing labor market. Wage increases have remained constant, giving companies the opportunity to leverage those salary hikes and overall work to retain talent.

Overcoming Provider Staffing Challenges

Staff shortages were one of the most daunting challenges vexing the healthcare industry over the past two years. This ultimately caused a major shift in staffing models within hospitals, an increase in nursing shortages, and a scarcity of travel nurses. It also placed an increased administrative burden on hospitals, clinics, ambulatory surgical centers, and other outlets. The staff shortages triggered a mad scramble among providers to find the right tools and tactics to stay afloat during the COVID-19 pandemic. But nobody really knew what the next step might be to solve the staff shortages.

The next step turned out to be digital transformation. One of the most valuable lessons the pandemic taught the healthcare industry was that digital tools and technology can enable hospitals, clinicians, and physicians to interact with their customers and patients differently. This was one of the key investments that organizations found to be helpful as the industry realized it needed to embrace digital health to not only change but stay ahead of the curve. Organizations were able to combat these challenges by advancing their digital strategies. Advancements included provider-focused digital education tools, deployment of remote sales/service teams to support clinical needs pre- or post-procedures, and providing a seamless omnichannel support model to ease the burden felt by some healthcare customers.

Adopting a New Mindset

Healthcare leaders are seeking new and effective ways to successfully engage customers, help them meet patients’ needs, and keep abreast with the rapidly changing medical journey. Customer Success is a big factor in driving corporate success, but many organizations were not taking full advantage of the Customer Success role. These same organizations later came to the realize that Customer Success is more than just a role—it’s a mindset and opportunity to move beyond features and functions and dive into more value-based pricing. Customer Success has quickly become a cornerstone of a successful revenue model within the healthcare industry, and 2022 will bring even more evolution. In a recent study, Alexander Group predicted that healthcare organizations would continue to expand their Customer Success organizations faster than commercial organizations in 2022.

Another factor affecting corporate success is performance management. Through the past year, top healthcare commercial organizations raced to align their performance management practices to a new, evolving customer landscape and market environment. Specifically, Alexander Group research found that top organizations place a strong emphasis on aligning virtual sales, talent retention, and incentive compensation practices to new external realities, as they are deemed essential to capturing growth.

Conclusion

Today’s reality gives way to the overall need to transform healthcare commercial models. Healthcare leaders need to embrace the notion that the industry has been forever changed. Embracing new commercial models and tools is needed to better align with evolving customer expectations. Those who evolve will excel, while those who continue more traditional commercial practices will struggle to achieve market growth rates profitably. 

---

Craig Ackerman is a principal in the Alexander Group’s Atlanta office and leader of the firm’s Healthcare practice. Areas of focus in his consulting work include market segmentation, customer coverage models, sales process effectiveness, sales job design, quota setting and incentive compensation design. Craig works with sales organizations to develop actionable go-to-market strategies across many industries, including medical devices, biotechnology, financial services and high technology. Prior to joining the Alexander Group, Craig held leadership positions in sales and marketing with major telecommunication and distribution companies, and as a management consultant with a Big 5 firm. Craig has extensive expertise in business process improvement, operational support systems, and customer acquisition strategies. He earned a bachelor of science degree from Florida International University and an MBA from the Goizueta School of Business at Emory University.

Mike White is a principal in the Alexander Group’s Chicago office and is part of the firm’s Healthcare practice, focusing in medical device and diagnostics. Mike has experience leading multiple commercial transformations, as well as targeted engagements focused on areas such as go-to-customer strategy, job design, enablement programs and sales compensation. His experience spans multiple industries, including medical device, manufacturing, distribution and high tech. Prior to joining the Alexander Group, Mike worked for several years in various sales and sales leadership roles for a market leading Fortune 500 company. Mike earned a bachelor of science degree in applied engineering sciences from Michigan State University and a MBA from Booth School of Business, University of Chicago. He is also a Certified Sales Compensation Professional (CSCP), WorldatWork.