Originally Published MDDI December 2004
Originally Published MDDI December 2004
A number of device companies are expanding operations and creating jobs at rates not seen in several years. For the qualified candidate, there is plenty of opportunity for career advancement.
Opportunity is knocking, and many of the top medical device professionals are answering. According to recruiting and human resources experts, 2004 saw a significant upturn in hiring and placement of top personnel at device firms. Some reported twice as much activity as in 2003.
Does that mean there's a significant level of dissatisfaction with current positions? Probably not, judging from the results of MD&DI's 16th annual salary survey. In most job categories, 80–85% of respondents said they felt they had more or equal job security as compared with a year ago, and around two-thirds said they had no interest in finding a new job.
An optimistic explanation seems more plausible. The device industry is experiencing healthy growth, a number of positions have been created, and firms both large and small are making top professionals offers they cannot refuse.
Those who follow device industry hiring trends say there are several factors contributing to this growth and the resultant need to fill positions:
• The economy as a whole is improving, picking up the device industry along with it. “There has been a lot of shuffling in the [medical device] discipline, and, to our knowledge, it's because the economy is a lot stronger than it has been the past two years,” says Barbara Buchanan, an administrator for Fortune FPC National (New York City).
• Healthcare spending continues to post double-digit increases, and one factor is that demand for new medical technology is high.
• The venture capital market has loosened up after several years of conservatism. This means that more start-up device companies are getting funding and are creating jobs.
• Many of the industry's largest firms had very good years and had great revenue boosts thanks to blockbuster products such as drug-eluting stents. They are putting those profits back into their businesses, and creating jobs as a result.
There is also more diversity in hiring, says Joseph Mullings, president of the Mullings Group (Delray Beach, FL). The largest firms spent the last few years building up their cardiovascular businesses. Now that drug-eluting stents and other new cardiovascular technologies have proven they have staying power, the big manufacturers are building up other sectors, such as neurology, he says.
This buildup, he says, means that “the research positions are in huge demand. We are seeing tremendous activity in hiring clinical directors, regulatory directors, and vice presidents, and positions of that nature. These are bellwether indicators for growth in the industry. Hopefully it will lead to more jobs in manufacturing and the like.”
There appear to be plenty of positions available across a number of job functions. For example, Medrad Inc. (Indianola, PA) reports that it has been hiring steadily across the board, owing to the company's robust growth.
“We have new positions on the manufacturing side, the financial side, the engineering and product development side, the marketing side, and the sales and service sides,” says Andrew Ferraro, human resources manager for recruiting and staffing. “It's been remarkably consistent.” He adds that Medrad hired more people in the first 10 months of 2004 than it did in all of 2003.
Robert C. Reindl, corporate vice president of human resources for Edwards Lifesciences (Irvine, CA), says his firm has been hiring at an increased rate in sales, engineering, and production. “The growth is based in part on our getting into a new market, peripheral stents, and in part on our market expansion in heart valve therapy,” he says. Another factor, he says, is that Edwards increased R&D investment by almost 25% from 2003 to 2004.
Firms that make products with short development cycles are often filling positions across the board at once. “We are seeing increases in hiring for quality, product development, and manufacturing,” says Jeff Kroh, president of Jeff Kroh Associates (Los Angeles). “When you start doing research and development, you often need to know quickly how it will be manufactured, and you need to get your quality systems in place.”
It's not as if device companies are going to hire just anyone, though. “It's wide open right now. There are a lot of excellent jobs out there, but it is difficult to find candidates to fit the jobs,” says Nancy Simon, senior partner at Lucas Group (Atlanta). “[Device companies] are looking for an elite level of candidate with specific skill sets, and they do not have to compromise.”
Many of the clinical and regulatory opportunities are at start-ups, whose backers are now more likely to make investments based on promising clinical and regulatory pathways, and not merely on hype or enthusiasm for a product design, says Roger Brooks, president of Leading Edge Medical Search (Boulder, CO). “We are really seeing the importance of the clinical function within the organization being demonstrated,” he says. “You no longer need someone just to run the trials. You need someone who can design them strategically. You also need to have people who understand reimbursement, and who can design studies that come up with data for reimbursement as well as for FDA.”
On the sales and marketing side, firms are seeking candidates “that can influence physicians and change practice habits,” says Simon. “That's a unique skill set.”
Even when a large firm decides to deemphasize a certain product segment, that can lead to hiring activity as well, as professionals from that segment latch on to start-up companies devoted to that field.
Workers Want Challenges
Indeed, it is professional fulfillment, and not material gain, that drives many in the device industry to change jobs. In MD&DI's survey, the need for challenging assignments was most often cited as a factor contributing to job satisfaction, with 91% of respondents deeming it important. Positive atmosphere and morale was second, with 89%. Competitive salary was third, with 87%. Likewise, the survey shows 69% believing that they are fairly compensated, as compared with 29% who believe they make too little.
Yet, there is movement. “In larger companies, people are more restless than ever, and there is a major concern over retention of intellectual capital,” Mullings says.
The restlessness isn't necessarily coming from unhappiness, notes Dan Murray, owner of Medical Search (Michigan City, IN), which specializes in placing executives at start-ups. “Most of the people I place are looking for or are interested in a new opportunity and may not be 100% happy with where they are,” he says. “For example, I'll talk to an engineer who has been developing coronary stents for a while about a company that is working on an implant for congestive heart failure. They'll be interested because it's new for them. Whereas when a market has been around for a while, it may not be as intriguing, generally. Most of them are looking for something that is challenging, holds their interest, and might make a difference in helping out a disease state. The idea of getting stock options that ultimately might make them wealthy is nice, but I don't think most are playing this game with that intention.”
Those in upper-management positions seem to be quite satisfied with their current positions, notes Brooks.
“We are experiencing significant challenges in finding star players who are actively looking” for a new position, he says. “Companies seem to be doing a very good job of making their star players happy. As a result, companies have to be very strategic as to how to attract star talent [from other firms].”
Attracting the Best
It is not necessarily lavish bonuses or perks that are making those top professionals content, Brooks maintains. Instead, he says, it has more to do with simple things like maintaining open communication.
“Open communication resolves issues that lead to job dissatisfaction,” he says. “It's not about the money. It's about making people feel valued, and letting them know that management understands what's going on.”
Ferraro notes that Medrad generally pays in the 75th percentile across all industries in order to help attract the best and the brightest. But just as important in candidates' minds, he says, is the company's reputation for putting out quality products and creating a comfortable work environment. Its winning of the Malcolm Baldrige National Quality Award in early 2004 likely added to its appeal for prospective employees. These points were borne out in September when, having 105 openings, Medrad held a job fair for the first time. It expected to attract about 500 candidates. It got double that.
Reindl of Edwards Lifesciences notices a similar trend, saying applicants tend to be more interested in the firm's products and working environment than in the financial rewards it can offer. “We make products that treat heart disease, the number-one killer in the world. People like to work at a company where you have a sense that you are doing something good for society,” he says. “In addition, people like to work for a company that is a clear leader, and 80% of our sales come from products with the number one global market position. We also do business in more than 100 countries around the world. That is attractive to many who want a global experience.”
In addition, Brooks says, the decreased emphasis on material gains means top device professionals are less interested in relocating for a new job. “Perhaps we are in an era where people put more emphasis on having a stable, consistent household,” he says. “If there is more focus on family and friends, then there is less focus on material gains.”
In fact, Brooks has seen some start-ups offer deals that would increase a professional's net worth by $1 million to $2 million and had them been turned down or unenthusiastically received. “Some people feel that they just don't want to make a change, or that they can get a similar wealth-creating opportunity at the company where they are,” he says.
This means that the start-ups that want to attract top people are having their CEOs and board members go out of their way to meet with them. “They have to show that this can create enhancement opportunities and that they can be challenged in their work,” Brooks says. “They may even need to have their venture capital firm get involved.”
Those who are looking for a new job, however, should not assume the market is in their favor, says Simon.
“People need to keep documentation of their successes and achievements,” she says. “That lends itself to a much smoother interview process.”
The information presented in this article provides a broad framework for approximating employee compensation in the U.S. medical device industry, based on MD&DI's salary survey for 2004. Most of the responses analyzed are linear. They use cross-tabulation to compare one variable, such as job function, and analyze it simultaneously with a second variable, such as number of employees supervised. To account for the influence of additional variables, multivariate analysis is used to examine all variables simultaneously, account for their interdependence, and identify those that have the highest degree of predictive power. In any given year, some factors may not help to predict salary—usually because they correlate strongly with other variables included in the model.
The variables that were determined to have the greatest predictive value formed the basis for this year's salary approximation worksheet. Statistically, the model is only moderately powerful—it explains 59% of the salary variation (adjusted R-square = 0.585) and is significant by the F-test at p<0.001. Ninety-five percent of the time, its prediction around the mean is ±$6900 (standard error = $3450, mean = $88,700). Predictions tend to be most accurate for salary values in the middle of the range.
Base Salary: $28,900
Years of post–high school education
(+$4230 per year) +_______
Years of experience in industry
(+$1480 per year) +_______
Years with current organization
(–$625 per year) –_______
Each million dollars in organization's sales
(+$2.74 per number of millions, up to $5 billion) +_______
CEO/president (+$36,500) +_______
Vice president/director (+$40,600) +_______
Department head, supervisor, or manager
Hours worked in excess of 40 hours in a
typical week (+$847 per hour over 40) +_______
Male (+$5980) +_______
Predicted total annual salary: $________
Note: The worksheet applies only to full-time employees in firms manufacturing medical devices or in vitro diagnostics, with salaries ranging from $30,000 to $180,000, and for whom salary is at least 60% of the value of their total compensation package. The model provides a sense of the relative importance of each factor in predicting salary. It should not be used as a basis for comparison with any individual's situation.
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