COMPENSATION AND HIRINGThe Jacobs Management Group Salary Survey
Growth continues, even in these uncertain times. With key indicators in our industry suggesting change, our compensation and hiring statistics indicate a high degree of growth.
Despite the ongoing mergers and acquisitions, regulatory impacts and a dramatic upheaval in the political climate, their impact on hiring seems to be minimal and optimism remains high. Our industry stands strong and we are happy to present these statistics, gathered from over 425 people and over 100 companies. Here is the current snapshot of how your colleagues are doing in terms of compensation: the 2016 Jacobs Management Salary Survey results.
From Jacobs Management Group CEO and HS&M Publisher Cari Kraft: The 2016 results show continued growth in these uncertain times. Here’s are a few of the highlights into which sectors are moving, how compensation is affected, and where to expect growth:
• Sales turnover soared, especially in the healthcare vendor space, with a 25% turnover rate, followed by medical device at 16%, pharmaceutical at 14% and biotech at 11%. Marketing team turnover remained under 7% across all sectors
• Biotech sales compensation leads the way with top biotech sales reps earning a total compensation of over $278K. This is the second year biotech top sales reps have out-earned medical device top sales reps, who come close at $260K
• There is a high cost of poor hiring decisions, and the cost of vacant positions remains high. The cost of a mis-hire in sales is approximately $85K and in marketing it’s $78K. The monthly cost for each open sales position is on average $45K, while the cost of an open marketing position is $39K
• The highest growth is coming from medical device marketing at 9%, followed by biotech sales at 5.5%
This report summarizes the results from the Jacobs Management Group, Inc. Compensation Survey conducted in 2016. The target audience was key leaders in the medical device, pharmaceutical and biotechnology industries with a focus in the marketing and sales arena.
Results were compiled from over 425 individual responses, representing over 100 companies. Companies ranged in size from over $100B to under $10M and were categorized into four main sectors: pharmaceutical, biotechnology, medical device, and healthcare vendor. Over 80% of respondents had titles of manager or above.
GROWTH CONTINUES BUT CHANGES ITS MIX!
The continued good news is that both sales and marketing teams are forecast to grow across all sectors.
Sales force growth averaged 4% across all sectors, with pharmaceutical leading the way. The survey results didn’t distinguish between big pharma and specialty pharmaceutical but we expect that the larger portion was from the specialty world. Pharmaceutical companies still have, on average, the largest number of reps per company, at an average of 1,050 reps, as compared with the average across all the healthcare sectors of 670. The training period for new sales reps increased up from a little over 3 months to a little over 4 months. However, timeframes for sales promotions remained the same at approximately four and a half years.
The fastest growing segment is biotech, which grew by 5.5%, followed by pharmaceutical, with a steady growth of 5%.
MARKETING TEAM GROWTH INCREASES TO 8%
Marketing teams continued to grow, increasing from a pace of 7% to 8%. The average marketing department now has a team of 180. The average training period for a marketing team member is close to three months. The typical marketing professional remains in their position for a little over 3.75 years before being promoted. Marketing professional travel has remained very static with 28% travel as compared with prior 27%.
MEDICAL DEVICE MARKETING TEAMS ARE EXPERIENCING THE FASTEST GROWTH
Medical device marketing teams are growing the fastest, at a rate of just under 9%. Biotech growth has slowed from 8% to 3%. Healthcare vendor growth has almost stopped as it slowed from a rate of 4% to 1%. Pharmaceutical companies’ marketing team growth has increased from 5% to 6%.
MARKETING DIRECTORS CONTINUE TO EARN OVER 60% MORE THAN PRODUCT MANAGERS
Marketing directors earn, on average, 63% more than product managers. More than 66% of that comes from an increase in base salary, with the remainder in increased bonus potential. Product managers’ bonuses are, on average, 19%, marketing managers 21%, and marketing directors 25%. Product managers on average have a total compensation of $136K, marketing managers $154K, and marketing directors $218K.
TOP BIOTECH SALES REPS OUT-EARN MEDICAL DEVICE REPS AGAIN
Biotech sales compensation for top reps remains high with top sales rep compensation growing from $259K to $278K. Medical device compensation remains a close second, up to $259K from the prior $251K. Top sales reps drove their earnings up on average $30k while first year rep total compensation remained fairly flat at $120K vs. $119K. Across the board, top sales reps earn an average of $232K, with first year reps earning an average total of $120K. Top sales reps’ and first year reps’ base salaries differ only by an average of $25k. 41% of sales rep commissions are paid monthly, 50% are paid quarterly. .
IT’S EVEN MORE EXPENSIVE TO LEAVE POSITIONS OPEN
Each month a sales position remains open costs the company $53,305, up from $45,300. The average cost of hiring the wrong sales person is $85,606. Each month a marketing position remains open costs the company $37,900. The cost of hiring the wrong person is almost double, costing a little over $78,000. first year reps’ base salaries differ only by an average of $25k. 41% of sales rep commissions are paid monthly, 50% are paid quarterly..
IT COSTS COMPANIES ROUGHLY $200,000 PER VACANT POSITION IN LOST REVENUE
Sales rep positions fill the fastest and take just under 4 months, a month longer than last year. National accounts and sales director positions take longer at closer to 5 months. Product management positions take 4 months and marketing director positions take over 5 months. Product Manager and Marketing Manager positions take an average of 4 months to fill with Marketing Director positions taking over 5 months.
CLICK HERE FOR FULL SURVEY RESULTS Jacobs Management Group, Inc., a leading healthcare industry search firm, undertook this 2015 Compensation Survey specifically for the medical device, pharmaceutical, biotechnology, and healthcare vendor sectors to provide our clients with specific quantifiable compensation data. This article presents the highlights of that survey. Please click below to get the full survey report, or email Cari Kraft for further details, or to provide input for what you would like to see in the 2016 Survey. We would appreciate knowing if this has been helpful to you.