COMPENSATION AND HIRINGThe Jacobs Management Group Salary Survey
Growth is mixed in this very interesting political climate. As the forces that drive our industry change, our compensation and hiring statistics show a variety of growth pockets.
Despite the uncertainties from a variety of areas such as policy changes, transformative technologies, value-based pricing and the pull to redesign organizations with patient-centric approaches, compensation continues to grow. Our industry is solid and we are happy to present these statistics, gathered from over 600 people and over 500 companies. Here is the current snapshot of how your colleagues are doing in terms of compensation: the 2018 Jacobs Management Salary Survey results.
From Jacobs Management Group CEO and HS&M Publisher Cari Kraft: The 2018 results show solid compensation figures in the midst of questions regarding our overall industry economics. Here are a few of the highlights about how sectors are changing, how compensation is affected, and where to expect growth:
- Sales turnover remains extremely high with medical device still at 16%, and pharmaceutical and biotech at 15% (up fom 14% and 11%). Marketing team turnover almost doubled to 12.9% compared to the prior 7%. Biotech marketing turnover is the highest at 17%
- Medical device reps have taken back the lead in top rep compensation with totals averaging over $280K, up from $259K. Biotech top rep compensation dropped to $229K
- The cost of poor hiring decisions increases, and the number of vacant positions remains high. The cost of a mis-hire in sales is approximately $80K and in marketing it’s $85K. The monthly cost for leaving any commercial position is just about even, with each open sales position costing on average $49K, and an open marketing position costing on average $50K
- The highest growth is coming from pharmaceutical 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 2018. The target audience, as in the past years, 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 600 individual responses, representing over 500 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 60% of respondents had titles of manager or above.
GROWTH CONTINUES AMID THIS UNCERTAIN CLIMATE!
The continued good news is that both sales and marketing teams are forecast to grow across all sectors.
Sales force growth increased to 5.5% across all sectors, with medical device and biotech tied with growth rates of 6.4%. This is a change from our last survey which had the industries growing in the order of biotech, pharma, and medical device. Pharmaceutical companies still have, on average, the largest number of reps per company, at an average of 1,099 reps, as compared with the average across all the healthcare sectors of 640. The timeframes for sales promotions remained the same at approximately four and a half years, a consistent metric for the past three survey sets. Average sales income increases approximately 6% per year.
MARKETING TEAM GROWTH HOLDS STEADY AT 8%
Marketing teams continued to grow, holding a pace of 8%. The average marketing department now has a team of 140. The average training period for a marketing team member is close to three months. The typical marketing professional is moving up faster with an average of being in their position for a little over 2.8 years before being promoted, up from 3.75 in our last report. Marketing professional travel has increased a bit, up to 31% travel as compared with prior 28%.
PHARMACEUTICAL MARKETING TEAMS ARE EXPERIENCING THE FASTEST GROWTH
Pharmaceutical marketing team growth has outpaced medical devices. Pharmaceutical marketing growth is up to 10% from 6% in our last survey, while medical device growth has dropped from 9% to 8%. Biotech growth has increased from 3% to 4%. Healthcare vendor growth has remained at 1%.
MARKETING DIRECTORS NOW EARN OVER 66% MORE THAN PRODUCT MANAGERS
Marketing directors earn, on average, 66% more than product managers. However, the increase is coming more from bonuses. In our last report, 66% of the differential came from base salary, which has now dropped to 50%. Product managers’ bonuses are, on average, 17%, while marketing directors’ are 27%. Product managers on average have a total compensation of $139K, marketing managers $164K, and marketing directors $232K.
TOP MEDICAL DEVICE REPS TAKE BACK THE COMPENSATION LEAD
Medical device reps have taken back the lead in top rep compensation, with totals averaging over $280K, up from $259K. Biotech top rep compensation dropped to $229K. Across the board, top sales reps’ earnings dropped from an average of $232K to 217K, while first year reps’ earnings increased slightly to an average total of $123K over 120K. Top sales reps’ and first year reps’ base salaries differ by an average of $44K. Sales reps’ commission payment timing has hardly changed, as 44% 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 $49,024, which has remained fairly static from report to report. The average cost of hiring the wrong sales person remains close to $80k.
Each month a marketing position remains open costs the company $50,150, up from just over $37,000 in our prior report. The cost of hiring the wrong person is almost double, costing a little over $85,000.
AND IT TAKES ON AVERAGE 4.5 MONTHS FOR SALES HIRES AND 5 MONTHS FOR MARKETING HIRES, COSTING COMPANIES ROUGHLY $220,000 PER OPEN SALES POSITION, AND $250,000 PER OPEN MARKETING POSITION.
First year sales rep positions fill the fastest and take just over 3 months, a month faster than our last report. Top sales rep, national accounts and sales director positions take longer at close to 5 months. Product management and marketing management positions take 4 months, and marketing director positions take over half a year.
Marketing positions take on average 5 months to fill.
Jacobs Management Group, Inc., a leading healthcare industry search firm, undertook this 2018 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 2019 Survey. We would appreciate knowing if this has been helpful to you.