The Jacobs Management Group Salary Survey
Healthcare is a fascinating industry. While the winds of chaos swirl around the economy, our industry continues to show positive signs in many areas. Yes, compensation for one group may decline, but for others it continues to grow. The size of sales forces changes from year to year, but overall the job market remains strong. There are always political forces forming around one issue or another, but our people march forward, intent on improving care, discovering new ways to help patients, creating efficiencies and building bridges with hospitals, pharmacies, payers and other players they interact with.
These statistics, once again gathered from over 600 people at more than 500 companies, give you a current snapshot of how your colleagues are doing in terms of compensation: the 2019 Jacobs Management Salary Survey results.
From Jacobs Management Group CEO and HS&M Publisher Cari Kraft: The 2019 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 force growth increased to 6% across all sectors, even better than last year’s number of 5.5%. The healthcare vendor sector topped others at 7.5%. This is a change from our last survey which had the sectors growing in the order of biotech/medical device, pharma, and healthcare vendor.
- Medical device reps continue to stay in the lead in compensation, with totals averaging over $250K, even while overall rep compensation was an average of 204K.
- Open positions continue to be a pressing problem, especially in a full-employment economy. Each month a sales position remains open costs the company $60,875, a 20% increase over last year’s $49,024. Open marketing positions cost $38,750 on average.
- There are a lot of changes in the growth of teams. Pharmaceutical marketing growth is up to 18%
This report summarizes the results from the Jacobs Management Group, Inc. Compensation Survey conducted in 2019. 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. 62% of respondents had titles of manager or above
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The continued good news is that both sales and marketing teams are forecast to grow across all sectors.
Sales force growth increased to 6% across all sectors, with the largest team growth of all sectors being healthcare vendor at 7.5% this year. This is a change from our last survey which had the industries growing in the order of biotech/medical device, pharma, and healthcare vendor. Pharmaceutical companies still have, on average, the largest number of reps per company, at an average of 935 reps, as compared with the average across all the healthcare sectors of 559. The timeframes for sales promotions remained the same at approximately four years and nine months, a slight increase year over year but a consistent metric for the past three survey sets which showed 4 ½; years. Average sales income increases approximately 5% 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 161. The average training period for a marketing team member holds at close to three months. The typical marketing professional is moving up with last year’s report with an average of being in their position as compared to 2.8 in 2018. Marketing professional travel has decreased down to 27% travel, as compared with prior 31% from last year’s report.
PHARMACEUTICAL MARKETING TEAMS ARE CONTINUING TO EXPERIENCE THE FASTEST GROWTH
Pharmaceutical marketing team growth has outpaced all other categories again. Pharmaceutical marketing growth is up to 18% from 10% in our last survey, while medical device growth has dropped from 8% to 6%. Biotech growth has remained steady at 4%. Healthcare vendor growth has increased dramatically from 1% to 6% this year.
MARKETING DIRECTORS EARN OVER 71% MORE THAN PRODUCT MANAGERS
This year, marketing directors earn, on average, 71% more than product managers. In our last report the differential in base was at 50% and this year, 59% of the differential comes from base salary. Product managers’ bonuses are, on average, 16%, while marketing managers’ are 22%, and marketing directors’ are 25%. Product managers on average have a total compensation of $140K, marketing managers $175K, and marketing directors $239K, all increases from last year.
TOP MEDICAL DEVICE REPS MAINTAIN THE COMPENSATION LEAD
Medical device reps have kept the lead in top rep compensation, with totals averaging over $250K. Biotech top rep compensation dropped to $164K. Across the board, top sales reps’ earnings dropped from an average of $217K to 204K, while first year reps’ earnings increased greatly to an average total of $132K over 123K. Top sales reps’ and first year reps’ base salaries differ by an average of $35K. Sales reps’ commission payment timing has hardly changed, as 40% of sales rep commissions are paid monthly, 53% are paid quarterly.
IT COSTS EVEN MORE $$$ TO LEAVE POSITIONS OPEN
Each month a sales position remains open costs the company $60,875, which increased over $11K per month year over year. The average cost of hiring the wrong sales person increased 4K to close to 84k this year.
Each month a marketing position remains open costs the company $38,750 down from just over $50,000 in our prior report. The cost of hiring the wrong marketing person is almost double, costing a little over $75,500.
AND IT TAKES ON TIME TO FILL A SALES POSITION AVERAGE 4.5 MONTHS FOR SALES HIRES AND 5 MONTHS FOR MARKETING HIRES, COSTING COMPANIES ROUGHLY $273,937 PER OPEN SALES POSITION, AND $193,750 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 5 months.
Marketing positions take on average 5 months to fill and are consistent with last year’s data.
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Jacobs Management Group, Inc., a leading healthcare industry search firm, undertook this 2019 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.