Compensation and Hiring Report
The Jacobs Management Group Salary Survey
Ours 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.
These statistics, gathered from over 800 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. This year, in addition to Sales, Marketing, Regulatory, Quality, HR and Supply Chain, we have added R&D and Clinical. We also pulled in research from external industry sources to provide you with a one-stop comprehensive report. We would like to thank all of those who participated in making this year’s response our largest ever. 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: • 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 industries growing in the order of biotech/medical device, pharma, and healthcare vendor. Medical device reps continue to stay in the lead in sales compensation, with totals averaging over $250K, even while overall rep compensation was an average of $204K.
Compensation varies greatly across functions with Regulatory VPs leading the compensation scale at an average package of $328K. R&D VPs come in close at $312K, followed by Quality and Supply Chain VPs in the $290K range and HR at $270K. For our sales, marketing and clinical analyses we only went up to Director levels, which had total comp averages of $260K for sales, $240K for marketing and $220K for clinical. However, based on a search of our own internal database, Sales VP packages have the greatest range with some topping out over the $500K mark.
The cost of poor hiring decisions increases yet again, along with the cost of open positions. The cost of a sales mishire averages $84K, a marketing mis-hire $75K, and a regulatory mis-hire $100K. 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, per month, on average.
Regulatory is one of the fastest growing functional areas with over 80% of the respondents in regulatory indicating that they are going to be adding team members. That growth and what we would call a “candidate driven marketplace” have contributed to positions being open for long periods of time before being filled. HR positions are the fastest to fill with an average of 4 months, followed by sales at 4.5 months, marketing at 5 months, clinical at 5.5 months, quality at 6 months and regulatory with the longest at 7 months.
Except for the Human Resources function, over 75% of respondents found that their best talent comes from within the industry.
The biggest hiring struggle companies face in most functional areas is identifying top candidates. Enticing the candidates with competitive compensation comes in second. Respondents rank compensation and work environment/culture as their top motivating drivers. However, when asked how their companies were doing in these areas, they rated their employers below 3 on a scale of 1 - 8.
Given the high employment state and struggle to find top talent, it is not surprising that 83% of employers are using outside talent to supplement direct hires creating an “alternative workforce.”