LANDING A MEDICAL DEVICE SALES JOB

Originally Published MDDI December 2005 - Reprinted with permission.

 

How healthy is the job front in the medical device industry? Very healthy—to the point where both those content with their current jobs and those looking for new ones are getting what they need.

According to MD&DI’s annual salary survey, the overall picture is one of stability and security. A majority of respondents were satisfied with their current jobs, felt that their positions were secure, and had no interest in looking for new positions.

There’s good reason for such feelings of security. “I am so impressed by the dynamism of this business,” says Ron Cassie, president of the Cassie-Shipherd Group (Toms River, NJ), an executive search firm that specializes in healthcare. “When things were down, it didn’t die. [The industry] may take a downturn, but unlike steel, chemicals, communications, and the like, it does not go through the floor.”

But those who are looking are finding the most favorable employment environment in years, according to recruiting and human resources experts that specialize in the device industry. In part because so many are satisfied with their current jobs, device companies have been upping their offers to get people to move.

“There are a considerable number of jobs out there in middle to upper management. Our placements in the medical device industry are up 27% [compared with a year ago], and the salaries of those placed are up 11%,” says Ron Herzog, president of New York City’s FPC National. “The offers are very strong. When highly qualified people want to make a move, they are doing very well from a salary and benefits standpoint, and their relocation costs are often being covered, too.”

More Products = More Jobs

Why have the stakes become higher? There are several reasons. One is that the investment dollars flowing into the device industry have increased, creating more jobs at start-ups. Another is that companies of all sizes have boosted their product development efforts in recent years.

“Things started to open up in the fourth quarter of 2004 and have been very solid this year,” says Dan Murray, owner of Medical Search in Michigan City, IN, which works primarily with start-ups. “The venture capital investors and others have been pouring money into the industry. As a result, there is a need for people to develop medical technologies.”

“The buildup has been enormous. Clearly, the value of offers has gone up,” says Cassie. “We have seen more signing bonuses. That’s always a sign that a sector is in good shape. When signing bonuses go away, that means supply has outstretched demand.”

“So much activity can only be held in check for so long,” he explains. “We have a huge demand for health services, and this is a wealthy country. There has been a tremendous amount of money available to drive innovation. There is always a demand for marketing and sales people, but we’ve seen a big increase in demand for regulatory, clinical, and quality people.” He says that those skills are needed when companies are gearing up to take products to market. “I think by now most companies have realized that you can’t fight FDA, and you need to find people who know how to work within the guidelines,” he notes. “Another healthy sign is the demand for business development people. They got dropped early when the market was down, but now they’re back in force.”

Another factor driving the stakes higher is that since 2004, small companies have had opportunities to go public. Before, the only exit strategy for investors was acquisition by a larger company. The prospect of going public has spurred more companies to create regulatory, quality, clinical, and manufacturing infrastructures. That means they need to find people experienced in those fields.

Joseph Mullings, president of the Mullings Group, based in Delray Beach, FL, notes that 2005 ended up being a better year than originally forecasted. “I saw venture money flowing more freely. I also saw acquisitions by larger device companies slow down a bit. Some were having ongoing integration issues. That allowed smaller companies to hang on longer, not sell out too early, and build sales and marketing forces. Before, when the IPO market wasn’t strong, they tended to sell out early. As soon as they had good clinical data, they put up a for sale sign.”

Large companies also have devoted more resources to building infrastructure, Mullings says. “Another positive trend was the end of the great race for the drug-eluting stent,” he says. “Companies like J&J and Boston Scientific, which had devoted themselves in recent years to building up their stent businesses, now needed to look at alternative revenue streams to keep Wall Street happy. So we saw buildup of other areas, including urology, gastroesophageal reflux disease, nonstent interventional therapies, and orthopedics. Now that they’ve got an influx of cash from stent revenues, they are growing those franchises. There is aggressive product development across the board, which is good for everyone.”

Ted Ginsburg, consulting principal of Cleveland-based Top Five Data Services Inc., agrees. “The bigger companies are looking to keep product pipelines full, so they are buying smaller companies with products that have a clear path to FDA approval or that are ready to take to market,” he says. “That then creates movement. A lot of people are moving because their companies are being bought out, or their companies are failing because their products aren’t taking off. It’s more of a have-to-move situation, or where they don’t like their new environment,” he says. “A lot of people we see are entrepreneurs who are having a hard time fitting into a bigger company. The overhead types tend to go in a merger situation, while the clinical, R&D, and regulatory professionals tend to stay.”

More FDA Requirements = More Jobs

The top in-the-trenches professionals who don’t want to stay, however, find themselves in high demand.

“Clinical and regulatory professionals had a banner year,” says Mullings. “Companies were aggressively pursuing new technologies. Because of this, they needed senior-level clinical and regulatory people to implement strategies. This was especially true of small and mid-sized companies. I’ve never seen the demand this voracious before. That bodes well, because it means the pipelines are full.”

“I see a lot of movement in the quality, product development, and clinical research areas,” agrees Herzog. “There seems to be more products and more research, which leads to more development and manufacturing. The movement is not money-driven in most cases. It’s really about job content and career growth. Ninety percent of the people we place are currently employed. They are looking for good opportunities. Money is not a major motivator.”

A major reason that clinical and regulatory professionals have become more in demand is that FDA requirements for the device industry have gotten tougher. Today, most device companies must be able to manage larger trials, provide FDA with more data, and in some cases, manage and report the results of postmarketing studies.

“There is a great need for clinical trial and clinical affairs professionals, both at the field and staff level and in executive management,” says Roger Brooks, president of Leading Edge Medical Search (Boulder, CO). “Clinical trials seem to have become more and more ample, requiring more experience and skill to execute. The same idea applies to the regulatory area. There is a need for strong regulatory people who are able to develop solid regulatory strategies in combination with clinical activities. FDA requirements have gotten more rigorous.”

Finding the right clinical personnel has become particularly difficult, Brooks says. “We don’t have a medical system that is training people to be clinical affairs professionals,” he says. “The people who have the skills to do it don’t necessarily have the type of personality suited to working for industry as a clinical affairs professional. And for those who do enter it at the staff level, it’s very demanding and has a high burnout rate. That shrinks the pool of people who can be promoted to senior positions. What every company wants is someone who has successfully executed a PMA clinical trial, but those are few and far between.”

More Retirements = More Jobs

What this means, says Brian Walker, president of The Wise Group LLC (Fairfield, CT), is that companies are competing for talent more ardently than ever.

“With the dawn of baby boomers retiring, companies are throwing perks and enormous amounts of money at executives so that they are not caught short on talent. Some companies are even creating new positions in order to bring talent on board,” he says. “A lot of people would think money is the driver, but what it comes down to is appreciation. Does the company value individuals and their accomplishments? The ones who understand that people want some sort of recognition are the ones who are doing very well on the hiring front right now.”

However, companies with promising products and the right corporate culture aren’t going to have too much difficulty attracting the best people. “We have been incredibly lucky at finding the right people at the right time,” says John Shannon, president and CEO of Incisive Surgical Inc. (Plymouth, MN). “It surprises me how easy it has been to attract people. One factor is that there are a number of entrepreneurial medical device professionals here in the area.” These people like intellectual challenges, he explains. “They live for this type of environment, where no one has the luxury of wearing only one hat, and we are all player-coaches. We work very hard, but we are all involved. You never know who the most important person is at any given time.”

Shannon’s firm and others nearby benefit from a vast talent pool in a region known as a hotbed for device companies. However, recruiters say the Twin Cities region has experienced a different pattern of employment trends than the industry’s two other major hotbeds, California and Massachusetts. The Twin Cities has had a healthy amount of movement in recent years, and it got more vigorous in the past year. The job market in California was stagnant for a few years, but picked up this year. Movement in Massachusetts has been pretty consistent for the last 10 years, and this year wasn’t much different.

California activity has taken off because of increased venture-capital investment. Brooks sees dazzling opportunities there in the near future. “An issue with luring people to California is the high cost of real estate,” says Brooks. “Because of that, it’s very difficult to bring talent into the state. So most California companies end up hiring locally, especially ones that can’t afford to pay relocation costs. But there are a tremendous number of opportunities for young, sharp people in engineering and related professions. My advice is that if you’re good at what you do, go to California, pay the high cost of rent, and work for a promising start-up. After a few years, your worth will be substantially greater than if you hadn’t taken that kind of risk.”

More Jobs in 2006, Too

Is the encouraging level of opportunity likely to carry over into 2006? Recruiters are optimistic. Most of the factors contributing to the movement in 2005 should remain, and some new issues will come into play.

“There will be changes in equity programs at the executive level as the result of an accounting rule change known as FAS123R,” says Ginsburg. “It will become more expensive from a financial-statement standpoint for a company to grant stock options in 2006 and forward. Before the change, options did not count as expenses until they were exercised. Now, they will be counted as expenses when the executives have the ability to exercise them, whether they actually do or not. As a result, some companies may cut back on what they grant. That might spur more movement in the executive ranks. Fair-market-value stock options were the predominant method by which employers in the device industry gave shares to employees.”

If demand does continue to outstrip supply, device firms will have to be proactive in how they find new workers and savvy in how they keep them. “Forward-thinking companies are using recruiters for talent scouting, in effect,” says Walker. “Their talent pool may be drying up from within, and we have access to up-and-comers. They need to ask themselves if they are doing what is necessary now to ensure their survival.”