When Determining Acceptable Adequate Compensation Level

As medical device manufacturers and their contract manufacturers begin to hire more talent in light of a growing economy and strengthening revenue streams during this 2004 election year, they will need to entice the best talent available. Although it appears to be a jobless economic recovery, top-flight, accomplished experts in healthcare products will nevertheless be highly sought after. This will give skilled device professionals better leverage in negotiating their compensation and benefits packages encompassing their pay, various bonuses, vacation and flex time. Employers must have a strong magnet to attract and retain these quality people, who in this new economic environment have their choice of companies and positions.

After decades of experience recruiting top-flight professionals for medical device and healthcare companies, I have seen a cyclical contraction and expansion in the job marketplace. Kuhn Med-Tech has assisted companies ranging from entrepreneurial to large corporations with all their hiring needs. However, as medical technology is unfolding, demand has risen for specialty skills required to develop innovative products and services.

Engineers, scientists, clinical, regulatory and quality specialists, marketing, sales and senior management personnel with backgrounds in the newer, emerging technologies can sometimes call their own shots. Companies developing smaller and more effective implantables, electronics, robotics using space-age materials such as nitinol and titanium and micro-miniature, minimally invasive and catheter-based drug-device combination products such as drug eluting stents are very attractive employment and investment options. Device development in the areas of interventional cardiology, urology, pulmonary, vascular, neurovascular, internal, obesity and orthopedic medicine are being targeted by both large companies and venture-capitalized startups. Also, many corporations are developing products to not only diagnose diseases but also to target devices for therapeutic purposes.


Past Practices

Medical device industry compensation standards and practices have changed dramatically during the past 10-15 years, evolving into fairer and more profitable situations for today's key employees. In the 1980s, small companies such as Advanced Cardiovascular Systems, now known as Guidant, retained their best employees with large yearly bonuses of up to 35% of salary based on personal performance and company successes. They did so to combat the allure and stability of larger companies. That worked for several years until new startups began to lure the best engineers, scientists and leaders with an assortment of incentives, including huge stock options with strike prices a fraction of what the investors paid, vesting periods of three to five years, cash and stock bonuses, profit-sharing and the opportunity to share in the leadership and riches of successful new ventures. At the same time, larger companies began eliminating middle managers, consolidating their operations and reducing staff, thus shaking the stability and attractiveness of larger organizations.

More recent compensation packages including stock options are far more attractive and stimulating then ever before. Senior management are much more challenged today to develop innovative ways to lure the best people by offering telecommuting, flextime and options more conducive to 21st century lifestyles. Today's progressive companies measure success not just by a time clock but rather by individual and collective outstanding performance resulting in sales revenue and profit rather than the number of days spent in the office.

Virtual companies interfacing through web conferencing, privacy-protected e-mails, cell phones and intermittent face-to-face meetings are emerging, and with outsourcing becoming the norm, cost-savings are enormous. These defining events have not hurt the medical device industry but indeed are helping to define its future. Now a company has the flexibility to hire unique, specialty-skilled employees even if they live in another state or country without always incurring a costly relocation price tag. These people can spend more time working out of their home offices creating new products or developing fresh ideas rather than stressing out in bumper-to-bumper traffic on a dangerous wet and icy freeway. It also benefits the corporation because it frees up office space, relieves direct supervisory responsibilities. It is quite a temptation for people across the country that would never uproot their families to contemplate joining an organization far from home in a crowded city or in rural areas that were never considered as possibilities.


The Intangibles

Gauge what factors are most important to you. Consider job title, skill sets and experience required, geographical location, job responsibilities, and company culture. Large companies such as Medtronic, Johnson and Johnson, Baxter and Boston Scientific may offer excellent salaries but have a lot of red tape and meetings, whereas entrepreneurial environments may provide better growth potential and allow you to have more influence in bringing products quickly to the marketplace. Large urban cities in California, New York Massachusetts and New Jersey may offer higher salaries, but the cost of living is also much higher.

Consult with your executive recruiter about published salary surveys to determine how much you will put in the bank at the end of a pay period rather than the actual dollars you earn. Talk to your colleagues and peruse the Internet about the going rate for your skill sets. The truth is that employers base their offers of employment on many factors, including your current salary, relocation, cost of living differentials, their internal salary guidelines for the defined position, skill sets required, how fast they need to fill the job to keep their projects on schedule, how long they have been looking and how they assess your potential contributions. Your education, talent, potential for growth, positive attitude, personality and especially direct professional experience in the same product arena will ultimately determine their financial limits.

Besides salary, compensation may consist of several elements adjusted to each person's unique situation. Some possible scenarios for today's key new employees may include: