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Salary survey: Compensated for quality

Article-Salary survey: Compensated for quality

Packaging professionals worry about cost cutting and consolidation, but realize that high-tech skills and dedication to quality are in demand.

Concerns over consolidation, cost cutting, and downsizing preoccupy pharmaceutical and medical device packaging professionals responding to this year’s annual salary survey conducted exclusively for Pharmaceutical & Medical Packaging News. And if these reductions weren’t enough, these professionals have added a new worry: healthcare reform. Several respondents indicated that they are bracing for the impact of health care legislation, which some fear could lower overall lower compensation in the industry.

But despite such fears, these professionals are satisfied with their current positions. A sizable majority (68%) rated their satisfaction a 4 or higher on a scale of 1 to 5 with 5 being “very satisfied.” On average, respondents have been with their current employers for 10.7 years, and they have been in the industry for an average of 16.4 years.

Nearly nine in ten respondents have graduated college, and 41% have completed post-graduate study or degrees. They also recognize that continuing to increase their technical skills demonstrates their worth, especially as FDA scrutiny appears to be heightening.

And salaries are healthy, with the current salary for an engineer/scientist involved in healthcare product packaging averaging $98,000. Department head/supervisors/managers earn $109,000 and vice presidents/directors $164,000, on average. Most respondents are not actively looking for new jobs.

Several survey respondents are worried about the overall economy’s effect on compensation. “Consolidation in industry and outsourcing/offshoring” will influence personal compensation, reported one respondent.

Others report grappling with “corporate downsizing and restructuring,” “cost controls,” “lack of growth,” “outsourcing of R&D work,” and “outsourcing of many aspects of manufacturing.”

Such realities subject respondents to a number of cuts. “Cost savings will cost me my job,” feared one professional. “Those of us with jobs are not in a position to ask for more compensation,” lamented another.

Professionals are also seeing “benefit reductions” and a “shift of medical costs to employees,” reported others.

Some see limited opportunities. “Increased sourcing of engineering services from countries with lower cost of labor will constrain availability of jobs,” explained one respondent. And, “continued pressure on companies to increase profits will continue to keep a lid on salary growth.”

“High unemployment will keep raises down,” predicted another.

Interestingly, respondents this year supervised slightly more employees than did those responding in 2011. The mean number of employees supervised in 2012 was 5.1, compared with 4.3 in 2011. And respondents from both years are working similar work weeks: the average work week in 2012 is 48.3 hours, compared with 48.5 in 2011. (Editor’s note: given the anonymity of the respondents each year, we cannot determine whether these are the same respondents, or even the same positions, but the comparisons are noteworthy nonetheless.)

Many respondents shared concerns about healthcare reform. One respondent worries that compensation will be affected by “potential downsizing/belt tightening of companies in expectation of cost pressures, government/healthcare reform measures.”

Others specifically mentioned “medical device taxation.” Wrote one professional: “The 2.3% medical device excise tax: Companies will need to cut costs to compensate for this added expense of doing business if this tax is not repealed.”

Wrote another: “The medical device tax is going to affect everyone and may lower compensation increases for FYE2014.”

And other professionals fear “healthcare reform and its impact on drug pricing.”

David Nexon, senior executive vice president for AdvaMed, believes that the “tax will have a negative impact on manufacturers,” he told PMP News. “Some of the added tax burden may be passed on to their customers, but most of it will need to be absorbed by medical device manufacturers given the highly competitive nature of the industry. We expect cuts in R&D and staff. The device tax is bad policy because the medical device industry has been a great job creator, and for the past 20 years medical devices have consistently accounted for a very low percentage—about 6%—of national health expenditures.”

Nexon reports that AdvaMed is working to repeal the law and encourages concerned medical device professionals to contact their senators.

When PMP News asked whether the increase in Americans with health insurance would increase demand for medical devices, Nexon said that only a “modest increase is expected given the age distribution of the newly insured.” In other words, medical devices are in demand more for older patients who likely already have coverage through Medicare or other payers.

Respondents said they await the outcome of the 2012 election.

Many respondents, however, felt that industry trends have very little influence over their compensation. “I don’t think a specific industry trend has an impact,” wrote one packager. “How our business does overall, and my contribution to that, affect my compensation.”

Market share and sales revenue determine compensation, professionals said. Several simply said it all depends upon “sales.”
Performance is crucial. “Biggest impact is releasing new devices to the market on time,” reports one respondent. “The continued performance of my site during a spin-off from the current owner,” reported another.

In demand are “highly skilled workers,” explained one professional. There is a “need for technical expertise” and a “need for companies to hire experienced personnel,” pointed out others.

Survey respondents report that compliance with FDA regulations is key. Driving compensation is the “ability to implement processes to comply with FDA regulations,” wrote one professional. Another spoke of “regulatory impacts and the increased pressure of compliance.”

Respondents report increased FDA oversight and issuance of 483s, so quality-minded packaging professionals may gain an edge. Skills that could influence a professional’s compensation include proficiency with “Quality by Design” principles, “lean manufacturing,” and “automation and Lean/Six Sigma,” write several respondents.

One professional indicated that his compensation depended upon “more innovative R&D work, help in production, and product design using QbD principles.”

Flexibility and responsiveness may also be key traits, needed to help companies handle “new and stricter FDA guidelines that are only communicated during the 510(k) review,” wrote one professional.

Other factors affecting company performance may also have indirect effects on packagers, such as “cost of goods sold” and “energy and utilities costs.” Globalization is also a challenge. Professionals who can help their companies devise winning strategies will be sought after and valued.

Data were obtained during an e-mail survey of PMP News subscribers. The survey was designed by PMP News and Readex Research. All 8388 unduplicated, emailable recipients were invited to complete a Web-based survey from April 30 to May 11. The survey was closed with 289 usable responses, a 4% response rate based on the net-effective mailout of 6538.

The results presented in this article are based on the 226 respondents who indicated that they work full time at organizations best described as one of the following: a manufacturer of medical devices, pharmaceuticals, in vitro diagnostics, or nutritional supplements. The sample was limited to only those with one of these jobs: engineering, packaging design, production/manufacturing, QA/QC, and research & development. Statistically speaking, these 226 represent an estimated 6600 industry professionals. The margin of error for percentages based on 226 usable responses is ±6.4 percentage points at the 95% confidence level. The margin of error for percentages based on smaller sample sizes will be larger. The survey was conducted in accordance with accepted research standards and practices.

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