Salary survey reflects uncertainty -- But hope remains

Pharmaceutical & Medical Packaging News staff

Respondents to this year's salary survey predict an unstable year ahead, but many are optimistic that the economic slowdown will begin to show improvement—and so will their compensation.

Kassandra Kania, Managing Editor

Several months ago, the pharmaceutical industry was surprised and somewhat unsettled by the merger of Pfizer and Pharmacia. Resulting in the world's largest drug company, the merger increased the pressure on other industry players to consider merging to remain competitive in a slow market.

This latest acquisition brings to light the concerns of many respondents to PMP News's fourth annual salary survey, who cite mergers and acquisitions as a trend that will affect their personal compensation in the upcoming year. Respondents to last year's survey expressed similar concerns, indicating that mergers and acquisitions are continuing to affect the careers of packaging professionals.

A significant number of respondents believe that mergers and acquisitions will lead to further downsizing, reducing the number of positions available: "Consolidation within the industry is reducing the number of positions and opportunities," says one respondent. Another comments that mergers and the resultant integration of common positions and responsibilities will impact packaging jobs. And with the decrease of available positions brought about by such mergers, competition between job seekers will likely increase. "Mergers and acquisitions seem to flood the job market with qualified professionals," notes one respondent. 

Downsizing as a result of a merger may also affect those whose positions remain intact. According to one respondent, "downsizing [leads] to fewer advancement opportunities." Only 15% of this year's respondents who received a raise from their current employers did so as a result of a promotion or change in job responsibilities.

However, on a more positive note, the same respondent feels that the "decreased workforce size [leads] to improved compensation for highly skilled workers." This year's respondents showed an average salary of $79,400—an increase of $4,700 over last year's numbers, which seems to support this statement. (Note that the average salary for 2001 is based on a different set of respondents.) The median salary for 2002 also reflects a healthy income for packagers, with 50% of the respondents earning $75,000 or more. Respondents also appear to be satisfied with their jobs, having worked for their current employer an average of 8.9 years.

For salary figures and other statistics on positions in R&D, package design, production, manufacturing, QA/QC, and engineering, see below.

HARD TIMES

The economic slowdown is another factor most often cited by survey respondents as influencing their careers and income levels. With a lack of new products, government pressure to lower drug costs, and the expiration of patents bringing drug companies into competition with generic-drug manufacturers, pharmaceutical companies are cutting costs, and employees are feeling the pinch. "Every industry is having budget cuts," says one respondent. "This affects ways of conducting R&D of new products and improving current products."

"The overall economy and competition is driving prices down," comments another. "[This] plus low inflation will result in low increases." Several other respondents agree that the economy has an impact on compensation, resulting in lower raises and bonuses.

In an effort to cut costs, some companies are moving production to other countries—a trend that several respondents predict will jeopardize their positions. "Our Elkhart, Indiana, plant will close, forcing me into early retirement," says a respondent. Other companies are importing labor instead. One respondent relates that the "importing of labor from foreign countries, allowing engineers to work in this country on temporary visas," is affecting personal compensation.

BRIGHT SPOTS

Although most respondents see the economic slowdown as having a negative effect on their compensation in the year ahead, some feel positive about the direction in which their company—and the industry in general—is headed. Many recognize that their raises and bonuses are directly related to the company's performance and the quality of its products. Employees may therefore feel more like a part of the team, since their actions affect company profit. "My personal compensation package is tied to corporate performance, which is directly tied to sales," says one respondent. "We need to sell our product for us all to do well."

"My sector and company is growing at 10 to 15% a year," another comments. "There will be many new products launched and thus opportunities for compensation rewards." When sales do take off in such lean times, employees may feel more job satisfaction, knowing that their efforts contributed to a turnaround.

Many respondents feel that the increase in FDA regulations will also play a major part in determining their compensation—and most see the outcome as favorable. "FDA regulations are going to continue to play a major role in the packaging of healthcare products," says JoAnn Hines, founding executive director of Women in Packaging Inc. "Whether or not this affects salaries remains to be seen. However, if the regulations demand further education, then the advanced degrees will increase salary expectations."

In terms of the level of education obtained, 45% of respondents indicated that they graduated college, while 28% had postgraduate degrees. 

Several respondents agree that in the current job market, continued education is a necessity. "I have tried to stay ahead of my peers in having knowledge that others do not have," one respondent revealed. "This helps keep my job."

For those who are seeking employment or considering further education, use of the Internet as a resource is gaining in popularity. According to survey results, 24% of respondents used the Internet to search for a new job during the past year. "Jobs are going to be tougher to find and specialization even more exaggerated," says Hines. Her organization has launched www.packaginguniversity.com, a career and educational Web site to provide packaging professionals with education, training, and professional development resources. She has noticed an increase in pharmaceutical and medical packaging professionals seeking further training and education. "Technology is changing so fast," she says. "There are always new trends and materials coming into the market. The innovations and market demands present the industry with an ever-changing mix of needs. There have been numerous instances where packaging programs failed because the nuances were not appropriate for the market. Because of things like this and regulations regarding healthcare packaging, we see a lot of veteran professionals looking for advanced information."

In addition to further training and job searches, respondents are using the Internet to help them in their current jobs: In the last 12 months, 78% used the Internet for researching suppliers; 55% interacted with colleagues via e-mail, chat rooms, etc; and 43% purchased materials and/or equipment on-line.

THE FUTURE

Although many healthcare packaging professionals are uncertain about what the next year will bring, there is still a sense of optimism and a belief that the industry will begin to show improvement. Several respondents see new products on the horizon, including an increase in tamper-evident packaging, in response to the events of September 11, 2001. Others see aging baby boomers driving the growth of healthcare companies.

Respondents are also indicating satisfaction with their current positions. According to survey results, 71% of respondents indicated a high level of satisfaction with their current positions. Three in five have remained loyal employees, having worked for their current organization for five years or more, and 36% have been employed by their present organization for 10 years or more. Furthermore, only 8% are actively looking for a job outside their organization. As the economy begins to recover, so will employees' compensation and opportunities for advancement.

METHODOLOGY

The data for this year's survey were obtained during a mail survey of PMP News subscribers. The survey was designed jointly by PMP News and Readex Inc. (St. Paul, MN) and conducted April through June of this year. Surveys were mailed to 1200 domestic subscribers, representing 10,015 packaging professionals who work for manufacturers of medical devices, pharmaceuticals, clinical diagnostics, and nutritional supplements.

The sample was limited to only those with one of these job functions: engineering, package design, production/manufacturing, QA/QC, and research and development. To ensure representation of key recipients only, known suppliers to the industry and those with job titles of administrative assistant, attorney, buyer, CEO, CFO, consultant, owner, president, purchasing, or secretary were manually omitted from the sample by the editors before the surveys were mailed.

Out of the 1200 mailed surveys, 536 subscribers returned usable responses, representing a response rate of 45%. Because usable returns were received from less than half the survey sample, the possibility exists that those who did not respond might have answered differently than those who did. Survey results should be interpreted with this in mind. 

The results presented in this article are based on the 428 respondents who indicated that they are involved with healthcare product packaging and work full time for one of the types of manufacturers listed above. These 428 individuals represent an estimated 8000 industry professionals.

The margin of error for percentages based on 428 usable responses is ±4.6% at the 95% confidence level. The margin of error for percentages based on smaller sample sizes—males or females, for example—will be larger.

The survey was conducted by Readex in accordance with accepted research standards and practices.