Medical Device Daily
When asked if he thought the medical device jobs market has a strong outlook for 2007, Brian Cole didn’t miss a beat.
“Without question, definitely,” Cole, the senior recruiting manager for Medical Device Recruiters (Heath, Texas), told Medical Device Daily. “We had a really strong year last year and I continue to see a lot of start-up activity, mostly in the Bay Area.”
Medical Device Recruiters is a boutique search firm specializing exclusively within the medical device industry.
Cole said some of the small to midsize companies he represents are seeing growth rates of at least 30% — some even at 40% and up — and have been growing that quickly for some time now.
“The larger companies are buying those startups and rolling them in because they’ve got the distribution channels. . . I think that’s good for everybody,” Cole said.
From the candidate’s perspective, Cole said it’s a great time to be looking for a job in the medical device industry. But that could mean trouble for the companies trying to compete for human capital.
“They’ve got to figure out how they’re going to keep employees without people coming in and [recruiting] them. If you’re a candidate, the money is going to be out there, and people are going to be looking more than ever,” Cole said.
Cole said he’s seen companies pay up to $5,000 more than the normal starting salary to hire the right person for the job.
Richard Aarons, PhD, managing director of the Global Medical Device and Diagnostics Sector for recruiting firm Korn/Ferry International (Los Angeles), agreed that hiring managers are having a hard time recruiting qualified candidates.
“It’s a simple supply and demand equation,” Aarons told MDD. “There is a war for talent, they’re fighting for the good people.”
But at the executive level, companies are specifically looking for leaders with experience in successfully taking a start-up company through the regulatory process, Aarons noted.
“If you have experience in the success of an early-stage company, took it through commercialization and ultimately some kind of equity event, you are golden in this market,” Aarons said.
Ironically, those CEOs probably made a pile of money the first time they did that, and now they have a chance to do it again with a different company, Aarons added.
“That engine drives this industry — somebody can have a good idea, get some energy behind it and some investment into it . . . they’ll use venture capital funds or angel investments to take that company to a stage where they have a workable product. The next stage is FDA approval, then they need the CMS [Centers for Medicare and Medicaid Services] to bless it with reimbursement, then that thing has a lot of opportunity,” Aarons said. “And at each stage through that process the value goes up.”
That’s when a large company like Johnson & Johnson (J&J; New Brunswick, New Jersey) will acquire it.
“Ultimately the goal is either to get an IPO, which few do, or get acquired by one of the big guys which is the more common route. J&J is the best example of the kind of company that takes these companies and acquires them and the entrepreneur walks away reasonably wealthy and the VCs walk away reasonably wealthy,” Aarons said.
Last year, Korn/Ferry said it completed more than 6,200 executive search assignments.
Though there is always some level of growth in the medical device industry, Cole attributed part of the strong outlook for jobs in this sector to a stable economy overall.
“I think the economy overall is good. Last year was a good year and this year is going to be a great year,” Cole said.
Like the med-tech industry as a whole, recruiters in the orthopedics and spine markets also anticipate a strong outlook for 2007.
“We are working with several companies that have multiple openings for experienced technical and scientific positions. There is a shortage of seasoned help in clinical and regulatory affairs, product development engineering, and marketing,” Phil Mercier, president of Masters Medical Search (Fort Wayne, Indiana) told MDD. “With regard to the need for experienced people, it is a candidate’s market. The spinal sector in particular remains strong, with many new companies coming on to the scene.”
Masters Medical Search is a recruiting firm focused on the implantable device industry, particularly the orthopedics and spine sectors.
As for signs that the jobs market in the device industry will continue to be strong this year, Mercier said the aging population and new treatment modalities play a big role in driving new hires and that minimally-invasive techniques are driving development.
But there are some factors that could challenge the marketplace in 2007, Mercier said.
“Within the reconstructive hip and knee replacement market, pricing pressure may cause pressure on headcount,” Mercier said. “One of the largest reconstructive companies laid off about 50 people last year, but that seems to be isolated. Average selling price has experienced strong growth over the past five years, but technology ‘mix shift’ may be losing some momentum. Non-competes are also a factor in the search for relevant experience.”
Mercier also said there is a belief that mergers will occur in the implantable device industry and consolidation could have a negative impact on the companies involved.
Still, he said, “our business grew 40% last year and we anticipate similar growth in 2007.”
Aarons said he also has noticed a trend towards companies hiring executives with more consumer orientation – which is perhaps even driving people from what were traditional consumer-recognized markets to the medical device market, he said.
“That’s a move towards recognizing that the patient is playing an increasing role in the purchasing of these products,” Aarons said.
For example, he said, for the treatment of sleep apnea a patient used to go to a sleep clinic where they would be diagnosed and recommended a particular piece of hardware to use at home. When they found out that some products are more user-friendly and more comfortable to wear than others, patients started deciding what piece of hardware they were going to buy.
That created a need in the industry for companies to hire executives who were better skilled at measuring and determining customer preferences, Aarons said.
“It makes perfect sense. But five years ago it wasn’t as [obvious] as it is today.”