Salary Survey Reveals Stability Now, Changes Ahead

Elections, anticounterfeiting technologies, and offshore outsourcing are some of the factors packaging professionals expect will affect their salaries and jobs in the upcoming year.

Kassandra Kania, Managing Editor

Packaging professionals in the healthcare product manufacturing industry are enjoying healthy compensation in 2004, according to the results of PMP News’ sixth annual salary survey.

A sense of economic stability characterizes this year’s study with an average annual income of $85,800—much in keeping with last year’s average of $88,500. More than half of the respondents earn $75,000, while only 8% earn less than $50,000—the same as last year’s numbers. (Note: salaries for 2003 are based on different sets of respondents.)

The percentage of employees who received a raise is also consistent with last year’s numbers. This year, 84% of respondents received a raise from their current employer, compared with 86% last year. The average raise was 5.1%. Of those respondents that received a raise, 85% indicated that it was not the result of a promotion or a change in job responsibilities.

Joe Peters, CEO of Scientific Search (Cherry Hill, NJ), a recruitment and staffing firm in the biotech/pharmaceutical sectors, anticipates that the industry will remain strong, and salaries will continue to increase. In the past few months, Peters has noticed an increase in the number of companies hiring employees, and some employees are starting to receive multiple offers. Two years ago, the company spent 50% of its time recruiting candidates for its clients. Today, the company spends 90% of its time recruiting and only 10% of its time developing new business. “That alone demonstrates that there is a lot of hiring taking place,” says Peters.

The Growth Factor

Many of the survey respondents attribute favorable compensation to the growth of their companies, the introduction of new products, and increased sales. In fact, several respondents cited their company’s performance as the single most important factor affecting their salaries. “My personal compensation is tied directly to the success of the company,” said one. “No other trend is particularly significant.” Also, “I think that the most important factor is the company growth,” said another, which in turn leads to an increase in salary.

Respondents also cited advancements in automation and the focus on anticounterfeiting technologies, such as RFID and bar codes, as having a direct impact on their compensation in the upcoming year. “Setup and running of new packaging areas will increase responsibility,” one respondent commented. “Anticounterfeiting (RFID, etc.) requires a substantial corporate investment and impacts packaging department demands,” wrote another. This “may lead to more recognition.”

Cutting Costs

While respondents generally seemed optimistic that their companies would enjoy successful sales in the year ahead, some still fear the impact of consolidation and downsizing. “Consolidation continuation may affect overall compensation through 2004 and into 2005,” predicted one respondent. “Downsizing, cost cutting, increased competition, and more people looking for jobs will decrease salaries,” said another.

Another factor that respondents cited as impacting their compensation is offshore outsourcing—particularly to Mexico and China. Currently, however, only 16% of those surveyed are outsourcing more than 50% of their packaging to a contract packager, and 31% do not outsource at all.

Importation

With elections around the corner, respondents believe that politics will influence the industry and their compensation in the year ahead—particularly in regard to prescription drug pricing and importation. “The 2004 election results could play a major role in our industry in the United States over the next four years,” remarked a respondent. Pressures to lower prescription drug prices could have a negative effect on salaries. “The increased regulatory environment and price protection
measures will continue to lower compensation increases,” said one respondent. Furthermore, as the controversy surrounding drug importation from Canada and other countries continues to play out in the year ahead, some respondents felt that it is likely to impact their compensation.

Job Satisfaction

Despite some uncertainty about job security in the year ahead, respondents indicated a high level of satisfaction with their current positions. A total of 65% have remained loyal employees, having worked for only their current organization in the past five years, and 39% have been employed by their present organization for 10 years or longer. Additionally, 60% are not considering a new job outside their companies at present. About a third of the respondents are strongly considering a new job search, and only 9% are actively looking for a job outside their organization.

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 June through July of this year. Surveys were mailed to 1200 domestic subscribers, representing 8100 packaging professionals who work for manufacturers of medical devices, pharmaceuticals, in vitro diagnostics, and nutritional supplements.

The sample was limited to only those with one of these job functions: engineering, packaging 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, purchaser, or secretary were manually omitted from the sample by the editors before the surveys were mailed.

Of the 1200 mailed surveys, 420 generated usable responses from subscribers, representing a response rate of 35%. 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 feedback of the 340 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 340 individuals represent an estimated 8100 industry professionals.

The margin for error for percentages based on 340 usable responses is ± 5.2% 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.

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