The Blogs of Dave Murphy: Giving Thanks in the Job Market
On Thanksgiving I took some time to ponder those things for which I’m thankful and it got me thinking about comments I’ve been hearing from hiring managers as they try to find people to fill openings on their team. For many employers it’s becoming less about finding specific technical skills or accomplishments in a resume and more about finding people with integrity, character and – most of all – humility. The matrixed based management structure prevalent in most organizations today requires that employees collaborate closely with their team members, and that they take time to thank and praise colleagues when appropriate as well as acknowledge their own faults and mistakes. The ability to be genuinely humble in this type of environment is a trait that is becoming harder to find.
As a candidate in a job interview it can be very tricky to express humility while also proving that you’re good at your job. An interview is a time to proactively communicate your attributes and positive qualities, which can be perceived as “bragging.” Hiring managers want to know that, although an individual has been working as part of a team, he or she can demonstrate individual contributions that have made a difference in the team achieving its goals. So candidates have to provide that evidence, but in a way that makes it clear that they value their colleagues and don’t take all of the credit for a team’s success. Team leaders don’t want to hire “Lone Wolves”, no matter how talented they may appear. Hiring managers want people who are genuinely thankful for the opportunity to be a part of a high-performing group of professionals. So as a candidate it’s important to balance “bragging” statements with humility and acknowledgement of other’s contributions.
A frequently asked question of candidates in the interview process is about perceived weaknesses or “areas for development.” Most interviewers will point out that we all have them, and will sometimes frame the question by asking what a candidate’s supervisor would say about their areas for improvement. This is another measurement of one’s humility and it is important to be truthful and genuine in your response. Hiring managers are generally not impressed when they hear something like, “sometimes I work too hard and have to take a break to achieve work-life balance.” That may be true but it’s a very predictable response and doesn’t get to the issue of whether or not you’re able to be self-critical and willing to acknowledge your faults. One candidate told me that his boss pointed out that he had a tendency to talk too much in meetings, so he deliberately set out to spend more time in active listening in order to help make the team more effective, at the expense of his own self-promotion.
Sometimes I’m asked if the trend toward individual attainment and away from humility and thanksgiving in the workplace is a by-product of our mas-and-social-media fueled culture. I think that’s true to some extent but it doesn’t automatically mean that younger Millennials are necessarily going to be less humble than Baby Boomers. I think that everyone, regardless of age and experience, must recognize the forces at work here and take steps to self-regulate themselves, whether working on cross-functional teams or answering interview questions.
Hiring managers are seeking that magic balance of skill and will. When they talk about a candidate’s lack of “personal chemistry” or “cultural fit,” they are most often referring to their perception of the candidate’s will: not just the willingness to work hard, but also the willingness to be humble and grateful for the opportunity to be part of a team. It is an increasingly important trait in the workforce and one we should all work on improving. As always I welcome your questions and comments.
The Blogs of Dave Murphy: The Dysfunctional Product Launch Blues
The old adage says “you better be careful what you ask for because you just might get it.” In many ways that captures the spirit of the new product approval process in the BioPharma and Med Tech industries. A company works for years to develop a breakthrough therapy or diagnostic test and when it finally gets approved, then what? The inventors and product developers have completed their job and now all eyes turn to the marketing department – and you better have your plan in place. Nothing is more stressful – and more rewarding – in the career of a marketing professional than the opportunity to launch a truly innovative product. After citing the opportunity for growth and advancement, it is the most common reason that marketing professionals share with me when describing their motivation to make a job change. For most people it only happens a few times in their career, and of course it’s important to make the most of it.
When everything goes smoothly and according to plan everyone celebrates a successful launch and thanks the marketers for doing a nice job. They had leading-edge technology, put together a reasonable plan, and didn’t screw things up. But what about those occasions where things don’t go so well? Sometimes launches don’t meet expectations, or they are so stressful when they are successful that the culture of the organization suffers dramatically. In those instances a marketing team can end up with the Dysfunctional Product Launch Blues.
Similar to a doctor routinely hearing complaints and bad news from patients, when I’m speaking with people about their interest in making a job change it’s often a bad experience in their current situation that has them talking with me. The negative experience can be driven by many things, but a common malady is DPLB. I’ve heard it said that “you never get a second chance to make a first impression” and that the first six months of a launch will usually set the trajectory of the product forever. So there’s a great deal of pressure to get it right, which means long hours, frayed emotions, and the potential for dysfunction in a marketing department.
I recently placed a Marketing Manager in a company that is in the middle of launching it’s first major innovation in about 15 years. It’s a first-in-class product and expectations are running high. While colleagues in Engineering, Project Management, Accounting / Finance and other departments are going home at 5:00, the marketing team is still there at 9:00 or later each time, working frantically to resolve details about things like sales meetings, tiered-discounts, and Med Ed slide decks. Meetings are tense, Directors are yelling at each other, and senior executives are micro-managing. The stress flows down from the top and as the Marketing Manager told me, “it’s hard to find an executive who can display grace under pressure during this launch.”
Marketers choose this type of career path, of course, along with the risk / return that accompanies it. But some organizations and team leaders are more prone than others to foster disorganization and stress in their product launches. The put the FUN in dysfunction. I’ve heard stories about Chief level commercial officers in large organizations overruling decisions about the type of candy given out at trade show booths. One medical device company I work with elected to launch their product in the U.S. – including deploying a sales team – after getting CE mark approval in the EU but before getting FDA approval (it took another 18 months to get FDA clearance). Stories abound about pricing decisions that have derailed product launches, particularly in oncology and other markets that frequently introduce innovations where valid pricing models are difficult to find.
Pitfalls like these are common, of course, but how does this impact staffing and recruitment?
High-profile product launches are terrific for the recruiting process because the best way to attract great people is to offer clear opportunities for growth and development. As we know, nothing drives organizational growth like innovation and a robust product pipeline. But high-profile product launches can be very bad for long-term retention of talented employees. The build-up to a big launch often creates unreasonable expectations and if results over the first year fail to meet those expectations then the marketing team is often the first to be blamed. Depending on their personal resilience and the availability of opportunities elsewhere, these marketers may elect to jump ship rather than wait for a turn-around. The overall morale of the team drops and many people begin to believe that the grass is greener somewhere else, particularly if continued underperformance of the product is likely to result in a downsizing in the future.
Even successful launches can often breed attrition and turnover. Many marketing professionals join companies in order to get a high-profile launch on their resume. After a year or two post-launch they expect to be able to earn a promotion since they helped launch a successful product. The problem is that the company probably hired a large number of talented individuals in the run-up to the launch and people often feel resentment when they lose out to a peer on a promotional opportunity – so they leave.
The other issue that leads to high turnover rates shortly after a successful launch is good old fashioned burn-out. If the stress, frenetic pace and dysfunction of a big launch doesn’t abate within 6-12 months post-launch the marketing team is most likely going to experience turnover, even if the product is booming. Whether it’s excessive overnight travel, long hours at the office, or toxic team chemistry the talented people I know are only willing to put up with it for a limited amount of time. Most marketers understand and agree to the need for short-term pain in exchange for longer-term gain, but the pain will result in burn-out if it persists for more than a year.
In summary, big product launches are great for marketing professionals – except when they’re not. If you find yourself with a case of the Dysfunctional Product Launch Blues give me a call and we can discuss what to do about it.
Each year I analyze the results of self-reported salary information to get a current understanding of average compensation levels across the Biopharmaceutical and Medical Technology industry. I have the data broken out by four different levels of marketing positions and by company size. The intent is to provide select clients with real-time bench-marking information that can help their organization stay current as they attempt to attract and retain key employees. This is information provided by real marketing personnel working in the Drug and Med Tech industry in 2016, in contrast to syndicated data gathered from surveys of job-band salary ranges, which are not based on individual’s salaries and are typically published 6-12 months after they are reported.
The four levels of marketing positions I’ve analyzed are:
1. Product Managers, Associate Product Managers or other titles assigned to personnel with less than five years of upstream, pipeline planning or downstream marketing experience
2. Sr. Product Managers, Group Product Managers or other titles assigned to personnel with five or more years of marketing experience who are at the highest level of individual contributor and working in a role that is not intended to have direct reports.
3. First-line Marketing Managers, Associate Directors or Directors. These are people who have or will have direct reports assigned to them.
4. Senior Directors, Vice Presidents or other titles of personnel who lead the marketing function of an organization, and are most often managers of managers. These positions do not include Sales, Business Development, Managed Care or other functions that typically report into the C Suite or Sr. VP level.
Employers are defined as “Large” if they generate 1B or more in annual revenue and / or have more than 5000 employees. This base salary analysis does not consider bonuses or equity packages, which are generally more comprehensive in smaller and mid-sized organizations than in larger ones.
Results – Biopharmaceutical Industry
Marketing Level I
Associate Product Managers, Product Managers and other junior-level, individual contributors with fewer than five years of marketing experience: The average base salary for Level I marketers in 2016 was $115,200. Among large employers the average was $119,705, and among small and mid-size employers the average was $105,625.
Marketing Level II
Sr. Product Managers, Product Managers and personnel with five or more years of marketing experience who are senior-level, individual contributors and working in a role that is not intended to have direct reports. The average base salary for Level II marketers in 2016 was $143,163. Among large employers the average was $147,648, and among small and mid-size employers the average was $133,944.
Marketing Level III
First-line managers, including Group Marketing Managers, Associate Directors and Directors – these are marketing managers who have or will have direct reports assigned to them. The average base salary for Level III marketers in 2016 was $176,294. Among large employers the average was $185,304, and among small and mid-size employers the average was $168,892.
Marketing Level IV
Senior Directors, Vice Presidents or other personnel who lead the marketing function of an organization. They are not responsible for Sales, Business Development, Managed Care or other functions reporting into the Chief level. The average base salary for Level IV marketers in 2016 was $224,842. Among large employers the average was $258,833, and among small and mid-size employers the average was $209,153.
Results – Medical Technology Industry (Medical Device and Diagnostics)
Marketing Level I
Associate Product Managers, Product Managers and other junior-level, individual contributors with fewer than five years of marketing experience: The average base salary for Level I marketers in 2016 was $105,593. Among large employers the average was $114,861, and among small and mid-size employers the average was $98,920.
Marketing Level II
Sr. Product Managers, Product Managers and personnel with five or more years of marketing experience who are senior-level, individual contributors and working in a role that is not intended to have direct reports. The average base salary for Level II marketers in 2016 was $138,082. Among large employers the average was $145,794, and among small and mid-size employers the average was $132,405.
Marketing Level III
First-line managers, including Group Marketing Managers, Associate Directors and Directors – these are marketing managers who have or will have direct reports assigned to them. The average base salary for Level III marketers in 2016 was $169,147. Among large employers the average was $174,364, and among small and mid-size employers the average was $163,042.
Marketing Level IV
Senior Directors, Vice Presidents or other personnel who lead the marketing function of an organization. They are not responsible for Sales, Business Development, Managed Care or other functions reporting into the Chief or Sr. VP level. The average base salary for Level IV marketers in 2016 was $214,501. Among large employers the average was $233,555, and among small and mid-size employers the average was $204,412.
As in prior years there was a 30-40K gap in the average base salaries from one level to the next (the gap is wider at higher levels, as would be expected). Across all levels salaries have risen by 2-3% above 2015, which is a slightly lower growth rate than the prior year, and the lower level marketers enjoyed a greater increase than those at higher levels. There continues to be a gap between base salaries paid by large-cap companies versus their smaller counterparts. The percentage gap between large and small organizations is greater at the Director and VP levels than at lower levels (on the other hand, equity packages at those levels are much richer in smaller companies than in larger ones).
Despite ongoing contraction and layoffs, marketers in the Biopharma industry continued to earn a slightly higher base salary than their counterparts in the Med Tech space, with a 5-8% difference across the various levels.
Overall, base salaries continued to trend upward in the BioPharma and Medical Technology industries in 2016, which is consistent with the employment and new job creation rates reported by the U.S. Bureau of Labor Statistics.
The Blogs of Dave Murphy: Preparing for the Next Recession
I admit it – I’m a Prepper. Not the kind with machine guns and years of freeze-dried food stored in the basement; I’m generally more concerned with preparing for financial downturns because they are rather predictable and to be expected. According the National Bureau of Economic Research it’s been 7 years and 5 months since the end of the Great Recession in the United States (the generally accepted definition of a recession is two consecutive quarters of negative GDP growth). That particularly cruel recession lasted 18 months, from December 2007 – June 2009. In the United States there have been 11 cycles of recession / recovery since 1945 and the average length of those recessionary periods has been 11.1 months.
The NEBR defines “recovery periods” as the time from the trough of the last downturn to the peak before the next downturn. Of the 11 cycles in the US since 1945 the average expansion time has been 58.4 months. We are now in month 89 of the current expansion. That history, along with the uncertainty of a very new political reality in Washington, means that we’re due for a downturn in the next few years. And then things will bounce back and we’ll continue the cycle. So it makes sense to pro-actively manage your career to account for these cyclical events, right?
I’ve been doing some research online and in my own database on the job market during the Great Recession of 2008 – 2009, and to a lesser extent the recession of 2001-2002. We all know that employment trends lag GDP growth, and because of the depth of the last recession the unemployment rate in the US remained unusually high far longer than June 2009: unemployment peaked at 10% in October of 2009, after GDP had begun growing again, and it remained above 7% until November of 2013. We can’t accurately predict the timing of the next recession or the persistency of unemployment following it, but we can safely say that job creation is limited for a far longer period than the actual recession itself. I’ve seen talented executives search for mid-level and senior-level positions for years and only recently been able to find opportunities that make sense for them.
So what career management decisions can we consider to plan for this eventuality? A wise person once said that the best time to fix your leaky roof is when the sun is shining. Thinking back over the stories of how some people successfully navigated the last recession / recovery cycle I found some trends. For the most part these are Marketing and Business Development professionals in the medical technology and biopharmaceutical industry, and they were able to maintain a fairly steady income throughout the cycle. Back in the day conventional wisdom held that if you were able to secure a job at a large, global company in the Fortune 50 you could expect to ride out a recession without getting laid off. But I have friends at places like Merck, Medtronic and Becton Dickinson who were victims of reductions-in-force. So the conventional strategy of seeking security in numbers is now risky, and most would agree that we need better ideas to proactively manage our careers through tough times.
I’ve identified four techniques that may make sense to consider:
Seek privately-held organizations
The privately-held organizations I work with tell me that they are better positioned to make investments and limit short-term cost containment measures that their publicly traded counterparts. Without quarterly pressure from stockholders to post positive financial results management can remain focused on making decisions in the best long-term interests of the organization. There is a 50 year old privately held medical device company that I help to hire marketing personnel, and they have had no force reduction or layoffs over the past eight years. In contrast, their three publicly traded direct competitors – large, global corporations with huge market caps – have each had multiple rounds of layoffs during that time span. Although sometimes viewed as being risk averse and lacking in innovation, these long-standing privately held companies, whether family owned or otherwise, often provide safe harbors during economic downturns.
Develop a sub-specialty
I’ve noticed that over the past eight years the marketing professionals I know who have been able to thrive have developed specialized skills that are differentiating and hard to find. Examples include digital and online marketing capabilities, health economics and payer-focused programming, and in-licensing skills that help an organization grow with less capital and labor investment. There are many examples and they all follow relatively new trends that require special skills not developed by the masses – and they frequently relate to cost containment. These are advanced capabilities that make an employee different and valuable to an organization, as opposed to a more generalized skill set focused on strategic planning, for example. It’s also generally true that a marketing job which is farther downstream and closer to the customer is less likely to be impacted or eliminated in a workforce reduction than a role that is upstream and internally focused.
Work with first-in-class technology
My analysis showed that a disproportionate number of workforce reductions in last eight years were at organizations that manufacture relatively mature technology in markets that are becoming commoditized. Examples include pacemakers, small molecule drugs used in the primary care setting, and ELISA kits in the clinical diagnostics segment. At one time variations of these products were highly innovative and on the cutting edge of the life sciences, but no longer. When cost pressures impact payers and large buying groups they often look for deep discounts from suppliers of these undifferentiated products, and that leads to job instability for the suppliers (unless you’re in market access or reimbursement – see last section). While it’s true that first-in-class technology is often born in risky start-ups, those career opportunities are often less risky in an economic downturn than large, old-school organizations (provided they have adequate financing, of course).
Build an external professional network
Some of the most talented marketing execs I know were laid-off in the Great Recession – many of them more than once. Yet a significant number of them have been able to build highly successful consulting careers based on the relationships they fostered while toiling away for their employers. They kept in touch with former managers and peers, and even networked with agency personnel and vendors from management consultancies and the investment community. They’ve been willing to build 1099 contract-based consulting careers with multiple clients, and in many situations have found their next full-time permanent position after first completing a successful contract assignment for the would-be employer. In a recession employers often prefer to “try before they buy” a permanent FTE, and they first look to their personal networks to identify a contractor to fill a short-term need. Linked-In has been incredibly valuable in this regard, but there is no substitute for old fashioned one-on-one emailing and phone calls.
These are four career management techniques that have been used successfully in recessionary periods, and there are many others. One need not wait for an economic downturn to take these steps, however. Give the length of our current economic expansion it may be wise to take pro-active measures such as these to fend off career misfortune. As always, I welcome your comments and questions at firstname.lastname@example.org
The Blogs of Dave Murphy: Job-hopping – a generational thing?
I work with hiring managers to identify candidates for openings that fit their “ideal” profile. On the wish list of criteria is always a “track record of success,” often defined by a clear progression of increasingly more responsible roles. Most hiring managers want to see some of that progression within the same organization because they usually want to build a bench of future leaders for their own company, and would prefer to do that with people they can trust will want to stay with them for a period of several years. Hence, hiring managers have historically looked askew at “job-hoppers.” One large pharma company I have worked with even has a policy against considering candidates if they have more than two different employers in the past five years.
That conventional thinking is being challenged in many circles, and labor market analysts like to contend that workers in younger generations, particularly Millennials, are far less “loyal” to their employer and much more likely than older works to change employers frequently. One LinkedIn study says Millennials job-hop more than their predecessors, however this only contains data LinkedIn members actually report. Gen X and Baby Boomer members of the site may be less likely to report their extended history of employment, but instead the few most recent jobs. It’s interesting to note, however, that the Bureau of Labor Statistics reports that Baby Boomers job-hopped in their twenties just as frequently as Millennials do now. So it appears that frequent employment changes is not so much a generational phenomenon as it is a function of being young.
From a Recruiters perspective, job-hopping is more prevalent in certain functions than certain generations, for instance, I see far more employer changes among marketing personnel than I do among engineers or R&D personnel. On balance, a 50 year old marketing professional is more likely to have multiple, recent job changes on their resume than a 30 years old product development professional. A recent LinkedIn study inquiring about reasons for making a job change showed that 59% of respondents chose their new company because they saw a stronger path for career development at the new company than at their current company, regardless of their age. It’s not surprising that workers from all generations are seeking opportunity for growth and development, and it’s also not surprising that workers in their 20’s and early 30’s don’t necessarily believe that they were fortunate enough to stumble into a career path that will ultimately lead them to retirement.
Is there a continued stigma associated with job-hopping?
With corporate contractions, mergers and acquisitions affecting nearly all industries, and the resulting force reductions and lay-offs, it’s safe to say that frequent job changes on a resume are not unusual, and generally not perceived as negatively as they once were. Hiring managers are less likely to simply cast off a candidate without at least inquiring about the reasons for the job changes. But there remains a level of suspicion about candidates who have had many job changes because they are assumed to be a flight-risk. It’s extremely expensive and time consuming to hire and train new employees and if an interview team has to choose between someone who has demonstrated longevity in a given employer versus a job-hopper, they will demand that the job-hopper have significantly better skills for the job.
I think it’s fair to say that today’s hiring managers, who themselves have likely made several employer changes and / or lived through some downsizings, are far more open to considering candidates with a track record of multiple job changes. But they also have a high level of respect for employees who were able to earn multiple promotions within one organization over several years. It’s not necessarily a negative thing to have job hops, but it’s a very positive thing to show a track record of progression within one organization. And it’s so rare to see that in a Millennial candidate – for example, 5+ years at the same employer right out of college that included multiple promotions – that they are always viewed with favor in an interview process versus other younger candidates who don’t have that story to tell.
When I review resumes in my database of successful employees of mid-size and large companies who have risen to the VP level and above I see a similar pattern. Their first job out of college is usually with a high-profile, multinational organization that gave them training and access to resources that are not available at smaller companies. They generally stay there 5-10 years and earn at least two promotions, building a track record of accomplishments that make them very attractive to other organizations. In some instances those high risers will choose to remain with their initial employer for decades, rising through the ranks, but far more often I see them being recruited to smaller organizations where they can often accelerate their career advancement and have more fun doing it. It’s no secret that smaller companies are riskier and when they don’t get funding or their lead product fails, those A Players need to find another job. So in reality I see just as much job-changing (voluntary or not) among Baby Boomers and Gen X workers as I do among Millennials.
I don’t think job-hopping is a generational thing, I think it’s far more based on individual personalities and the functions that workers perform, regardless of their generation. As always I welcome your comments and questions.
The Blogs of Dave Murphy: Upward Mobility – What Happened?
I’ve written before about the generational differences in the United States regarding upward mobility and relocation for career advancement. In the past Baby Boomers and their parents were routinely willing to uproot their families in order to advance their socioeconomic status. That is less likely to be the case with subsequent generations who are more interested in “work-life balance” and “working to live rather than living to work.” Of course, this in inherently tied to rising standards of living in the U.S. over the years and workers having enough resources to meet their needs. It’s fair to assume that the Oakies of the 1930’s Dust Bowl didn’t talk much about work-life balance.
This trend has given the shrinking pool of job candidates who are “upwardly mobile” a distinct advantage in the labor market versus those workers who can’t or won’t move. While it’s true there will always be a “home field” advantage for local candidates to fill local jobs, the relatively low number of out-of-town candidates for any given job means that relocating workers are now in a stronger competitive position than they were 20+ years ago.
So that’s good news for mobile employees – but what about employers, and the larger economic impact of this trend? This recent story in the New York Times depicts a potential problem emerging in the U.S. work force related to employees staying put in their current jobs. As author Patricia Cohen writes, “In recent years economists have become increasingly worried that a slide in job turnover and relocation rates is undermining the economy’s dynamism, dampening productivity and wages while making it more difficult for sidelined workers to find their way back into the labor force.”
Generalized fear of change also affects the issue. The University of Michigan’s Betsy Stevenson, a former member of the President’s Council of Economic Advisor’s, noted that “there is a possibility that people stay in jobs that aren’t as good for them because they’re terrified of changing, and that’s bad for the overall economy.” This means that skill jobs are being performed by less qualified, less productive workers, and the lack of job changes and relocations suppresses promotions and pay raises, further dampening the economy.
The problem is particularly acute in metropolitan areas in the U.S. where high-growth industries, including Biotech Med Tech and High Tech, have become concentrated, regions like the Northeast, Mid-Atlantic, and West Coast. The need for skilled workers in those areas has driven up wages and cost of living rates, making it more difficult for out-of-towners to be willing to move there since the wage inflation doesn’t keep up with the increase in housing costs. That limits the injection of “new blood” and new thinking in those areas and creates a perpetual game of musical chairs among existing workers who already reside in any given expensive city.
Into that void has stepped a highly mobile, highly educated class of immigrants from places like Europe, China and India. Having already moved half-way around the world to seek great career opportunities, they are far more likely to consider further relocation within the U.S. as compared to their native counterparts. If economists and elected officials are concerned about this void in the labor market they would support policies that enhance more immigration of skilled workers rather than less of it.
This trend has created lasting impacts on the cultures of U.S. companies – they are changing in ways we’ve never seen before. We all know that change is constant and inevitable, and those individuals and organizations who embrace it and lead the way will be far better positioned for success in the new economy.
The Blogs of Dave Murphy: Cost of Living Adjustments?
I fill a lot of jobs in places like the San Francisco Bay Area, Southern California, Boston and New York. As compared to other locations in the U.S. it is rather expensive to live in those cities. People who are considering moving to expensive locations in order to take a new job will often ask if the employer will adjust their salary upward to account for the higher cost of living. The answer? It depends, but generally no.
There are a few select organizations – typically large, well-capitalized multinationals – that will include a modest Cost of Living Adjustment in the job offer, and most often it appears as a one-time lump sum built into the relocation package. But in the vast majority of cases the employer doesn’t provide a COLA, and it’s often surprising for many to learn that the wages for Med Tech marketing jobs in expensive cities are only marginally higher than those in less expensive places.
The best evidence of this is the case of relatively large corporations that have offices and employees doing nearly identical jobs in different cities (think places like J&J, Medtronic, Abbott, Roche, Novartis). To be sure, there are some differences in salaries paid to employees working in different locations, but generally speaking a Marketing Manager at a given organization who is based in San Francisco is earning no more than 5-10% more doing the same job as his/her counterpart in, say, Minneapolis. That “COLA” comes nowhere close to off-setting the difference in cost of housing in most cases.
This explains why employers located in pricey cities try their hardest to fill job openings with candidates who are already living in the local area and who don’t have to relocate. Employers are fully aware of the difficulty in convincing someone to relocate and take a financial hit in the process – even though they are almost always getting some sort of increase in their pay. As in taxes, it’s not what you earn that is important – it’s what you keep.
All employers in expensive locations have been burned multiple times by courting candidates who need to relocate only to find out at offer time that they will not move. Or they will move only if they are made “an offer they can’t refuse.” Often the candidate will not do the math and actually research the rent or home prices in the new area until the end of the process, wasting everyone’s time and burning bridges along the way. We also frequently see the situation where the candidate doesn’t engage the spouse or partner in the arithmetic of the move until after an offer has been extended, which is a recipe for disaster. Finally there’s the worst case scenario where a candidate accepts a job, begins employment and then decides after six months or so that they’re not going through with the relocation. Now the employer is faced with an “effective” vacancy of a year or more because they have to re-start the search from scratch.
For these and other reasons hiring managers always prefer a local candidate who is already used to paying the cost of admission in the expensive but very lucrative job market. They can fill a job faster, cheaper, and easier, and the “flight risk” factor is reduced.
Why does this matter?
Why would a sane person consider relocating to take a new job in a significantly more expensive area, assuming there are no personal or family reasons driving the decision?
As it turns out, there are several reasons.
The most common is the opportunity for growth and development within an employee’s own company. By moving to the headquarters location from a regional office, a sales position, or a manufacturing plant, an employee can generally improve their career development options significantly. The other frequently cited justification for an expensive relo is based on the fact that the employee’s industry is likely concentrated in that new area, so that if there is a layoff or something goes wrong with the new job or employer, there are many other viable options nearby and the employee will not have to keep relocating to build their career.
There are valid reasons why those cities are so expensive – the best jobs are often based there, in a concentrated geographic area, limiting career risk for people in those industries. And the situation is self-perpetuating: an employee with a great idea leaves his or her company to go across the street and build a start-up in the same industry. They’re unlikely to build that new company in a remote, inexpensive place because the most important resource – human capital – is right there nearby.
So some bold, adventurous souls are willing to pay the cost and move to Cambridge, Manhattan or Palo Alto so they can be either in – or at least near – “the game.” They want to be in places where career opportunities abound and make the risk-return tradeoff that we often have to make in managing our careers, and in living our lives for that matter. Maybe someday geographic COLA’s will be a staple of the American workforce, but until then we’ll have to do the analyses and the make the tradeoffs about relocation, knowing that the immediate take home pay may not go as far as we hope.
The Blogs of Dave Murphy: Blind dating in the workforce
I know it’s weird, but the analogy is accurate. Debriefing with candidates after their job interview is similar to asking them about their first date with someone they just met. “How did the call (meeting) go?” “What did you talk about?” “Did he/she say they will call you again?” The candidates nearly always begin by saying “I think it went pretty well.” But then, upon further probing, they open up and begin to describe all kinds of things about their encounter with the interviewer. I believe the word “candid”ate derives from this phenomenon – some people are very candid and honest with me about their experience. And to carry the analogy further, sometimes I get the intimate details about how well the interviewer prepared, their amount of listening and eye contact, and how long it lasted. From all this debriefing with candidates over the years it’s pretty clear that some interviewers need Cialis for Daily Use.
In 2015 great employees are rare and hard to attract. They need attention, a feeling of connection, and maybe even some romance. In 2009, slam-bam-thank-you-ma’am was the rule of the day for interviews. For every job opening there were 10-20 qualified, interested candidates, many of whom were laid-off and in active job searches, and employers could “select” from a list of A Players. Anyone paying attention has recognized that the job market has turned 180 degrees and if employers really want to attract a targeted, rock star candidate they need to compete for them. Once a candidates determines that they are open to making a job change, frequently because I called them and broached the idea, they don’t just purse one opening – they pursue many. They think “If I go through the effort of updating my resume and preparing for interviews I might as well consider a range of opportunities.”
All of this is great news for employees – we’re in a fantastic job market. However, it creates some challenges for hiring managers and those responsible for “recruiting” talented employees. Many studies have been conducted over the years asking job-seekers about their motivation to change employers. Sometimes it’s based on relocation, more money, travel or lack of opportunity for growth and advancement. Very often, however, it’s based on management style, corporate culture, and “personal chemistry.” This last variable presents an opportunity for a new employer, who is ostensibly “recruiting” to fill an opening, to win in the so-called War for Talent. Like anyone on a blind date, a candidate wants to feel respected and engaged in the interview. They appreciate recognition for their prior accomplishments, and while they understand that they need to make a positive impression on the interviewer, they expect the same in return.
I used to think it was only interviewers at Fortune 50 companies who refuse to prepare adequately for telephone or live interviews – showing up late, reading the resume for the first time as they walk in the room or get on the phone, interrogating candidates rather than asking insightful, probing questions, and wrapping it up after 20 minutes. Now, however, I see it at all types of organizations including those candidates have never heard of before, which is even more unfortunate. It’s very hard for a B company to get an A player, and it takes a fair amount of effort.
Other downers for candidates on the blind date: when the interview calls them for the first time on their cell phone while driving. Yes, sometimes that has to happen unexpectedly but good form would be to reschedule and provide complete attention. Candidates also complain when they don’t have the chance to ask any questions of their own during the conversation, particularly in later stage interviews as they’re trying to gather information to determine if the opportunity is good enough to make a job change.
On the other hand, I’m happy to report that many of these blind dates are very positive experiences for those A Player candidates. They call me right after the call or meeting to debrief and report that the interviewer was well prepared, engaged, and provided a lot of information about the company, the function, and their management style. If candidates express interest in moving forward, I always ask them why, and by far the most common response is because they really like the interviewer and felt a good connection. So the good news is that you don’t have to be a “Rocket Surgeon” to figure out how to attract good people, and you don’t need that Cialis after all.
The Blogs of Dave Murphy: Consolidation & Contraction
Usually these blogs provide commentary on the different elements of the recruiting and staffing process, but this one focuses on changes in the Med Tech and BioPharma business. I first got into the industry in 1985 with a small, family owned drug company called Carter-Wallace. Back then there were over 100 different commercial stage, branded pharma companies including at least 25 that we would refer to as Big Pharma (I later went to work for Merck which at the time was the biggest of the Big Pharmas). Little did we know at the time what “Big” really means.
Now, the top 10 drug companies account for over one-third of industry sales. Those super-companies represent the sum total over 50 other organizations that were merged / acquired / aligned into each other. Consider the case of a friend of mine who began his career at Marion Labs. They became part of Hoechst Marion Roussel, which was merged into Rhone Poulenc Rorer to become Aventis, which became Sanofi-Aventis, and recently acquired Genzyme. The rate of contraction in the industry is accelerating at a rate we’ve never seen before, and a similar trend can be seen in the Medical Device space as well. Organizations seek to optimize efficiency and economies of scale – particularly those that have invested in building huge commercial teams and are constantly in need of new products to sell. In our industry it’s often much easier to buy intellectual property than develop it organically, and that trend is not likely to change.
So what does this mean for employment and career development opportunities? For those among us in Corporate or Business Development activities, it’s a huge opportunity to push for M&A and licensing deals, and to create a secure employment path. And for risk-taking founders and early employees of start-up companies with unique IP this is a trend that will continue to provide significant wealth-building opportunities. For most marketing personnel (about 80% of the jobs I fill) there is real risk in the trend toward consolidation. While it’s true that HQ-based marketing teams that are acquired are needed in the short-term to maintain revenue growth and help build a bridge to the future, combined organization, more often than not we see duplicity in certain functions that usually results in jobs being eliminated. A combined company only needs so many mid-level managers and executives in functions like brand marketing, market research, sales operations, communications and other related areas.
Another source of post-acquisition layoffs in marketing functions is logistical: most organizations want to consolidate employees in the same location to reduce overhead and improve communication. That means relocation of employees, and the reality is that few Gen Xers and Millennials are willing to relocate for their employment. When M&A deals are struck the terms include analysis of the costs of severance packages that will be offered to employees who won’t relocate. While it’s true that the acquiring company generally has a few vacancies to backfill due to non-relocation of marketing staff, it’s rarely one-for-one. In the majority of cases we see that the post-acquisition “whole” is lesser than the sum of it’s parts as it relates to the workforce.
So how best to prepare for the new reality of permanent mergers and acquisitions? There are several strategies one can consider, and they each have advantages and disadvantages, of course. Some marketers choose to develop new skills in BD and deal-making in order to capitalize on the trend. My thought there is that it’s always best to make that shift early in your career when you can still afford it, and to do it with your current employer since a new employer will require established BD experience and an existing Deal Sheet to consider someone as a viable candidate.
Others anticipate the need to expect frequent job changes throughout their career, and they will sometimes move to a region or city where the industry is heavily concentrated in order to limit further relocation (PA, NJ/NY/CT, Boston/Cambridge, California, and – in Med Tech – the Twin Cities. And an extremely common strategy we see among Marketing VP’s and senior execs is to build a solo career in contract based consulting, forgoing so-called “job security” and benefits for lucrative contract work that is project based. That obviously requires a level or risk tolerance that’s not for everyone, but it has become a very viable long-term career option.
It’s not just the Med Tech and BioPharma industries that are evolving in this way, of course. Employees in all sectors of the global economy have been pinched by consolidation and contraction, and it will continue to accelerate. In the end each of us has to manager our careers proactively, anticipating and embracing change, so that we can minimize the occasions where we have to react to adverse situations. Sometimes that means a job change ahead of looming trouble, sometimes not. The days of getting a gold watch after 30 years with a company may be gone, but there will always be a need for innovative, ambitious marketers in our industry in one form or another. I look forward to adapting as our industry changes, and continuing to serve as a resource for my client companies and marketing professionals.
The Blogs of Dave Murphy: Fantasy Football for Recruiters
This time of year many of us are busy crafting our strategy for upcoming Fantasy Football drafts, combing through magazines or reading websites. Particularly in those early draft rounds we only get a few chances to get it right, and those choices make or break our entire season. It occurred to me that as I help my client companies recruit candidates to fill key positions, we often go through the same process: understanding the position (a Job Description), developing a targeted search plan, interviewing, vetting, and selecting. All hiring managers want to get Tom Brady, Calvin Johnson, or (pick-your-favorite-player) on the team. The key difference, of course, is that candidates for employment often choose not to go, or they don’t return a call because there is no reason to make a job change, or they have three job offers to choose from at the same time. So to operate under the assumption that as a hiring manager with an “opening” we should be able to expect the most talented person in the workforce to join our team is, indeed, a fantasy.
The trap I see many managers fall into is that initial candidates who are early in an interview process are “put on the backburner” while we search, and wait, for better people. And we search, and we interview, and we wait, and at some point along the way we have a choice to make: is it better to have a vacancy on the field (for example, no Tight End) and go with fewer players than your competitor? Or does it make more sense to get someone in there who is competent and willing to play for your team? I suspect the answer is that it depends on the position and what time it is in the game. If it’s an important job, and it’s crunch time – maybe a product launch, or an IPO or merger, or a new technology platform being implemented – it may make sense to hire someone who is over-the-bar in terms of qualifications and cultural fit, yet perhaps not the envisioned perfect-candidate profile.
Just as no football coach, fantasy or otherwise, would enter a game under-staffed, no hiring manager should carry a vacancy for a prolonged period. Winning companies have a clear process for recruiting and selection, identifying a short-list of candidates who are hirable and interested, and setting a general deadline for making a decision. One of the hardest skills for new managers to develop is attracting and then vetting new members for their team (particularly when they were recently promoted and are now backfilling their old position). But an even more important skill to develop is overcoming the fear of making a mistake or bringing on someone who is high-maintenance and a management challenge.
From my seat it is interesting to observe the differences in hiring behavior between brand new managers of people and those with several years of experience supervising others. Many new managers are very hesitant to make a decision and fill an opening. Almost as if it were a marriage proposal, the fear of making a mistake will sometimes drive them to consider dozens of qualified candidates over several months, and many are willing to do 2-3 jobs at once while waiting for Joe Montana to show up and interview. The strain on the rest of the team members, who typically have to help cover the vacancy, begins to wear on them, often leading to further turnover. If left to fester, vacancies – whether backfills or newly created jobs – become a cancer that can drag an organization down. In this white-hot job market for executives in the medical industry all candidates want to know why a job is open, and how long it’s been vacant. Prolonged vacancies, particularly those that have been advertised for more than six weeks or so, create fear and uncertainty. I hear things like “why can’t they fill it?” or “why won’t people go work there?”
As with everything this is a balancing act – nobody is suggesting that we hire the first or second warm body who interviews, knowing that they are unlikely to meet expectations. But just as great coaches in sports can identify budding talent and help make them great when put into the proper system (Bill Belichick comes to mind), leaders in the workforce must be willing to make hiring decisions when they are asked to manage a team. Beyond staffing, successful management is about training, inspiring, motivating, and – when necessary – coaching and counseling underperformers, including those you may inherit. Yes, sometimes that even means replacing people, a difficult task that good managers must embrace.
It it’s any consolation, one of the most common qualities that my client’s seek when filling a supervisory role is the experience of dealing with a “management challenge.” They want to know about situations where you’ve been able to turn around underperformers and get them moving in the right direction, and they want to know about situations where you’ve had to move someone out of the organization. Candidates who don’t have those experiences are viewed as being untested and less attractive, particularly given the trend toward permanent reorganizations where managers are assigned new subordinates rather than being allowed to select their own people.
One of the great tenets of leadership, among coaches or managers of any group, is “when in command, take charge.” In other words, make a decision and own it. Monitor it, and if you determine later on that it needs to be corrected, then admit the mistake and fix it. All noteworthy books on leadership cite indecision as having a crippling effect on organizations. When it comes to competing in the marketplace, we must stop carrying prolonged, expensive vacancies and losing good employees to other teams. We can go on and on with sports analogies here (“you miss every shot you don’t take”), but it’s fair to say that having somebody in a crucial job – even if it’s on a short-term, contract-to-perm basis, is better than having nobody. If we’re doing our jobs as managers that means keeping all parts of the machine operating smoothly.