Q2 bms medical sales index

Quarterly MedicalSales Index

About IndexThe report is compiled from a variety of sources including vacancy data, candidate salaries, client survey information and specific sector reports. As a business we interview over 500 sales candidates per week, speak to 2000 decision makers and have a national presence with 7 offices throughout the UK. This gives us access to a wealth of regional and national data, information on candidate salaries and job expectations and insight into the challenges facing decision makers. The index is produced quarterly and provides organisations with a good barometer of trends in the UK sales recruitment market.

About Us

We specialise in recruiting high calibre people across the UK, Ireland and Australia. Our network of offices gives us strong local presence and allows us to support a long list of blue-chip clients who view us as partners they can trust.

We have grown to become a leading force in our field placing more people than ever before. But we haven’t let our standards slip. We take the time to get to know you, your business and the type of people you need. We tailor our services to ensure the right recruitment solution for your business. In short, we make things run smoothly and produce results.

2| BMS Quarterly Medical Sales Index - Published July 2013

BMS Quarterly Medical Sales Index

With output up across the UK, and the British Chamber of Commerce suggesting business confidence is at its highest point since 2007, at long last businesses have some small reason to be cheerful.

Aside from the fact that we have seen economic false dawns before, an upturn in business confidence and the tentative shoots of recovery actually pose serious questions for personnel departments, and the sales teams they support.

According to the BMS Quarterly Sales Index, employee retention is becoming a very real issue.

It was uncertainty and a lack of confidence, rather than the effectiveness of retention strategies, that kept staff turnover low during the downturn. With candidate confidence now returning to the job market, many sales leaders fear the loss of their star performers - forcing them to work harder to keep their teams together.

“Seventy percent of companies believe they are going to have to work harder to retain their best people in the coming months.”

Chart One: Will you have to work harder to retain staff if the economy improves?

Firms are responding. Across the board, they’re continuing to invest in a range of retention strategies. Today’s developing communications technologies are enabling new forms of flexible working, which according to Chart Two, has led to a third of firms now offering these opportunities to their teams – a growth of nearly 70% on last quarter’s figures.


Retention concerns as economy gears for growth

Yes, 70%

No, 30%

“It was uncertainty and a lack of confidence, rather than

the effectiveness of retention strategies that kept staff turnover

low during the downturn.”

Similarly, and perhaps more significantly, firms are willing to increase base salaries to counter offers for their best people – a jump of over 40% on last quarter’s findings. The BMS Index has consistently raised the issue of salary as a reason for losing (and failing to secure) good salespeople. The fact that the industry has taken action shows a positive development across the vast majority of sectors.

“We’ve seen a rise this quarter in the number of companies

offering higher salaries, improved benefits and flexible

working. A real sign that companies are starting to act.”

Chart Two: What are you doing to retain your best people?

The medical sector is particularly bullish, with over a third of organisations responding to the survey confirming they’ll increase salary to hold on to the best people – compared with an industry average of 23%.

Such increased efforts to keep their teams together is hardly surprising given that eight out of ten respondents felt their salespeople were instrumental in protecting their businesses during the recession. It’s safe to assume that this will only increase should the economy continue its upward path.



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“Sales training and more lucrative bonus schemes

remain the top ways companies are looking to attract and retain sales

talent.”

As Chart Two revealed, while salary and a range of other bonuses are being offered to keep their best people, firms continue to focus their retention efforts on training.

This is a trend the BMS Index has been following for some time and offers benefit to both employer and employee. Apart from the likelihood of improved performance (which will ultimately hit the firm’s top line), expanding training programmes is a clear sign of a company who is willing to invest in its people.

Chart Three: Will sales training be a big factor in motivating and retaining sales teams?

It would certainly appear to work, with the vast majority of survey respondents agreeing that sales training is a major factor in motivating and retaining staff, as shown in Chart Three.

According to BMS’ Head of Training and Development, Dave Bill, investment in employee training goes right to the heart of retention efforts:

“We’ve seen a big move towards training as a retention strategy over the past few quarters. While salary may attract candidates, investing in your existing people increases motivation, performance and a greater sense of value in the employee. Indeed, as we move forward, presentation and lead generation training will not only add to team competencies, but will sit alongside growing salaries, flexible working and increased bonus pots as a sound retention tool.”

Therefore, we will inevitably see the importance of training increase over the next six months as over a third of firms take on raw talent in their attempts to remain competitive. Offering training and development, and immersing graduates and new starters in the company culture from the very beginning, should not only accelerate ‘time to value’, but support retention strategies too.

Training and Loyalty

“Sales training leads the way in retention tactics being used by companies with 86% believing it will help them to motivate and

retain their staff.”


Yes, 86%

No, 14%



Chart Four: Jobs growth January 2011 - July 2013

Of course, enhancing team performance isn’t simply about retaining the best people, it’s also critical to find and recruit new talent. And over the second quarter of 2013, the BMS Quarterly Sales Index has brought to light that jobs growth recovered from a slump in March to end the quarter in positive territory (Chart Four).

Q2 recruitment analysis

Business services, IT and manufacturing have all fared well - in what remains a tough climate. However, sales recruitment within construction and medical remained well below the all-sector average.

Set against the quarter’s positive Purchasing Managers Index (PMI) figures and growing business confidence, the sales recruitment figures appear to be lacklustre. In reality, firms rarely increase sales teams or add additional account management on the back of a single good quarter.

It’s a more strategic game; we’d expect a time lag between output/order growth and an upturn in recruitment.

On the question of the challenge of recruitment over the past six months, firms were more evenly divided; just over half of firms surveyed felt they had struggled to recruit good people (Chart Five).

A struggling six months?

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“Whilst vacancy levels are low, this new sense of optimism will

see recruitment activity rise in the coming months.”

Chart Five: Have you struggled to recruit good sales people over the past six months?

Recruiters in the business services, FMCG and medical sectors were more likely to agree that they had ‘struggled’. The biggest barrier to securing the right people within the medical sector was strong counter offers from existing employers – small wonder as medical leads the sectors in using salary rises to encourage retention.

Despite this, there’s no getting away from the fact that salary and counter offers remain significant recruitment issues across all sectors, as Chart Six demonstrates. There is still work to be done here.


Chart Six: If you have missed out on a good candidate in the past, what was the main reason?

Yes, 56%

No, 44%

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Two stage battle for talent back on This quarter’s Index highlights a period of short term entrenchment for employers. There’s no doubt that as confidence returns to the economy and the job market, good sales people who have sat tight will be looking for what other opportunities may exist.

In an attempt to offset this potential skills drain, employers are ramping up strategies to engender greater loyalty (principally through investment in their people). But where attempts fail, as highlighted in Chart Six, employers are now prepared to aggressively move to counter offers.

For companies that are recruiting, this means increased competition. As Chart Seven indicates, they’re taking action to make themselves more competitive by looking outside their markets for good people. They are doing this by taking on raw talent and offering training and development, which are trends we have seen over the past two years.

“As confidence returns to the economy, those that sat tight during the recession will consider their options,

leading to increased competition for candidates.”

But where this quarter’s Index offers a particularly interesting insight is in the significant increase in the number of recruiters (one in four) now willing to increase salaries, and almost a third aiming to shorten recruitment processes.

We haven’t seen these high levels for some time. This reflects a growing realisation that to get the best people you have to pay the money and be fleet of foot; both to beat competing recruiters and to outmanoeuvre the current employer who may be looking to counter offer.



Chart Seven: What steps will you be taking to remain competitive in the search for good sales people over the next 6 months?

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Look for talentoutside market

Improve salary& benefits

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provide salestraining

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Strengthenrecruitmentpartnerships

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None of theabove

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“The rise in counter offers and a willingness to increase

salaries compared to last quarter are clear signs that

competition is increasing and confidence is improving.”

Chart Eight: Will your recruitment activity for the second half of 2013 increase or decrease compared to the first half of 2013?

Increase in activity forecast for the rest of 2013


As shown in Chart Eight, recruiters expect to be doing more business across all sectors (except construction) as we move into the second half of the year. While the vast majority of firms believe their activities will stay the same, around a quarter of IT and business services firms, and over a third of manufacturers, expect their numbers to rise.

It would seem that once businesses have their retention strategies in place (and have dealt with the inevitable churn that a growing economy delivers), they will look to go out to market to build up their sales forces.

Of course this is largely dependent on the continued growth of the economy. While there have been many false dawns before, there is certainly a place for cautious optimism – and there’s little doubt that both business and candidate confidence is higher than it has been in some time.

But as we’ve discussed, increasing confidence can also be a major concern for the unprepared employer.

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More flexibility needed to secure top talentAccording to one respondent to this quarter’s BMS Quarterly Sales Index, “market and product knowledge are absolutely fundamental to success in this industry.”

This is undoubtedly true; the sales environment within the medical sector is unlike any other, and demands a very specific range of skills. Or does it?

According to the latest BMS survey of sales and recruitment leaders in the medical sector, the top three characteristics of an effective sales person are communication, listening skills and positivity, as demonstrated in Chart Nine.

“Our survey found that medical firms favour sales people with

great communication and listening skills and a positive

attitude over technical product and market knowledge.”

Chart Nine: What characteristics do you believe are needed to be an effective sales person?



That is not to say that product and industry knowledge don’t figure – they do, fourth and fifth places respectively – but this could offer an interesting perspective on why medical firms find it so hard to recruit.

Only 25% of firms responding to the BMS survey were prepared to look outside their markets last quarter; despite the increasing availability of both experienced and graduate talent appearing on the market as the wider economy improves, as shown in Chart Ten.

Considering the top three criteria are non-market based, that seems to be a small number. Wouldn’t it make sense for the industry to widen its sales recruitment net?

“In contrast, only a small proportion of medical

firms are looking outside their markets to find good sales people, the majority favouring sales training as an attraction method

instead.”

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Leadership skills Market knowledge Product knowledge Communication skills Good listening skills Positive behaviour Entrepreneurial spirit

Chart Ten: What steps will you be taking to remain competitive in the search for good people over the next 6 months?


Picking from a restricted labour marketThe challenge of fishing from a small pool is increased as the wider economy begins to find its feet. The manufacturing, construction and business services sectors have all seen impressive growth, according to PMI figures released at the end of June. These areas, specialist in their own way, are very happy to look outside their markets for the best people, and are similarly pleased to take experienced sales people from the medical sector.

This would be less of an issue if medical was a growth industry. However, all the economic indicators, and successive spending reviews, suggest otherwise. It’s therefore a distinct possibility that the very best sales people will start to follow the money into other, more financially attractive sectors.

Salaries rise to keep salespeople loyalWhile a small proportion are looking outside to remain competitive in the recruitment market, the vast majority (57%) are looking to increase training and development in an effort to secure top talent.

But, as a reflection of a constricted candidate pool, and the need to maximise existing investments in training, the focus for medical firms over the past three months has been on retaining skilled staff.

Forty two percent of inhouse sales and HR leaders fear an exodus of top talent (to competitors and out of the sector altogether) as the economy improves, and are adopting strategies to combat this growing threat.

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Look for talent outsideour market place

Improve salary andbenefits package

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process

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Take on raw talentand provide sales

training

Engage otherattraction methods

Strengthenrecruitmentpartnerships

Improve employerbranding



Chart Eleven: What are you doing to retain your best people?

It’s clear then that the battle for talent is still on, but this time medical firms are facing competition not just from their own industry, but from ambitious firms across the spectrum.

As indicated, medical firms are responding by raising salaries, bonus levels and benefit packages. The trouble is that these are expensive strategies, and with the sector in poor health, they are unlikely to be sustainable.

One way forward, currently being taken by a quarter of respondents to this survey, is to recognise the transferable nature of the key sales skills. They are partnering with recruitment firms to bring new blood into the industry as well as extending training and development programmes to upskill this new resource.

While there’s no one size fits all approach, the option of selecting from a wider talent pool may offer some cost saving benefits today, and with the right training in place, deliver additional strategic advantage in the longer term.

Recognising that market and product knowledge may not be the be all and end all to creating an effective medical sales person may help the industry address the recruitment challenges it has faced for some considerable time.

The most popular approaches focus on ‘softer’ strategies: improved benefits, team building and sales training. This is consistent with efforts of firms across the vast majority of sectors.

Where medical differs is in its apparent enthusiasm to increase the base salaries of salespeople to keep them on the premises. As the BMS data shows in Chart Eleven below, over a third of medical firms are prepared to do so, against an all industry average of just 23%.

This makes sense; the BMS Index has consistently identified salary as a major issue within the medical sector.

“Over a third of medical companies are looking at increasing base salaries, higher than in most other

sectors. How sustainable this is in a tough market, only time

will tell.”

“Recognising market and product knowledge may not be the be all and end all to creating an effective medical sales person may

help the industry address it’s recruitment challenges.”

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IncreasedSalaries

Flexible Working Improved Benefits Extra Holidays More LucrativeBonus Schemes

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Q2 bms medical sales index

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