Like any other aspect of Obamacare, the tax on medical device sales is controversial. Implemented in January 2013, the legislation imposes a 2.3 percent excise tax on the sale of medical devices.
Those who argue the tax should be repealed have predicted it will result in job cuts, declines in domestic hiring, and an increase in hiring talent overseas. A small survey published by AdvaMed in January 2015, reports the tax is responsible for employment reductions of 4,500 industry workers in 2014 and companies will avoid hiring an additional 20,500 employees over the next five years. In addition, close to 10 percent of companies surveyed reported moving manufacturing outside of the U.S. or expanding manufacturing abroad because of the tax.
Others have claimed these potential negative impacts are exaggerated and will be offset by increased revenue the companies will gain from the thousands of new patients enrolled in health care plans this year.
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Although the impact of the tax is still unclear, here are some potential effects Obamacare will have on hiring in medical technology:
Recruiting On the Dime
In the wake of the excise tax, corporate recruiters may turn to less expensive hiring strategies. With a cut budget and fewer resources, finding the right candidate may take a little more elbow grease, but won’t be impossible.
Inexpensive tools including social media, job search platforms, niche job posting sites, and virtual meet-ups may become the weapons of choice for in-house medical technology recruiters. Old-fashioned networking is free, so building relationships and tapping into professional and personal networks may help find the best hires at the lowest prices.
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Less Attractive Offers
The excise tax may also leave some medical technology companies with less money to offer their employees. According to the Advamed survey, many companies reported reducing or deferring increases in employee compensation.
The Cadillac tax, another provision of Obamacare, could also affect benefits packages offered to employees. The regulation will require a 40 percent excise tax on employer health plans at and above $10,200 for individuals and $27,500 for families. Although the tax won’t go into effect until 2018, employers are already preparing to avoid the extra cost.
About 73 percent of companies surveyed in a September 2014 report by Towers and Watson are concerned they will be hit with the tax, and 62 percent reported it will have a moderate or greater impact on their health care strategy in 2015 and 2016.
With lower salary offers and decreased health benefits, recruiters will need to place greater emphasis on non-financial perks of the job, such as company culture, to attract top talent.
Emphasis on Culture
Finding job seekers who are a good match with a company’s culture is always important but may become a greater focus for medical technology companies under Obamacare.
Financially strapped companies won’t want to invest in candidates who will require valuable resources, time, and money to work with—no matter their credentials. Likewise, corporate culture will be more important to job seekers who receive less appealing financial offers.
When hiring, more emphasis will need to be placed on recruiting individuals who fit the culture, instead of focusing on experience and fitting the employee to the team after they are hired.
There is no crystal ball to tell us exactly how the various tenets of Obamacare will affect the industry. For better or worse, the Affordable Care Act is bound to impact medical technology sales hiring, and recruiters will need to invest extra time, energy, and effort to overcome the potential challenges triggered by the regulations of Obamacare.
Robyn Melhuish is the Communications Manager at MedReps.com, a job board which gives members access to the most sought after medical sales jobs and pharmaceutical sales jobs on the Web. Connect with Robyn and MedReps.com on Facebook, Twitter, and LinkedIn.
