Medtech Observations, #ISO 8 weeks in
The federal Government of Australia this week announced the easing of lock down restrictions that have been in place across the country since March in attempt to not just “flatten the COVID-19 curve”, but virtually eradicate the virus. This weekend will see cafe’s, restaurants & pubs open their doors once again to the general public and is a sure fire sign that we as a nation are taking our first steps on the (bumpy?) road to recovery. No matter your politics and your views on Scott Morrison’s handling of the pandemic, Australia & New-Zealand are the envy of the world and there is an horizon, albeit a somewhat blurred one, in sight. As the economy slowly starts to kick back into gear and as we see a gradual return to offices across the country, I wanted to share my thoughts on how the Medical Device industry has rallied and responded over the last 6-8 weeks, how have Medical Device professionals been impacted & what does the rest of 2020 look like for our industry.
The Medical Device sector has been well and truly at the epicentre of the crisis. The COVID-19 pandemic has seen an increase in demand for all types of medical devices and some companies are seeing a huge surge in revenue as this demand continues to rise. Medical Device companies who manufacture and distribute ventilators, medical clothing, face masks, and diagnostic devices such as test kits are smashing their targets and are having difficulty keeping up with demand, whereas the revenue of companies, whose products rely heavily on elective and non-essential procedures, are expected to be impacted negatively now and into the future.
Many Tier 1 global device companies including Stryker, Smith & Nephew & Boston Scientific have revised their financial guidance for 2020 due to the uncertainty associated with the degree and duration of the impact of the outbreak, all three of these companies rely heavily on elective procedures as mentioned and the demand for their products so are perhaps more exposed than companies like Abbott or Roche who offer a diversified portfolio in areas which are seeing an increase in demand and activity as a direct result of the pandemic. The conversation’s I have had with clients and candidates over the last few week’s go someway to validate this theory in practice. What then is driving change and impacting our industry so broadly?
Just this afternoon, Scott Morrison announced the resumption of elective surgery across Australia. “The boom is going up on elective surgery all around the country,” he said, following the complete removal of restrictions on Elective surgery in SA on Thursday 14th May, this news will be welcomed by patients who had their surgeries cancelled due to C-19 and those that work in the medtech space. Many of our clients and candidates have been sitting and waiting to see how things would be opened up, and whilst some specialties including Orthopaedics have seen some increase in activity over the last few weeks, up until now other areas, such as CMF, Bariatrics, ENT & Colorectal were still on a hard stop resulting in increased waitlists and frustration across the board.
We are all aware of the so called “second wave” and I have no doubt that the tap will be turned back off should we see a spike in numbers and infections. The general feeling is we have the resources and capacity to deal with an inevitable second wave and I am hopeful elective surgery and the work to make up for lost time will begin in earnest. For those of you that work in surgical sales, hold on to your hats, you are going to be busy!
Clearly, when there is an overnight downturn in revenues, companies will look to put measures in place that protect the livelihood of their employees and the viability of their business. I have said repeatedly for the last 8 weeks, if you work in medical devices and you haven’t been impacted economically, you can count yourself very lucky. It is reassuring that we are yet to see widespread, large scale redundancies as we have in other sectors, and I am hopeful we won’t. Whilst we have seen pockets of redundancies, most of those companies are now looking to re-hire those they let go, if they haven’t already. I am sure the combination of jobkeeper relief payment and the news around elective surgery has given these hiring managers confidence that good times will return and they wont be too far away.
It would seem that reduced working hours and enforced leave are the norm for most businesses with the impact ranging from 20% up to, in some circumstances, 80%. As much as this hurts the general feeling across the board is that people are simply thankful to have a job, and the hope is that these measures are short lived, simply put in place to navigate the uncertain waters and preserve cash. Teams I think are becoming closer, people are getting to know one another better (not least due to countless, and dare I say it (**meaningless**) zoom calls. This however, can only be a good thing, it is a shame that it has taken a global pandemic for many teams for feel more “connected”. Medical sales can be a lonely job, perhaps coming off the back of this it wont feel quite as lonely.
Naturally, from a hiring perspective, things are generally pretty quiet, but it is without doubt getting busier. Some of the roles we were actively working on 2 months ago which were put on ice are now coming back, again likely due to renewed confidence around the reintroduction of elective surgery. Many Tier 1 global companies have indefinite hiring freezes in place, given the plight of other countries, in particular the US, the local branches of those businesses are often governed by the mother ship and until fortunes in other countries start to turn, I don’t expect to see those freeze’s thawing out anytime soon. Many companies however are continuing to speak with good talent in anticipation of a revival, which is the smart play. This past week I have seen more roles pop up across the market which is indicative of where we are at as a nation. I am hopeful we will continue to see things ramp up as we move forward into winter.
We have seen a surprising increase in enquiries from candidates, from those proactively looking for work to those who are keen to open up early discussions around the market and see what is out there. Despite the obvious challenges presented by C-19, this time is being used by many to assess their lives and with that, whether they are in a job and company that makes them happy. This results in a surge of good, quality candidates who are excited about the prospect of a move and are taking a proactive approach to seek advice from people like me about what the market is doing, who is hiring & what opportunities exist.
If you are a hiring manager, the message is simple; use this time to speak to talent. There has never been a better time to speak to good people. You have an active audience, you can dedicate time in an efficient way and people are keen to speak with good companies. Sure, you may not have a vacancy right now, you may not know when you will, but make those connections now, I can absolutely guarantee that your competitors are doing it. Use this time to determine what your business and team truly needs and you will be better equipped when we start to turn a corner. Sometimes it is easier to determine the cost of hiring someone than to determine the cost of NOT hiring someone, and in competitive areas like Ortho, Spine, & Cardiac, lost business through lack of resource is a very strong possibility.
The rest of 2020
As has been the case since we all went into lockdown some 2 months ago, things are evolving on a daily basis and not least the outlook for the medtech sector across the remainder of the year. Given restrictions are to be eased this weekend and elective surgery is to be reintroduced, medical device leaders here in Australia will have a much better idea a month from now as to how the rest of 2020 will pan out. Capacity, case numbers and elective bookings are all essential metrics that these leaders will be looking into closely, and with baited breath, to decide to what strategies they put in play to tackle the back half of 2020 and beyond, it is perhaps still too early to predict.
I encourage everyone to remain optimistic, positive and hopeful. However bad the storm, there is always sun somewhere over the horizon.