#United States #Life Sciences #Berkeley Heights #Axtria #Incentive Compensation

Introduction

In a bid to revolutionize the life sciences industry, Axtria Inc., a leading cloud software and data analytics provider, has announced the release of two new comprehensive benchmarking studies: the Global (Ex-US) Incentive Compensation (IC) Benchmarking Study and the US Incentive Compensation Benchmarking Study. These studies are designed to equip organizations with vital insights into sales compensation trends, helping them design effective incentive programs that not only enhance performance but also drive profitability.

Importance of Benchmarking in Life Sciences

With the ever-evolving dynamics of the life sciences sector, it has become crucial for organizations to adapt and innovate. Asheesh Sharma, Head of Commercial Excellence at Axtria, emphasized the necessity of utilizing these robust benchmarking insights to respond to the rapid shifts in market trends. Companies can significantly benefit from optimizing their compensation structures and integrating Management by Objectives (MBOs) into their incentive plans. These strategies are fundamental for achieving overarching sales goals while boosting motivation within teams.

Key Findings from the US Incentive Compensation Benchmarking Study

1. Prevalence of IC Plan Types: The study reveals that individual goal-based plans remain the most common for Healthcare Providers (HCP) and account teams, highlighting their effectiveness in driving performance. Moreover, management by objectives is now a consistent component for market access teams, illustrating a shift towards more structured incentive plans.

2. Data Metrics Usage: Demand unit-based metrics continue to dominate as the primary data metric for HCP teams. Interestingly, the use of net sales/revenue metrics has plummeted among HCP sales teams, showing a decrease from 25% in 2023 to just 12% in 2024. Conversely, account teams have shown a notable rise in utilizing these metrics, now at 36%.

3. Surge in Rare Disease Focus: The study indicates that patient starts in rare diseases have significantly increased, climbing from 29% in 2023 to over 40% in the current year, showcasing a growing commitment towards specialty areas.

4. MBO Prevalence: Approximately 40% of account teams have MBOs integrated into their IC plans, while all market access teams have adopted similar components. However, only 10% of HCP teams have MBOs in their incentive plans, suggesting a potential area for improvement.

5. Average Pay Cap: The overall pay cap for IC plans in oncology and rare disease categories appears favorable for top performers, averaging at 2.75x and 3.5x the target pay, respectively, which encourages competitive performance.

Insights from the Global (Ex-US) Incentive Compensation Benchmarking Study

The Global study offers a thorough analysis that covers several key areas:

• - Pay Mix Analysis: Insights into how pay mixes vary by team, therapy area, and region, which can assist organizations in aligning their compensation strategies with best practices globally.
• - Incentive Plan Design: A detailed understanding of preferred IC plans, data metrics, and measurement methods has been compiled, streamlining the design process for newly introduced or existing incentive programs.
• - Pay Outcomes Benchmarks: Organizations can now better gauge engagement KPIs and make informed decisions based on top performer differentiation and overall budget utilization aimed at achieving national targets.
• - Custom MBOs: Recommendations for tailoring MBOs to different roles and teams ensure that incentive structures remain relevant and motivate staff effectively.
• - Best Practices in Reporting: With insights into IC reporting best practices across teams, organizations can standardize their reporting mechanisms for better consistency and effectiveness.

Maximizing Performance and Driving Growth

The insights gleaned from these studies are invaluable for life sciences organizations. They facilitate the identification of existing gaps and opportunities within current compensation plans, allowing companies to refine their programs.

By keeping abreast with trends, gaps, and industry best practices, organizations can develop incentive plans that are not only responsive to market dynamics but also actively promote team performance and sustainable growth.

About Axtria

Operating at the forefront of the life sciences industry, Axtria is proud to collaborate with 16 of the top 20 global life sciences companies. The firm has transitioned from being a trusted consultant to being recognized as a leader in providing cloud-based pharmaceutical management solutions. Axtria's commitment to transforming data into actionable insights solidifies its position as an indispensable partner for pharmaceutical, medical device, and diagnostics companies, facilitating their journeys from data to insights to impactful actions. For further information, please visit Axtria's website.