Product Manager Compensation Report

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Irene Wilson
5 years ago
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2017-2018 Product Manager Compensation Report We are pleased to release our 2017-2018 HCIT Product Manager Compensation Report.

1 Product Manager Compensation Report We are pleased to release our HCIT Product Manager Compensation Report. Our market space has never been more exciting to investors, leaders and young professionals looking for a market segment to develop their careers after graduation. In today s fastpaced business world, strong organizations are looking for new ways to deliver high quality products and services at reduced cost. Their goal is to reach potential customers faster, more effectively and grow their share of the market, all while facing increasing levels of competition from new entrants in the marketplace. To succeed in this environment, companies need not only an increased base of financial capital, but a constantly upgraded base of human capital as well. Leadership and human capital are key ingredients to realizing the success in scaling an HCIT business today. The war on talent and leadership has never been greater. Companies are going to see the shift with the new administration in a matter of months, not years. To compete in the future, HCIT organizations will need to drive talent management beyond the traditional brick and mortar based employees to include the new extended workforce. The growth in the blended workforce has already begun and there will be a war on talent that the US employers have never seen before. As you will see in this report, salary shifts have already started, as well as, employees having an increased ability to work remotely. As a thought leader in this market, our objective is to frequently publish meaningful data on Product Manager HCIT compensation. This compensation report was developed both to provide data to the HCIT market and to help our product management readers compare their own product manager compensation to their peer group based on company size, number of employees, industry experience, geographic location and a variety of other data points. We also gathered data on reporting structures, equity grants and the number of companies that are privately held as well as venture or private equity funded firms. Our firm, The Tolan Group, is dedicated to the HCIT market and we provide talent to any software or services organization that serves the provider, payer or health system/idn markets. We conduct search assignments for executive leadership as well as mid-level management and individual contributors. We know and understand this space extremely well and have had the pleasure to serve over 100 clients with their talent needs since our inception in We hope you find our report helpful as you compare our compensation data to your own or to product manager executives that lead a portfolio company you ve invested in.

2017 2018 PRODUCT MANAGER COMPENSATION SURVEY REPORT Our report represents the majority of titles in the product management space.

Note that roughly 31% of participants were true product managers and 30% in the senior and VP level.

2 PRODUCT MANAGER COMPENSATION SURVEY REPORT Our report represents the majority of titles in the product management space. This is helpful as you move through the report to get an accurate representation of where a product manager falls in terms of experience, tenure, and salary. Note that roughly 31% of participants were true product managers and 30% in the senior and VP level. The data shows us that most of the product managers and leaders in this report have significant experience. A whopping 38% have been in the product management space for 12+ years which is a very impressive metric. Conversely, the smallest percentage in our polling shows that a mere 6% have between 0-3 years of experience. What s more interesting is almost ¾ of all product managers in this study have between 7 years and 12 years of product management expertise. While this demonstrates phenomenal tenure the data also shows us that many of these talented and tenured product managers and leaders command a higher than normal salary and will expect a performance based bonus plan.. 1

2017 2018 PRODUCT MANAGER COMPENSATION SURVEY REPORT Software leads as the largest single segment in our space with the other segments such as revenue cycle and provider markets showing significant

The companies that are solely focused on Payer and Services-Only solutions are much lower as the two sectors converge in the Accountable Care world we have all embraced.

3 PRODUCT MANAGER COMPENSATION SURVEY REPORT Software leads as the largest single segment in our space with the other segments such as revenue cycle and provider markets showing significant numbers. Niche solutions like Big Data and Analytics are also showing large numbers and continued growth. The companies that are solely focused on Payer and Services-Only solutions are much lower as the two sectors converge in the Accountable Care world we have all embraced. 22% 11% 22% 45% The data shows us that the south continues to be a source for where many of the HCIT companies reside and or where the majority of product managers live that work remotely. The eastern ½ of the US is where the talent is across the HCIT space but the western region continues to grow. No real surprise that the Midwest and the upper Midwest have fewer people and companies in this market space. Most of our respondents are from privately held companies (49%). Followed publicly traded companies at 37%. There are many companies with revenues below $10M, which will drive further consolidation and increasing the size of publicly traded companies. Only 14% of those surveyed work for Venture Capital/ Private Equity backed companies, which may see a drastic shift in the next few years as VC/PE companies are on the rise. 2

4 PRODUCT MANAGER COMPENSATION SURVEY REPORT There has been a shift in the last year that reflects in these numbers. As we all know, HCIT, while a hot market today, has historically been made up of smaller sized companies. This also indicates the number of early stage and start-up companies in our space fueled mainly by the extraordinary amount of capital that has been invested over the last few years. We have seen the press releases of these companies being acquired that you can see represented on this chart. A large percentage of companies are in the$101m+ category or 60% in this report. The same story holds true when it comes to the size of the companies in this report as measured by the total number of employees. The largest percentage of those surveyed have more than 100 employees which is indicative of the large companies acquiring small successful start-ups (representing 71% in this chart). Also noted are the number of companies with employees, followed by an even smaller number of companies with under 50 employees. This chart represents the direct reports. Product Management teams are historically small, which is representative in this chart. Even those employees with a title of Director or VP, very often do not have more than 10 reports which represents less than 10%. Most have a core team of leaders that drive production. This may be surprising when compared with the company size in annual revenue and number of employees. 3

2017-2018 PRODUCT MANAGER COMPENSATION SURVEY REPORT When you evaluate this chart, you see that less than 10% of those surveyed have a base salary lower than $100K.

5 PRODUCT MANAGER COMPENSATION SURVEY REPORT When you evaluate this chart, you see that less than 10% of those surveyed have a base salary lower than $100K. This is a significant representation of what we see in the market today. On the other hand, over 30% of those surveyed earn a base salary of more than $150K. Product managers work on small teams and drive a higher salary because production needs to be high. The chart shows us that most of the employees in the product management market don t have equity in the companies they work for. This could be, in part because of the number of employees in non-leadership roles (31%). Our experience shows us that many product managers at the Director or VP level receive stock options in companies of all sizes while startups and early stage companies tend to use equity as a tool to recruit an retain employees. Stock options are back in favor by candidates much more today now that the economy has made a positive shift. This is very synergistic with the changing ecosystem that we are seeing in HCIT. 50% of those surveyed received a bonus of over 10% and only 21% received no cash bonus at all. As salaries for product management talent increase, a way for companies to compete is to offer a higher bonus on top on top of salary. As the market continues its shift to a candidate driven market we will continue to see these numbers rise in the fight for great talent or more companies shift to a split work force making use of contract workers. 4

2017-2018 PRODUCT MANAGER COMPENSATION SURVEY REPORT Advanced degrees are becoming more prevalent which is a result of the market shifting to a company driven market a few years ago.

While expectations for performance will not decrease as the market shifts back to a candidate driven market with labor shortages we may see a Bachelor s degree preferred with experience with no

6 PRODUCT MANAGER COMPENSATION SURVEY REPORT Advanced degrees are becoming more prevalent which is a result of the market shifting to a company driven market a few years ago. Many companies had a Bachelors requirement for product management candidates with a preference for an advanced degree. While expectations for performance will not decrease as the market shifts back to a candidate driven market with labor shortages we may see a Bachelor s degree preferred with experience with no mention of an advanced degree. Ȧnother interesting statistic is tenure. We knew these numbers would look interesting because of the number of companies formed in the last 8-10 years, and the number of those companies acquired in the last 1-2 years. Of those surveyed, a whopping 83% have been with the company for less than five years with 24% of the respondents still working towards their first 12-month milestone! Overall longevity on tenure is surprisingly low with 17% reporting they have been with the same organization for more than 5 years while only 3% of those surveyed have been in the seat for more than 10 years. Because of the changing marketplace, we knew the number of companies shifting to an Agile environment was substantial 59% reporting this change. Added to that number, would be those in a hybrid or transitional stage of another 28%. A very low 13% are still working with Waterfall or another methodology that we assume will be obsolete in the next few years.. 5

2017-2018 PRODUCT MANAGER COMPENSATION SURVEY REPORT When you evaluate this chart, you see that only 20% of those surveyed travel more than 30% of the time.

Technology will never be able to replace the face to face interaction however, travel will always exist in a product management client facing position.

7 PRODUCT MANAGER COMPENSATION SURVEY REPORT When you evaluate this chart, you see that only 20% of those surveyed travel more than 30% of the time. Technology is being used more every day in companies to hold meetings virtually. This results in lower travel percentages and a higher production rate as less time is spent on the road. Technology will never be able to replace the face to face interaction however, travel will always exist in a product management client facing position. It is apparent that more companies are offering a flexible environment to match the ever-changing ecosystem in the workplace. Only 28% of those surveyed works from their office full-time. We have seen a year after year increase in the number of candidates that request working from home and clients preferring that candidates work from home to increase productivity. More than 70% surveyed work from home at least part of the time. Just over 1/4 of the product managers we polled are very satisfied in their current position while more than half are somewhat satisfied or neutral. Those are good numbers but the balance of those surveyed fall into an entirely different camp as 11% are somewhat dissatisfied. Only 2% of those surveyed are very dissatisfied which is not a very large percentage overall - unless you must work under their leadership! All in all, our product managers are satisfied with the work they do. 6

2017 Engineering & Architecture C-Level Compensation Report

2017 Engineering & Architecture C-Level Compensation Report We are pleased to release the 2017 Engineering and Architecture C-Level Compensation Report. This report was conducted by the Smith Consulting