2005 Salary Survey Results
Salary statistics and shortage data give broader picture
More pharmacy graduates choosing direct patient contact, pharmacists say
Most pharmacy administrators continue to make $90,000 or more a year, according to the 2005 Salary Survey conducted by Drug Formulary Review (DFR). Three-quarters of respondents also say they work 50 hours or fewer a week. Still, pharmacy management positions are getting even harder to fill, according to another survey.
Most respondents are directors
DFR recently tabulated the results of its 2005 Salary Survey to assess the financial and workplace demographics of its readership. Here are some of the findings:
- Seventy-five percent of the 20 respondents report earning more than $90,000 annually. In comparison, 94% of the 2004 survey respondents reported earning more than $90,000 annually.
- Since pharmacist salaries across the country are not decreasing, the fewer number of pharmacists reporting salaries $90,000 and above this year is most likely due to the sample of pharmacists who responded to this survey.
- The majority of the 2005 respondents (80%) are administrators, directors of pharmacy, or assistant/associate directors of pharmacy. Other titles include clinical pharmacist or coordinator.
- Ninety percent of respondents report being 46 years old or older (one respondent did not answer the question) and 70% are men (two respondents did not answer the question).
- Ninety percent of respondents work in a hospital or clinic; 80% work for a nonprofit facility.
- Thirty-five percent of the respondents work in an urban location, and 70% live in the Midwest or Northeast.
- All but three of the respondents say they have worked in pharmacy for 19 or more years, and 75% of them work 50 hours a week or fewer.
- The number of respondents who have a PharmD degree has increased (35%) slightly from last year’s survey. Last year, 32% of respondents said they had the degree. Other degrees the respondents hold include BS, BSPH, MS, and MBA.
- The 2005 survey shows that about 55% of respondents’ salaries increased in the range of 1-3%. Fifteen percent had an increase in the 4-6% range. Two respondents report an increase of 7-10%, and one reports an increase of 21% or more. The context for the higher increases is not known.
In comparison, the Social Security Administration calculated the latest automatic cost-of-living adjustments (COLAs) to be 2.7%. The COLAs prevent inflation from eroding Social Security and Supplemental Security Income benefits. (To see how COLAs are calculated, see www.ssa.gov/OACT/COLA/latestCOLA.html.)
In addition, the 2004 level of median household income — $44,389 — was slightly below the 2003 level, but the change was not statistically significant, according to the Economic Policy Institute in Washington, DC. However, the 1.2% decline in real household income for nonelderly families from 2003 to 2004 was statistically significant, implicating a weak job market in these results. Since 2000, the median household income of nonelderly households is down $2,572 (or 4.8%) compared to $1,669 (or 3.6%) for all households.
Concern over filling director positions increases
The salaries may remain higher than the nation’s median, but health systems across the nation seem to be struggling more each year to fill their open pharmacy manager positions, according to the latest staffing survey conducted by the American Society of Health-System Pharmacists (ASHP) in Bethesda, MD.
Conducted annually, the study found that 43% of the 384 respondents believe that there are severe shortages of health-system pharmacy directors and assistant directors. Last year, 36% of the respondents perceived this shortage.
Often, pharmacy directors stay in their positions for years, reports C.S. Ted Tse, PharmD, MBA, clinical pharmacy coordinator at Advocate Trinity Hospital in Chicago.
There are three major reasons the directors have stayed in their field, he explains:
- They are the survivors of hardship or bad times at their health care institutions.
- They have experience in dealing with finance and personnel issues.
- They like aspects of their job such as the day-to-day challenge and prestige.
"Managers who had been managers for more than 10 years have gained through their experience and will most likely to stay in their field for many more years," he says.
Another pharmacist agrees. "The first five to 10 years you work as staff and then you ask to make the move to become a director," says Tim Stacy, RPh, MBA, system director of pharmacy for Children’s Healthcare of Atlanta. "You usually stay as a director for quite while after that, [until] you get fired or retire. You don’t often go back to being staff."
Being discharged from your management job is a real possibility in the hospital business, Tse says. "Cost containment is a major factor in survival. If the manager is not familiar with ways to cut costs and use the least number of staff to handle the increasing workload, or ways to deal with mounting litigation or personnel harassment issues, he or she is not going to last long."
For most institutions, if the new opening is in a hospital with more than 250 beds, the executive administration committee usually will give the new director about six to nine months to turn around the worsening financial situation or deal with the existing personnel shortage problems, he continues. "If new managers cannot handle it, they will be forced to go. Only experienced managers can handle these tough situations in most settings. Inexperienced managers may not be able to cope with them or sustain the pressure."
Younger, less experienced pharmacists in the local area may also be reluctant to apply for director jobs when they know the situation is difficult, especially when the former director left on bad terms, Tse says. Because of this, health care institutions often find it better to promote managers from existing staff.
"Most new directors in the last 15 years have previously been clinical pharmacists, supervisor/managers, or clinical coordinators [from within the institution]. They knew the medical staff well and have established a good rapport with administration," he says.
New graduates choosing other paths
There is another reason why assistant directors and supervisors tend to be promoted to open directors’ positions. Not many new pharmacy graduates are choosing the management path. "The trend now is for people to become clinical pharmacists and not managers," Stacy says. "There is a void in management, in the supply chain of young managers and people who want to become leaders."
Pharmacy students go to school for seven years, and receive comprehensive clinical knowledge, he says. Why don’t they use it? "Out of the three years of pharmacy school, they only spend a couple of classes on any kind of management exposure. It’s all clinical pharmacy knowledge." The pay is not that different from being a director, and as a clinical pharmacist, the graduates have patient involvement.
Majority of grads begin in retail
New pharmacy graduates can earn more than $100,000 yearly in a retail setting with very good benefits, Tse says. Many also don’t want the headache of being a manager who cannot sleep well at night and is stressed all the time.
Most new graduates will end up in retail settings since they pay the most and most have to pay off their college loans, Tse says. He sees this breakdown of jobs for new graduates:
- Retail pharmacy: 65%
- Managed care/consultant pharmacy: 10%
- Teaching positions: 5%
- Research /pharmaceutical companies: 5%
- Clinical/hospital positions: 10%
- Others: 5% (graduate study, pharmacy residency, fellowship, etc.)
About 30-50% of the new graduates entering the retail pharmacy field will attempt to work in the hospital settings or other fields after three to five years, Tse says. "This happens when they are burned out in the fast-paced retail setting or have paid off most of their college loans and want a slower pace or want a more challenging environment. At this time, they may consider a management position."
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In the Last Year, How Has Your Salary Changed?
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