The State-of-the-Lab in 2013

Benchmarking—the process of comparing performance of peers or peer groups—is useful in understanding and evaluating relative performance. It helps manage, since one can compare a particular group with a composite of many. If large differences exist, the question is “Why?” Is the particular operation atypical for the sample cohort with good reason? In many cases, the specific example is different than the proposed control group. Understanding these differences is key to managing the dynamics of an organization and for justifying compensation.

Salary surveys are useful in comparing responsibility and performance, especially for individuals. But what are the macro trends? These are also important. If you are a lab manager, or report to one, you need to be aware that benchmarks are useful in measuring relative performance in the marketplace. Some firms want certain labs to be “best in class,” while others are satisfied with “competitive.” If your group is doing better than peer groups, you need to make sure this is recognized.

If you are not leading, performance may still be accepted as good enough. If it’s not, then you should consider why and what can be done to mitigate the performance deficiency.

Survey says…
Most of us have all been affected by the recession. As lab rats, we want to know how we are doing and what we can expect. For the last seven years, K.C. Associates ( has surveyed laboratory operation using a cohort of about 1000 selected randomly from a database containing over 200,000 names of lab employees in the U.S. The sample size for each year ranges from a low of 756 to a high of 1128. Generally, the respondents are managers and technical staff. The statistical design is expected to give an estimated uncertainty of ±3%. The sampling surveys staff in existing labs, so there is possibly a sampling bias favoring organic growth and undersampling of new labs.

Overall, the 2013 survey shows that labs are in a rut, with minimal change in staffing or spending over the last four years (see Warawa, K.C. 2013 LPA-SLAS Purchasing Trends Survey; lecture 1/15/13, Orlando, FL; Laboratory Products Association; Fairfax, VA). Indeed, results for January 2013 are virtually indistinguishable from January 2012. This is not all bad, since 2012 was generally seen as growing but only by low single digits (~3%). Obviously, low growth is better than contraction.

The average lab in 2013 included 20.5 FTEs. The majority of respondents (57%) expect staffing to remain constant in each coming year. Indeed, about half did not forecast hiring staff, and only about 25% expect to hire replacements. Forecast reductions in staff via layoffs and early retirements are only 6%. Thus, staffing seems to be very stable.

In contrast, about 55–60% of respondents expect workload to increase, while 10% or less expect a decrease in workload. This reinforces the expectation of no change. However, for the few that forecast decreases in workload, about 60% expect corresponding reductions in staff. Outsourcing is not expected to change, as per 70% of the cohort. Even spending on IT will remain steady, with 79% forecasting no change.

Vendors dominate the membership of the LPA. Hence the survey explored purchasing plans. Only about 25% of the labs expect to increase spending in capital equipment. A solid majority forecast no change. Expectations for lab apparatus (noncapital and nonconsumable) were similar. The picture was a bit more optimistic for consumables, with a 22% margin expecting more purchasing than decrease. This seems to be consistent with the anticipated increase in workload.

Macro economic conditions were explored. Recall that the Budget Control Act of 2011 requires spending reductions over the next decade starting in 2012. The potential impact was explored in the January 2012 survey. The predicted impact was minuscule. Fully 75% forecast no effect in 2012.

The spending debate is even more intense in 2013, but with all the bluster, the “stay the same” percentage dropped 10%, but most of that went into the probable increase column, particularly for consumables. The expected impact is a 27% increase vs a predicted 13% decrease. The impact is about even between increase and decrease for laboratory instruments and apparatus.

Perhaps reduced spending will favor using more legacy technology. Many labs are striving to reduce their environmental footprint by investing in new instruments that require less reagents. This is particularly true in plate-based assays, where 96-well plates are being replaced by 384- and 1536-well plates, which reduces the well volume from the mL to nL range.

A bright spot on the horizon
At first glance, the brightest spot in the survey appears to be the formation of new labs within the next three years. In 2012, 39% predicted laboratory expansion or formation of a new lab. In 2013, the percentage dropped to 33%, which is still a large number. However, the rate has remained remarkably constant over the last six years, with an average of 38% ± 3% (n = 6) and no trend in the data that correlates with the recession. One possible explanation for this apparent inconsistency is that industry is seeking to grow, but the slow recovery is delaying implementation.

New labs probably are the best growth prospects for vendors and for employment. It is amazing how quickly the chemical industry has responded to the low energy prices resulting from shale gas. When combined with shale oil, America may once again be the preferred location for chemical production. Plus, thanks to our leading environmental technology and regulations, emission of greenhouse gases should be under our direct control.

Robert L. Stevenson, Ph.D., is a Consultant and Editor of Separation Science for American Laboratory/Labcompare; e-mail: [email protected].