Instrument and laboratory product companies brought new employees on board last year, indicating the strength of their recovery following the 2009 recession. In fiscal 2010, productivity growth for 20 major publicly held laboratory instrument and product companies climbed 5.1%, compared with a decline of 2.5% in fiscal 2009 for the same companies (see IBO 6/30/10).

The rise in productivity, as measured by average sales in US dollars per employee, can be attributed to the economic global recovery, restructuring and spending constraints. Most of the companies examined by IBO (see table, page 3) expended capital cautiously and allocated resources primarily to high-growth markets and emerging territories.

IBO’s calculations are based on fiscal 2010 employment and currency-neutral sales figures in US dollars for 20 instrument and laboratory product firms. The exception is Oxford Instruments for which figures for fiscal 2011 ending March 31 are used. Revenue growth for international companies is calculated at constant exchange rates.

For the 20 companies, revenue growth rose 7.8% in fiscal 2010, led by higher customer demand, product introductions and acquisitions. Employment at these companies increased 2.5% on average. As a result, average sales per employee improved to $288,649 from $274,556. The range of average sales per employee among companies is due to several factors including the company’s products, product development phase, size, end-markets and distribution.

Illumina had the highest average sales-per-employee ratio among companies in the table at $429,877. Illumina’s productivity grew 14.9%. To facilitate demand, sustain growth and create a diagnostics business, the company expanded its head count by 17.9%, primarily for R&D, production and distribution. The acquisition of Helixis (see IBO 7/31/10) also added to its workforce. Illumina was the only company to generate productivity of more than $400,000. Five other companies had productivity of more than $300,000: FEI, Affymetrix, Tecan, Waters and QIAGEN.

In total, 16 companies reported productivity growth last fiscal year, including seven with productivity growth in double digits. These seven companies also posted double-digit revenue growth. PerkinElmer recorded the largest productivity increase, as its productivity climbed 24.4% due to restructuring to focus on high-growth markets. The company divested its Illumination and Detection Solutions (see IBO 8/31/10), which had more than 3,000 employees. PerkinElmer also closed several facilities and terminated 113 and 115 employees in the second and fourth quarters, respectively. However, PerkinElmer strengthened its sales and marketing operations primarily in emerging territories and expanded its product offerings for research and diagnostics via acquisitions. The net impact on its workforce was a reduction of 24.4%, or 2,000 employees. Geographically, the Americas, Europe and Asia-Pacific accounted for 46%, 32% and 22% of its labor force, respectively.

Also recording double-digit productivity growth last fiscal year were Sequenom, FOSS, Harvard Bioscience, Oxford Instruments and Analytik Jena’s Life Science and Analytical Instrument businesses. Interestingly, the Analytic Jena businesses (fiscal year ending September 30, 2010) had the lowest average sales-per-employee ratio of $150,618 among companies in the table. Nonetheless, productivity for the Analytik Jena segments grew 13.2%. Revenues for the segments rose 16.8%, primarily due to the acquisitions of Biometra (see IBO 4/30/09) and CyBio (see IBO 3/15/09). Despite a 23.8% climb in productivity, Sequenom sustained the second-lowest average sales-per-employee ratio of $200,249. Revenues jumped 25.3%, but hiring was constrained because of the development of noninvasive diagnostic tests.

Both FOSS and Oxford Instruments benefited from a recovery in sales following the recession, boosting productivity 14.8% and 13.9%, respectively. Oxford Instruments also reported positive results due to restructuring efforts. Following a productivity decline of 6.9% in 2009, Harvard Bioscience increased productivity 14.2% due to acquisitions and restructuring. Sales grew 26.1% including 21.5% growth from acquisitions. Head count increased 11.8%, but was partially offset by consolidation at its Panlab operations in the third quarter.

Acquisitions also benefited productivity for Biotage, Thermo Fisher Scientific and QIAGEN. Full-year Biotage sales climbed 15.8%, including 12.4% growth from acquisitions. The company added 15 and 8 employees from the MIP Technologies (see IBO 4/30/10) and Caliper Life Sciences (see IBO 5/31/10) product line acquisitions, respectively. Total head count grew 11.0%, and productivity rose 4.3%.

Sales for Thermo Fisher Scientific grew 6.9%, including 2.6% growth from acquisitions. The company completed 11 acquisitions during the year and added R&D and sales personnel, primarily in emerging markets. The smaller of the purchased companies, Finnzymes (see IBO 2/15/10) and Ahura Scientific (see IBO 1/31/10), had roughly 90 and 120 employees, respectively. Fermentas (see IBO 5/31/10), B.R.A.H.M.S. (see IBO 9/15/09) and Biolab (see IBO 4/27/09) had approximately 340, 400 and 380 employees, respectively. Despite the sizable net addition of 1,800 employees, or 5.1% of its workforce, productivity improved 1.7%.

As with FOSS and Sequenom, QIAGEN added few employees last year. Productivity for QIAGEN grew 4.9% in fiscal 2010, and sales grew 7.7%, including 4.0% growth from acquisitions. Revenue growth was partially offset by strong H1N1-related sales in 2009. The company expanded its R&D and marketing staff by 6% and 8%, respectively, primarily in Europe due to the acquisition of DxS (see IBO 9/30/09). Sales head count in Asia grew 7%. Overall, administrative and production positions were cut by 2% and 1%, respectively, following the integration of businesses acquired in 2009.

Similar to QIAGEN, FEI and Sigma-Aldrich improved productivity with limited employee growth. FEI’s productivity grew 9.6%. The company added only 22 employees, or 1.2% of its workforce. Sigma-Aldrich increased its head count by only 1.9% in spite of several small acquisitions. Several positions were reduced following 2009 restructuring activity and layoffs of 130 employees.

Tecan was one of three companies in the table to reduce its total number of employees in fiscal 2010. Tecan also reorganized operations last year to achieve productivity growth. The company divested its Sample Management business (see IBO 7/15/10), which had roughly 120 employees. In total, Tecan cut its workforce by 5.6% last year, including a 23% decline in manufacturing and logistics personnel. As part of strategic realignment and growth of its OEM business, the company expanded its R&D department by 27% to make up 19% of its workforce. The company announced two large OEM projects in fiscal 2010, which will together occupy 100 employees. Fiscal 2010 sales were slightly lower but improved 8.4% excluding discontinued operations.

Aside from Tecan and PerkinElmer, Affymetrix was the only company to reduce its head count last year. The company lowered its labor force by 7.5%, or 74 employees, leading productivity up 3.2%. Affymetrix was the only company in the table to report a decline in sales in fiscal 2010. It was the second year that revenues declined for the company.

Five of the 20 companies experienced productivity declines. Caliper Life Sciences sustained the largest productivity loss, with a 6.0% decrease. The decline is due to a 17.0% jump in employees due to the timing of its CRi acquisition on December 17, 2010 (see IBO 12/15/10). CRi had 49 employees. Bruker’s productivity was also negatively impacted by acquisitions. Bruker reported 18.7% revenue growth, including 6% growth from acquisitions, but grew head count by 20.0%, or 904 employees. The increase included a 30% jump in the number of sales and marketing personnel. The company added 250 employees following its acquisition of former Varian product lines (see IBO 3/15/10) and more than 350 positions from its purchase of Veeco product lines (see IBO 8/31/10). Productivity narrowly declined at Luminex, as the company added employees to increase R&D and production of new assays and instruments and to expand international infrastructure.

Life Technologies was excluded from the table due to disparate employee numbers for fiscal 2010 compared with fiscal 2009. According to reported figures, productivity for Life Technologies fell 11.4% due to a 22% increase in the number of employees. However, this increase is misleading as it includes temporary and contract employees who are not reflected in the 2009 figures. The company did reveal slightly lower R&D head count but an increase in sales and marketing personnel.

 Company                    Curr. Neu.   # of Employees  Empl. Chg.   Rev. Chg.  Productivity Chg.

                              Sales                      Curr. Neu.   2009–10      2009–10

                           per Employee                   2009–10                     

 Affymetrix                 $341,401             915       -7.5%       -4.5%        3.2%

 Analytik Jena (excl. Opt.) $150,618             676        3.2%       16.8%       13.2%

 Biotage AB                 $205,866             272       11.0%       15.8%        4.3%

 Bruker                     $241,648           5,400       20.0%       18.7%       -1.1%

 Caliper Life Sciences      $256,049             469       17.0%        9.9%       -6.0%

 Dionex                     $270,714           1,550       10.7%        6.0%       -4.3%

 Eppendorf                  $256,360           2,622        4.8%        7.5%        2.6%

 FEI                        $354,710           1,788        1.2%       11.0%        9.6%

 FOSS                       $238,508           1,153        0.3%       15.1%       14.8%

 Harvard Bioscience         $278,095             389       11.8%       27.6%       14.2%

 Illumina                   $429,877           2,100       17.9%       35.5%       14.9%

 Luminex                    $272,750             519       18.8%       17.3%       -1.2%

 Oxford Instruments         $277,937           1,498        7.8%       22.9%       13.9%

 PerkinElmer                $274,895           6,200      -24.4%       10.0%       24.4%

 QIAGEN                     $303,159           3,587        2.6%       7.7%         4.9%

 Sequenom                   $200,249             237        1.3%      25.3%        23.8%

 Sigma-Aldrich              $287,833           7,890        1.9%       5.3%         3.3%

 Tecan                      $320,971           1,059       -5.6%       8.4%         4.4%

 Thermo Fisher Scientific   $290,019          37,200        5.1%       6.9%         1.7%

 Waters                     $304,328           5,400        3.8%       9.4%         5.3%