Surviving the Coming Executive Job Churn (
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The wave of retirement by the Baby Boom generation is expected to have a large impact on executive-level jobs of all kinds, finds a recent survey.The
here-today, gone-tomorrow climate of CEO changeovers has almost become
routine in the past few years, and executive outplacement firms track the
numbers as closely as bookies at a racetrack. But in a recent survey, one firm
has discovered that it’s not just the top spot that’s seeing a dramatic
turnover, but the entire executive suite.
IMD
International Search Group asked its 24 offices, in multiple countries as well
as the U.S., to identify the top 100 most
important companies in their area. Although many were chosen because of their
large size, others were seen as significant because of their market clout or
innovative strategies. The top executive in human resources at each firm
completed the survey, covering company trends for the past three years.
The
survey was undertaken to determine client needs and get a sense of the impact
of Baby Boomer retirements, notes Thomas Fuller, general managing partner at
IMD. Although much business discussion has been sparked by the advancing age of
upper-level management, Fuller believes that a surprising number of
organizations will be affected more than they realize.
“A lot of
people have their head in the sand,” he says. “The numbers don’t lie. In the U.S. alone, there will be a shortfall
of 33 million workers. That means 50 percent fewer people in the workforce.”
The Baby
Boomer generation dominates executive offices, with more than two-thirds
representation, IMD notes, although on a hopeful note, the firm did point out
that 32 percent of the executive committee members are from younger age groups, commonly referred to as Gen X and Gen Y.
One of
the most striking aspects of the survey is the lack of comprehensive succession
planning at many companies, he adds. More than 70 percent of respondents noted
that there is no successor identified for the top three spots in their
organizations.
“So, you have seven out of 10 CEOs sitting in offices without a
successor waiting in case anything should happen,” notes Fuller. “Given the
pace of CEO change, that doesn’t seem to be
the best strategy.”
IMD
points out that there was record-setting C-level turnover in 2006, which
continued into 2007. And, in the first quarter of 2008, those surveyed reported
55 percent turnover of CEOs, 11 percent for CFOs and 10 percent for other
C-level managers.
According
to the survey, primary factors for high executive churn include corporate
performance, increasing market instability, the rising complexities of business, and growing domestic and international competition.
