C-Suite Shake-Up: Navigating the Turbulence of Executive Turnover in 2024 (2024)

Turnover in the executive suite hit a historic and unprecedented level last year, meaning it is well past time for Boards, Chief People Officers, and HR leaders to be readily prepared with executive search resources and strategies.

"Human Resources Director" reported that the first three quarters of 2023 witnessed nearly 1,500 CEOs vacating their positions. The third quarter marked the pinnacle of this exodus, setting a record for the highest-ever quarterly departure levels in the US.

Why the Churn?

Reasons cited behind this shift encompass retirement, internal transitions, and major global and economic disruptions. Statistics reveal that 50-70% of executives fail within the initial 18 months of their promotion to an executive role. Within this group, about 3% "fail spectacularly," while almost 50% "quietly struggle." Additionally, 55% indicated having minimal ongoing coaching and feedback in their roles.

A report from AlixPartners reveals that nearly 60% of CEOs worldwide fear losing their jobs. The anxieties stem from major disruptions, including interest rates, inflation, geopolitical tensions, climate change, and relentless technological disruptions. A noteworthy trend contributing to the timing of executive departures is the spike observed during bonus season since 2022, aligning with the era of the so-called Great Resignation. Many executives, discontent or restless, strategically time their departure to coincide with the receipt of their bonus payout.

How to Stabilize Amidst These Shifts

With the rise in top executive departures, the stability of leadership has become a paramount concern. Organizations must focus on cultivating a resilient leadership pipeline and ensuring smooth transitions to maintain continuity and instill confidence among stakeholders.

Early and strategic engagement with Executive Search is essential in securing the best long-term fit, and not a near-term flip. Strategic search is a firm commitment to building a resilient, sustainable business. Securing the very best CEO or executive in a highly competitive market takes time; and while time-intensive, ensures a cultural fit and smoother change management process.

Roadmap for Search Engagement

To initiate a successful engagement with an Executive Search partner, be prepared to collaborate on the following:

1. Define Your Criteria: Clearly outline the qualifications, skills, and attributes you are looking for in a CEO. Consider both technical skills and leadership qualities that align with your company's values and goals.
2. Select a Search Partner with Expertise in Your Field: Partnering with an experienced executive search firm can provide access to a broader pool of qualified candidates and expertise in the executive recruitment process. Look for firms with a successful track record in placing CEOs.
3. Build a Strong Search Committee: Assemble a diverse and knowledgeable search committee that represents various perspectives within the organization. This ensures a more comprehensive evaluation of candidates and helps prevent biases.
4. Develop a Comprehensive Job Description: Craft a detailed and compelling job description that outlines the responsibilities, expectations, and qualifications for the CEO role. This will attract candidates who are the best fit for your organization.
5. Confidentiality is Key: Maintain confidentiality throughout the search process to protect both the candidates and your organization. This is particularly important when considering internal candidates and avoiding potential disruptions.
6. Evaluate Cultural Fit: Assess how well candidates align with your company's culture and values. A CEO who shares the organization's ethos is more likely to drive positive change and foster a cohesive work environment.
7. Thorough Interview Process: Conduct a rigorous interview process that involves multiple stages, including interviews with key stakeholders, board members, and team members. This ensures a well-rounded evaluation of each candidate.
8. Assess Track Record and References: Scrutinize the candidate's track record and accomplishments. Verify references thoroughly, and consider speaking to individuals who have worked closely with the candidate in the past.
9. Compensation Package: Develop a competitive and attractive compensation package that aligns with industry standards and reflects the significance of the CEO role. This includes salary, benefits, and performance incentives.
10. Timeline and Communication: Clearly communicate the timeline for the search process to candidates, keeping them informed at each stage. Transparency helps build trust and maintain a positive candidate experience.

Change in leadership is, in this environment, a natural course of business. With preparation, partnership, and a strategic mindset, even top leadership transitions can be effectively managed through engagement with Executive Search.