For senior executives, the Great Resignation is just getting started.
(Bloomberg) — For most workers, the so-called Great Resignation is over. For CEOs, it’s just ramping up.
More than 1,400 chief executives have left their positions so far this year through September, according to a report by executive coaching firm Challenger, Gray & Christmas Inc. That’s up almost 50% from the same period last year and the highest on record over that period since the firm began tracking in 2002.
The firm’s data includes CEO exits at US-based companies with at least 10 employees and at least two years in business, tallied from news reports, press releases and Securities and Exchange Commission filings.
Much has been written about how burnout surged during the pandemic as workers faced a series of stressors and uncertainties while navigating the global health crisis. Those feelings of exhaustion may now be catching up to executives, even as the overall quit rate in the US drifts back towards its pre-pandemic normal.
“Any CEO or chief HR officer in my world that I talk to says that the pandemic and responding to the pandemic was one of the — if not the most — stressful experiences of their working lives,” said Alexander Kirss, senior principal in the human resources practice at consulting firm Gartner Inc. “They not only had to navigate their organizations through the pandemic from a strategic perspective, but also from a human perspective.”
The government and nonprofit sector topped the list for CEO turnover, with more than 350 leaving their posts this year, up more than 85% over the same period last year. The technology sector saw the second-highest churn rate, with more than 140 CEOs abandoning the boardroom, up almost 50% from last year.
While the overall US workforce is shrinking as more baby boomers reach retirement age, that’s not the only reason behind the exodus, according to the report. About 22% of all CEO exits were retirements, down slightly from the 24% who retired last year.
While there was no reason given for almost a third of CEO departures, another 17% reportedly stepped down into other C-suite, board or advisory roles. Other reasons provided to Challenger include an interim period coming to an end or leaders choosing to pursue fresh opportunities.
Challenger attributes much of the churn to an economy in flux. “Companies are revving up for economic changes in the coming months. With the rise of labor costs and interest rates, companies are looking to new leaders,” Andrew Challenger, a senior vice president at the firm, said in the report.
Kirss isn’t surprised by the Challenger report’s outcome.
“Historically, we tend to see lower CEO turnover during moments of uncertainty. That was true during the Great Recession, it was also clearly true during the Covid-19 pandemic,” said Kirss. CEOs often stay put out of a sense of responsibility and, at the same time, boards of directors tend to prefer the stability of a steady hand on the wheel.
But the moment has changed, Kirss said. “Many observers, myself included, we’ve been expecting this post-pandemic uptick in CEO turnover, and it looks to have finally arrived.”
Turnover at the top might continue or even accelerate, Kirss said, now that we’re out of the pandemic and boards of directors are looking at CEO performance as businesses struggle to achieve profitability amid continuing inflation and economic uncertainty. To a certain degree, some of these choices may be contagious, he said: “CEOs and board directors are social creatures. They see increased turnover, particularly amongst their competitors, and they might feel pressure to consider a change of their own.”
(Updates with commentary from Gartner and methodology details in the third paragraph.)
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