Challenger CEO Report: CEO Exits Down Over 2020 as Leaders Contend with Labor Shortage
PUBLISHED October 13, 2021
U.S.-based companies announced 103 CEO changes in September, down 13% from the 118 exits in August, and 13% lower than the 119 CEOs who left their posts in September 2020, according to a report by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
“Nearly 3% of the labor force quit their positions in August. Senior leaders are contending with incredible talent management issues right now, as workers leave in droves and companies deal with the brain drain that comes with an exodus of talent,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Indeed, the latest data from the Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics showed the quits rate at a record high of 2.9%.
“Senior leaders are also susceptible to the poaching that’s occurring at companies across the country as they battle for talent,” he added.
So far this year, 991 chief executives have left their posts, down 2.5% from the 1,016 CEOs who left their posts through September last year.
In the third quarter, 348 CEOs left their posts, up 3.6% from the 336 who left their posts last quarter and down 1% from the 353 who did so in the same quarter last year. It is the highest quarterly total since Q3 2020.
Women Fill CEO Role At Highest Rate on Record
The rate of new CEOs who are women continues its upward trend. Nearly 27% (26.9%) of new CEOs are women, compared to 24.9% in August, 22% in 2019 and 15% in 2014. Just 12% of new CEOs were women in 2010, when Challenger began tracking gender.
Industries with the Highest Exit Numbers
CEO turnover is led by Government/Non-Profit entities, which include charities, foundations, school systems, transportation authorities, and other government-funded entities. This sector announced 31 CEO changes in September for a total of 281 this year.
Technology announced the second most CEO exits in September with 17, for a total of 123. Another 11 CEOs left Hospitals for a total of 79, exactly as many who left Hospitals through this point last year. Eight CEOs left Financial firms last month, for a total of 64.
CEOs Moving into new roles, new companies
Amid a labor shortage causing talent to leave companies or get poached for better opportunities, 122 CEOs have left for new roles in completely different companies or in different companies within the hierarchy of their current organizations this year. This is compared to 85 CEOs who similarly found new roles through the same period in 2020.
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