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CEO Departures Decline in November, but Executive-Search Market Stays Strong

By Theresa Minton-Eversole  12/13/2013
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After four consecutive months in which more than 100 of the nation’s chief executive officers (CEOs) left their position every 30 days, the pace of turnover slowed somewhat in November, according to a report released Dec. 11, 2013, by global outplacement consultancy Challenger, Gray & Christmas Inc.

Ninety-four CEOs announced their exit in November—9.6 percent fewer than the 104 who left their post in October and a 16.1 percent decrease from the same month a year ago.  

Challenger has tracked 1,147 CEO changes so far this year, 3.2 percent more than the 1,111 departures that were announced in the first 11 months of 2012.

Due to continued changes in the health care landscape, this sector led all industries in CEO departures in November, with 23, 15 of which occurred within hospitals and hospital systems.  To date, the health care sector has seen 247 CEO changes, which is the highest turnover among all sectors tracked by Challenger.

The government and nonprofit sectors have seen just 165 CEO changes in 2013, including 14 in November. Meanwhile, companies within the consumer products, entertainment/leisure, financial and industrial manufacturing industries each saw six CEOs leave their posts in November. The financial industry has had 135 chief executive departures this year.

“Areas in which consumers dictate financial health will undoubtedly undergo changes as the economy recovers,” said Challenger, Gray CEO John A. Challenger.

Executive Search Activity Remains Robust

Meanwhile, third-quarter 2013 data released Nov. 19 by the Association of Executive Search Consultants (AESC) shows a global increase in the value of senior-executive-search assignments. The average fee per executive-search assignment increased 4.4 percent quarter on quarter and 6.4 percent year on year in the third quarter of 2013. In contrast, the number of new executive searches declined 6.6 percent quarter on quarter and 11.2 percent year on year.

The AESC study also measured the number of new search mandates by region and industry, finding blanket declines in new search activity in the third quarter of 2013 for all major regions and industries. The regional outlook revealed that Central/South America witnessed the greatest drop in searches, followed by North America; Europe, the Middle East and Africa (EMEA); and Asia Pacific.

The third-quarter market share outlook revealed that financial services and consumer products both held small year-on-year increases in market share. Life sciences/health care saw no change in its market position, while the industrial and technology sectors witnessed a minor drop, accounting for shares given over to the growth in financial services and consumer products’ new-search starts.

“The third-quarter results, building on the trends of the last year or more, very clearly reflect client demand that is focused on higher-level, quality searches, as opposed to the volume associated with more middle to senior recruiting,” said AESC President Peter Felix, in a Nov. 19 press statement. “This trend is substantiated by recent survey work of the AESC amongst the client community, which indicates that retained executive search is actively competed against in the middle- to senior-management levels by other recruiting methods but is relatively free of competition where searches are at the top level, more complex, confidential, international in scope and highly sensitive to public scrutiny. Given that the world economy is slowly reawakening and the talent shortage is still severe in many markets, we believe that this bodes well for the profession as a whole.”

Theresa Minton-Eversole is an online editor/manager for SHRM.

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