The tenure of its employees can say a lot about a business. For example, high turnover suggests poor culture or an environment that’s too demanding of its employees. Conversely, longstanding tenure and high retention rates signal that employees are happy, valued and content in their positions.
Tenure varies by position and, as a general rule of thumb, the higher you climb in a company, the longer the tenure of that position. An entry-level sales position might have an average tenure of one year, while the director of sales might be a position someone holds for an average of four years. It makes sense. Think about if those times were reversed! If your leadership has a shorter tenure than lower-level positions, you’ve got a real problem.
It brings about the question: how long is the average tenure for a member of the c-suite? It’s a fair question and one companies need to ask themselves as they begin the search to fill a vacant executive position. It sets the expectation for how long you can and should expect senior leadership to stick around.
Below are some important statistics, courtesy of a 2020 report by Korn Ferry on the average tenure of c-suite leadership across different positions and industries, from 1000 companies.
The average tenure of an executive is 4.9 years
For companies filling a vacant seat at their executive table, expect the ideal candidate to stick around for about five years. While this might sound short, there are several factors behind this figure and context for that length.
First, this is the aggregate average of all c-suite positions. Top company figureheads have tenures that skew higher—for example, 6.9 years for the CEO. Shorter executive tenures typically fall to positions in evolving fields. For example, the average tenure of a CMO is just 3.5 years, while CHRO positions last 3.7 years.
Second, there’s also a broad industry component to consider. C-suite members in the financial sector have a higher aggregate tenure across all positions (5.25 years) than those in the healthcare field (4.36 years). Depending on the industry, the length of an executive’s stay could be impacted by the nature of the business you’re in.
Finally, the age of executives factors into their tenure. Younger executives tend to hold positions for a shorter period of time—whether they’re poached by other companies or choose to pursue new opportunities earlier. Older individuals tend to retain their c-suite position longer.
The average age for a C-suite member is 56
Speaking of age, executives tend to be individuals with decades of industry experience behind them. Despite the Mark Zuckerbergs (36) and Evan Spiegels (30) of the world, most executives put in 25-35 years of middle-to-senior-level management before they make it to the executive table.
Again, the specific position matters when it comes to age. CEOs are often the oldest people at the table because they have the most years of experience. The average age of a CEO is 59 years old. CMOs trend younger (54), alongside CFOs (54), with CIOs (55) and CHROs (55) making up the middle ground. Again, age correlates to tenure—younger C-suite positions have a shorter average tenure than older ones.
Looking at age through an industry lens yields even more insight into the nature of c-suite employment. Again, financial executives trend older in aggregate (55.6 years old), with other sectors like consumer (54.6 years old) and tech (54.8 years old) skewing younger, largely based on the nature of the sector.
Trends in executive leadership
The Korn Ferry survey this data comes from was released in January 2020. Needless today, the world has changed significantly since then under the uncertainty of the coronavirus pandemic. Leadership positions have become even more valuable during this period of disruption, which could serve to skew these same numbers for years to come.
Interestingly enough, executive tenure headed into 2020 is actually down from years past. Korn Ferry conducted this same survey in 2016 with some different results:
- CEO average tenure was 8 years in 2016, down to 6.9 in 2020
- Executive tenures in financial services are down from 9.7 to 6.5 years (aggregate)
- Average CIO age has increased since 2016, showing resilience at this position
- CHRO positions have shortened considerably since 2016, down to 3.7 years from 5 years
There are several contributing factors to the above changes and changes we can expect to see in the years post-pandemic. For example, the United States economy saw a period of “unicorn IPOs” as companies like Uber, Lyft, Peloton, Beyond Meat, Zoom and Spotify went public and drew in tenured leadership teams. This isn’t likely to occur in 2021, which means we can expect to see average tenure across the c-suite increase as top talent stays put.
Also driving executive trends in 2021 and beyond is the prospect of a shifting workforce, due to the pandemic. Remote work is on the rise, which has forced companies to pivot everything from operational strategy to growth planning. Leadership is vital in navigating these challenges. Smart companies will work hard to retain leadership through the turbulence, which will drive up the average tenure of executive leaders.
Now’s the time to attract and retain leadership
Organizational success doesn’t just step from having top-level leadership—it depends on retaining it. As companies gear up for a new future post-pandemic, it’s worth understanding the expectations for how long your leaders will stick around. This sets the expectation for how to find and place them, and what’s necessary to retain them.
Whether you promote from within, poach from a competitor or use an executive placement firm, it’s vital to find, vet, install and enable top-level leadership. Based on industry figures, these individuals need to accomplish a lot in a short amount of time before they’re on to the next board room. Getting them to stay longer and become a fixture in your highest-level leadership positions means making a good hire and creating an environment where they can reach their highest potential.