In 2021, 47.8 million workers quit their jobs. According to data compiled by the Society for Human Resource Management, monthly resignations topped an average of 4 million: the highest ever recorded. More astoundingly—and perhaps more worryingly—that figure is set to rise in 2022. 4.53 million workers quit their jobs in March 2022, setting a new resignation record, according to the Bureau of Labor Statistics’ monthly Job Openings and Labor Turnover Survey (JOLTS).
The Great Resignation has been alarming for many reasons, not least of all the labor shortage that it’s created across virtually every industry and sector. However, one of the more underappreciated challenges that’s arisen comes from higher up the ladder. While most think about the labor shortage from an entry- or mid-level standpoint employee, executive turnover has also risen substantially.
Where have all the leaders gone? More importantly, what’s driving them to jump ship or leave the C-suite? These are questions more and more companies are beginning to ask themselves as they seek to fill vacant positions that their own executive table.
C-suite turnover remains high into 2022
The Great Resignation officially began in 2020, amidst the COVID-19 pandemic. However, the full effect of these quits wasn’t realized until the world started to go back to work the following year. By mid-2021, many companies began to realize the lack of talent returning to the workplace—including executives who chose not to return, or who actively gave notice.
“In the last half of 2020, CEO succession activity picked up significantly,” according to a report by data analytics firm ESGAUGE. The report looked exclusively at succession rates for CEOs among Russell 3000 companies, breaking down turnover through numerous lenses, including industry, age, reason for leaving, and more. Turnover activity continued into 2021, reaching record-breaking levels as much as 22% higher than previous surges in new CEO appointments.
Now, in 2022, analysts expect the trend to continue. Moreover, it’s expected to extend beyond CEOs, to reach virtually every position in the C-suite, and to include executives at much larger companies. The question remains: why? What’s driving leaders out of top positions?
A menagerie of difficulties
To understand why executives are leaving, it’s first important to distinguish between planned and unplanned departures.
- Planned departures may be unforeseen, but they generally allot time for succession planning. For example, a CEO may give notice before leaving their position.
- Unplanned departures are abrupt, with no time for succession planning. For example, an executive may be fired for misconduct and released immediately.
According to compiled reports, both planned and unplanned departures are up over the past 24 months. The ESGAUGE report mentioned above cites “personal misconduct” as the most common cause of unplanned departures, with health and medical related concerns comprising a small fraction of unplanned turnover.
Planned departures illuminate the cruxes of the Great Resignation much better. Here’s a look at the most common contributors to C-suite turnover, according to ESGAUGE:
- Caused by the stress of the COVID-19 pandemic and its aftermath;
- Retirement. The average age of a departing CEO in 2021 was 61 years old;
- The need or want to deprioritize career to create work-life balance;
- Executives retiring at the height of achievement, before downturn.
Of these catalysts, burnout is far and away the most prevalent. A MetLife leadership survey published in September 2021 found that 42% of managers in the 26-to-40-year-old age bracket reported experiencing burnout: the highest among age cohorts surveyed. While not representative of the C-suite, it’s indicative of the stress put on leaders from 2020-2022, as they navigate a pandemic and its rippling aftershocks.
Will the leadership market find its footing?
Resignations continue to surge in 2022, and the labor shortage is growing. The question is, will this trend continue within the C-suite? That remains to be seen; however, companies don’t need to wait for a scenario to play out. There are defensive options: opportunities for establishing and maintaining high-level leadership even amidst the Great Resignation.
Working with an executive recruiter to find and place C-suite talent is a great way to identify company stewards for any executive-level vacancies. This can include long-term executive placement, interim placements for unplanned departures, or even fractional executives. Executive placement allows companies to focus on managing operational or financial challenges present in the current market, while interviewing top-level candidates suitable for C-suite positions.
Ultimately, companies can’t wait for the Great Resignation to taper off. C-suite success in challenging job markets requires aggressive pursuit of top-level candidates. Executives may be leaving their positions in 2022; however, they’re paving the way for new leaders and new opportunities. Fortune favors companies that recognize the importance of finding and establishing capable leadership during this tumultuous time.