Key Executive Turnover Rate Increasing in 2018 & How Your Company Should Prepare

Research shows that within the first 18 months of hire there’s a 50% chance a new executive will leave the organization. Employee turnover at all levels is a natural part of business. However when an executive leaves, organizations can experience more sensitivity. New challenges such as rumors, suspicion, loss of direction, etc. may arise and you should try to be proactive in preparing for them.

4 Ways to Prepare For Executive Turnover

1. Be diligent in creating a succession plan

If you operate under the premise that your C-suite executives can leave the company at any time, you will be much better prepared when it does happen. Take a close look at the other employees in your organization and identify those with potential to grow into a new leadership position. Does their work ethic surpass that of the average employee? Have they expressed interest in tackling new challenges? Have their annual reviews proved they may be ready for the C-suite?

Remember that it’s much easier to hire or promote from within your organization than outside. This gives you the unique opportunity to groom your executive’s successor to fit the position. It also helps mitigate against the risk that comes with filling an open position. Finding quality C-suite executives who have the perfect experience and culture fit can be time-consuming, especially without the help of a recruiter.

Make time to put a succession plan in place as it can save you and your employees the anxiety that follows with having an unfamiliar face in the executive suite. Handling replacements as demand arises is not the most efficient strategy.

     2. Have a communication plan in place

When executives leave it can sound off a silent alarm. Employees, investors and the public in general will undoubtedly watch your company’s next move very closely so it’s essential that company leaders are prepared to direct the conversation.

What’s most important during an executive transition is reassurance. Unexpected leadership changes can cause employees to wonder about their future and investors to become anxious about the company’s health. If you have already selected a successor, you should communicate that information within a reasonable time period. If you haven’t, you should focus on other positive aspects they will appreciate, i.e. no major process or policy changes will be made during the transition. Regardless of how you approach the discussion you should always lead it. Develop a communication plan to use throughout the entire transition and follow it.

     3. Establish a culture with a strong leadership foundation.

Having employees undergo regular leadership development is a smart business decision. Change is inevitable and having a workforce who is ready to lead regardless of position, will help during an executive transition. Good leaders are trained to adapt to change both expected and unexpected, without losing sight of the company mission. If you build a strong leadership foundation into the company culture then executive turnover is less likely to cause chaos.

     4. Encourage healthy working relationships among the executives and their colleagues

Losing an employee in a key position can be a challenge, but losing one who did not have any strong and open relationships with others in the company is worse. If she has a good working relationship with other members of the team, it ensures that the executive’s way of conducting business, strategy & vision are not all lost once she leaves.

Encourage your executives to build positive relationships with others in the company. They can have monthly one-on-one meetings with direct reports. Participating in team-building events is also a good idea.

Are You Prepared To Lose a Key Executive?

With 2018 bringing some of the highest levels of CEO turnover rates within the last 8 years, you should take time to review how prepared your company would be if one of your executives leaves tomorrow. Consider which areas could use some improvement, and implement at least one suggestion. Knowing you have a legitimate plan in place for any executive turnover will give you peace of mind and protect your organization.

To find out how Norstrem & Associates can help your company prepare for executive turnover drop me a note.