Your C-Suite may be half empty soon if you aren't planning for the coming shortage of key executives
CALGARY--Canada's C-Suite is bracing for a mass exodus over the next five years and little has been done to fill the imminent void. As the country's top senior executives prepare for retirement, Canadian organizations are faced with a significant threat: a massive skills gap that has the potential to stifle innovation and productivity.
According to the second edition of the Odgers Berndtson Executive Outlook survey released today conducted by Leger Marketing, nearly half of all private and public sector organizations anticipate losing 20 per cent or more of their executive staff by 2017. This departure is further complicated by the reality that more than 90 per cent of respondents believe the next generation of managers is not ready to take over at the executive level.
Fifty-two per cent of those surveyed said their organization requires specific expertise that they do not currently have in their company staff. The most difficult qualities to find in new executive talent were emotional intelligence, people skills, and strategic thinking. Perhaps the most perplexing finding is that while senior executives are aware of the imminent skills gap, more than half admit to having no formal plan in place to address the anticipated shortage.
"Dynamic leadership at the top is the corner stone of an organization's ability to adapt to the complexities of the global market and ultimately to be its competitive best. The looming gap in leadership over the next five years poses significant challenges for organizations, especially for the public sector where the skills gap is more acute," said Kevin Gregor, Managing Partner, Odgers Berndtson. "However, the real concern from a performance and productivity standpoint is that, despite being aware of this inevitability, the majority of organizations are doing little to prepare for it."
When asked about the challenges of executive life, 83 per cent of senior executives said their jobs were more difficult today than they were two decades ago. Over half cited advances in technology as being the primary reason why it is more complex to be a senior executive today than it was 20 years ago.
"The information age has created an environment whereby accountability is unavoidable at the executive level" said Mr. Gregor. "There is no place for executives to hide anymore as information regarding performance can be readily accessed by competitors, superiors, and stakeholders. This high level of scrutiny is another area that up-and-coming managers must learn to cope with before entering the c-suite."
This lack of preparedness, coupled with the fact that a quarter of those surveyed believe that the next generation of leaders may need five or more years of mentoring to prepare to take over an executive role, has left many business leaders grappling with conventional solutions. These include recruiting from overseas and targeting executives at competitive firms. In fact, nearly one in five believe that their next executive hire will come from outside the US or Canada.
"Another more practical solution is to consider hiring an interim executive manager to help bridge the gap and overcome the skills shortage while the next generation gains the experience and skills needed to succeed," continued Mr. Gregor. "The demand for interim leaders, or super temps as some call them, has risen significantly in the last two or three years, and represents a major shift in the way companies think about their executive-level needs. In fact, this may be the bridge that will save many organizations in the long-term."
Seventy-two per cent of those surveyed said that they believed interim leadership would grow significantly over the next five years and over half suggested that they would consider hiring an interim executive to help bridge the impending skills gap. The results suggest that companies now view interim hiring as an effective short-term business solution that offers long-term gain.
•Over sixty per cent of senior executives are between the ages of 50 and 59
•Sixty per cent of respondents said that executive search firms were their primary source for recruiting new talent
•Nearly half of businesses have no plan to implement a succession strategy
•The top characteristic sought after in an interim executive is relationship building skills
•Fifty-seven per cent of respondents attributed the expected skills shortage to a lack of training and strong succession planning in their organizations
•Over half of business executives believe the talent shortage is driving up expectations for higher remuneration
The Leger Marketing survey was conducted online using a random sampling of 300 senior executives from Odgers Berndtson's network across the country. Respondents included senior people from the private, public and healthcare sectors. The study has a margin of error of +/- 5.66%, 19 times out of 20.