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Right now, the CEO turnover rate for businesses is higher than it’s ever been. According to a 2002 study by Business+Strategy, between 1995 and 2001, the CEO turnover rate spiked 53 percent.
In 2011, 49 companies out of Standard & Poor’s 500 Index had replaced CEOs in the past year alone. And by 2013, this rate had crept even higher.
As of late, it seems companies have been swapping CEOs the way children swap pudding cups. The attitude is akin to, “Mmm, I’ve stuck with this flavor a while, but I’m ready to try something new.”
And for many women looking to climb the corporate ladder, this apparent threat to job security comes as a shock. But there’s no need to dismount from the ladder yet, ladies. Here’s why you can turn these odds over in your favor.
The first tremor shaking CEOs out of their spots is the digital revolution in today’s culture. Many CEOs are children on the 1960s who rarely have an understanding of the developed world’s new digital trend.
“CEOs who aren’t comfortable around technology and digital trends will have difficulty setting strategy for the future,” Dawn Lepore, former CEO of Drugstore.com Inc. and former CIO of Charles Schwab Co. tells Bloomberg.
Older CEOs don’t know how to take their businesses to this next digital level, so they get dropped.
And naturally, since companies are looking for CEOs savvy behind the scenes, the trend has been towards younger CEOs. According to the National Bureau of Economic Research, the average age of a CEO in 1980 was 59. By 2001, this number was 52.
Additionally, the founders of today’s leading businesses are remarkably young. Tumblr founder and CEO David Karp founded the company when he was 20 years old and is now 30. Mark Zuckerberg founded Facebook in his dorm room and today is still a fresh faced 32-years-old.
But it isn’t just an understanding of kids these days that sends old businesses kicking older CEOs to the curb. No, it’s actually through millennials and social media that such change is occurring in the CEO world. How does social media have such power? Online activism.
It’s no secret that social media has mobilized millions of teenagers and young adults in ways never seen before. Trending hashtags and shareable information have allowed young people to simultaneously voice their opinions and inspire change.
Through the Internet, teens on Twitter, Tumblr and Facebook have voiced outrage over the actions of billion dollar companies like Urban Outfitters, Abercrombie & Fitch and American Apparel. These businesses have consequently affected change in the form of new CEO leadership.
This demand for a corporation’s social responsibility is higher than ever and it’s resulted in a CEO turnover rate to match.
But there’s one last factor that’s sending older CEOs into earlier retirements: convenience.
“The record stock market in the U.S. also makes it a very lucrative time for an executive to retire,” Bloomberg reports of John Wood, vice chairman at executive recruiter Heidrick & Struggles in New York.
A healthy stock market makes for a cushy CEO retirement as the majority of their payout comes from shares they’ve accumulated over the course of their career. If the stock market is looking nice, the time to retire is looking nice, too.
So, it’s looking like CEOs are getting younger, more Internet savvy, more socially responsible and are finding better times to retire. And odds are if you’re on this website—you’re all of the above! As a woman of ENTITY you care about the world around you and about reaching your goals in life. So forget the gloom and doom Bloomberg might forecast. Your future as CEO can be as bright as you are.
