Canadian employment numbers held steady in April with the unemployment rate continuing to hover around 7%. Declines in manufacturing, business, construction, natural resources and agriculture were offset by gains in wholesale and retail trade as well as hospitality and food services.
The USA saw 160,000 jobs created in April, and while that number is down from the previous months, the unemployment rate held firm at around 5%. The largest job gains were realized in professional & business services, healthcare and financial services with mining continuing to see the most significant losses.
A recent PWC study revealed that in 2015, 17% of the largest 2500 public companies in the world changed their CEO - more than in any of the previous 16 years. The trend over the past several years has been that more, large enterprises have been deliberatively choosing their new CEO’s from outside the company as part of a planned succession, indicating that hiring an outsider has become more of an international leadership choice than a last resort. Boards have come to recognize that while an internal candidate may have been instrumental in achieving the business goals of the past, they may lack the skills needed for the company to be successful in the future. Sadly, with all of the CEO changes in 2015, the level of incoming women CEO’s fell to below 3% - with the USA and Canada recording the poorest numbers in this regard.
Including April’s executive turnover numbers noted below, to date in 2016 we have seen 998 CEO’s, 963 CFO’s, 6131 overall C-Suite and 1638 Board Members turnover. That’s a really healthy level of activity! The overall C-Suite numbers are a ripple effect of the number of CEO’s that have moved on. A Recent study conducted by a group of researchers from Stanford and Chicago’s Graduate School of business indicated that nearly 15% of top managers leave with the departure of the CEO, and that number doubles when a new CEO is brought in from outside of the company. Their study showed that senior management turnover is closely linked to how long the CEO and top executives have worked together. For example, a top manager that has not been with the company for an extended period of time, is less likely to leave when the CEO departs. This is a strong indicator that relationships – not corporate Boards, strategy changes, or losing out on the promotion – drive turnover. The researchers discovered that what really impacts on turnover is how much a top executive and the CEO have invested in their relationship. When that relationship is deep, they typically share jargon, vision and thinking – a deep understanding of each other – that makes overcoming crises and decision making easier and quicker. With the departure of the CEO, the remaining executive(s) move from working very well with the prior CEO to having little knowledge of how the incoming CEO operates – generally rendering them less effective – hence the escalated turnover.
On the executive level, April 2016 C-suite turnover increased somewhat in 3 out of 4 categories over what we saw in April 2015. CEO turnover, year over year, increased by +7%, CFO changes increased by +4% and overall C-Suite changes increased by +11%. Board changes realized a small decline over last year, coming in at -3%. Month over month changes April 2016 versus March 2016 saw increases across the board. CEO changes realized a +16% increase, CFO changes, as was the case last month, saw a another dramatic increase of +27%, overall C-level changes increased +13% and Board changes increased by +2%.
April 2016 C Suite turnover activities break down as follows::