Canadian employment activity in June was essentially a wash –with small gains in service sectors being neutralized by similar losses in manufacturing and construction jobs. While there were fewer jobs created in June than forecasted, the unemployment rate held at below 7%. We can only hope that Canada will benefit from the increased activity in the USA in coming months.
South of the border we saw a significant increase in jobs created – in fact - the largest increase in 9 months and the unemployment rate remained below 5%. The most significant job gains were realized in leisure and hospitality, healthcare/social assistance and financial areas. IT, retail, professional and business services saw continued growth in numbers with other sectors including construction, manufacturing, wholesale trade, logistics and government holding steady. Mining however continues to see declines.
In looking at existing jobs, a recent workplace trends report indicates that a key concern of businesses is the continuing increase in employee turnover rates. Over 40% of companies polled indicated that their turnover rate spiked significantly in the past year. Survey respondents cited employees being recruited by their competitors as the primary cause and better compensation being the primary catalyst behind the moves - not surprising as wages have remained fairly stagnant over the past decade. The prevailing thinking is that improving your income requires that you change companies - a notion that is supported by a recent global survey by Glassdoor that showed over half (56%) of global employees feel that they must change companies in order to see a meaningful improvement in their compensation.
Refilling these jobs has proven to become more challenging with survey respondents indicating that it is taking longer to find qualified replacements especially in information technology workers, executive talent & leadership, sales & marketing professionals, engineering workers, and manufacturing & logistics staff.
On the executive level, June 2016 C-suite turnover increased in all 4 categories over what we saw in June 2015. CEO turnover, year over year, increased by +8%, CFO changes increased by +11% and overall C-Suite changes increased by +14%. As well, Board of Director changes increased by 9% over June 2015.
Month over month changes, June 2016 versus May 2016, were healthier still and we again saw increases across the board. CEO changes realized a +12% increase, CFO changes, for a fourth consecutive month, saw another dramatic increase of +22%, overall C-level changes increased +18% and Board changes increased by +11%.
June 2016 C Suite turnover activities break down as follows::
- CEO changes, +8%. A total of 211 changes with the largest number of changes occurring in the banking, professional/business services and healthcare sectors. Last month's changes occurred primarily in the healthcare, drugs/biotech and business services sectors.
- CFO changes, +11%. A total of 239 changes with the largest number of changes primarily occurring in drugs/biotech, banking, manufacturing and energy sectors. Last month's changes occurred primarily in banking, drugs/biotech construction and energy sectors.
- Board of Directors, +9. A total of 985 changes with the largest number of changes occurring in the energy, metals/mining, drugs/biotech and retail sectors. Last month saw changes primarily in metals/mining, energy and banking sectors.
- Overall C suite, +14%. A total of 2382 changes with the largest number of changes occurring in healthcare, banking, professional/business services and minerals/mining sectors. Last month's changes were realized primarily in the business services, manufacturing, banking and energy sectors.
CEO turnover reached a record high in 2015 and the momentum seems to be continuing. It was reported that last year, 17% of the globe’s largest public companies saw their CEO’s depart – the highest number in some 15 years. The consultancy firm Strategy&, has been studying CEO turnover activity at the 2,500 largest public companies around the world. The data revealed that the rate of change in Chief Executive Officer positions over the past 15 years has consistently hovered between 9.8% (2003) to 15.4% (2005). Last year saw a spike in the trend, as CEO turnover reached its highest points since the study’s inception. In 2015 16.6% of CEOs turned over with 10.9% of these being planned, with successors identified. In 3% of the (known) cases, CEOs were for one reason or another forced to leave their organization. CEO turnover on the back of M&A restructuring, which in most cases results in an inevitable forced departure, had a renewal rate of 2.8%.
Some interesting stats that came out of the research:
- Just 2.8% of the CEO’s replaced in 2015 were succeeded by women – with Canada and the US showing the poorest numbers.
- Popularity of female CEO successors varies significantly across sectors with consumer goods and telecom having the highest numbers.
- Female CEO’s are more frequently hired from outside the company than promoted from within – an indication that companies are not developing their in-house female executives sufficiently.
- Healthcare, an industry with one of the largest shares of female participation, finds itself in the lowest ranks.
- More, large enterprises, are deliberately going outside of their company in choosing a new CEO and the incidence of hiring from outside their industry is also growing.