Companies Face Higher Turnover Among Top Managers
It may be lonely at the top, but don't worry -- you probably won't be there very long, new research shows.
Pressure from overseas competitors, coupled with greater investor scrutiny and a demand for transparency at home, has raised executive job turnover to its highest level in more than five years, according to Liberum Research, a New York-based firm that tracks the upper-management job market.
In September alone, 2,048 executives were replaced at companies nationwide, nearly 100 more than in July, the firm reported last week.
Last month's totals included 222 CEOs and 179 CFOs -- so-called C-suite jobs that were once considered among the most secure, the firm said.
More than 225 of those job changes occurred at smaller businesses with market capitalizations below $1 billion, said Liberum spokesman Richard Jacovitz. By industry, the highest turnover rates came from drug and biotech firms, which tend to include many small or midsize product developers.
Across all industries, the turnover rates for executive jobs have been steadily climbing in recent years, Jacovitz said, driven primarily by a stricter regulatory environment created in the wake of Enron (NYSE:ENE), WorldCom (NASDAQ:WCOME), and other corporate scandals.
"Beyond that, business itself has become for more complex in the last five years, and there's now greater pressure on top-level executives," he said.
At public companies, this is reflected in the rise of activist shareholders, Jacovitz said, seen most recently in the public ousting of top executives at Hewlett-Packard.
Yet, managers at small private businesses are also feeling increased heat to achieve immediate results, he said.
"Everybody's also looking at the short-term these days," he said.
Meanwhile at the lower rungs of the workforce, small employers are having trouble finding qualified workers, according to the National Federation of Independent Business, a Washington-based lobby group with over 600,000 members.
Of more than 150,000 small businesses polled in September, more than 55 percent said they hired or tried to hire at least one new worker, the group reported on Monday. Of those, a full 80 percent said they found few or no qualified applicants, the group said.
"The availability of qualified applicants is on the rise again as the number one problem facing small-business owners," William Dunkelberg, the group's chief economist, said in a statement.