A troubling new report from ExecuNet says executive longevity continues to decline at just the time companies most need an engaged, knowledgeable C-suite at the helm.
The survey of some 5,000 executives, search consultants, and corporate HR professionals says the average tenure of a business executive declined 15 percent between 2005 and 2008 to an average of 2.3 years. Meanwhile, only 29 percent of the HR professionals surveyed say their company has knowledge management and succession plans to address the loss of management skill.
“It takes roughly three years of deep entrenchment in a job to reach peak performance. With executives spending less time in organizations and often being judged on short-term stock price performance, they stop short of reaching their full potential,” says ExecuNet Vice President and Executive Editor Lauryn Franzoni.
While the economy may have tamped down the voluntary turnover rate for 2009 — executive recruiters expect their searches to be down 14 percent for the first half of the year — it has also increased the length of time executives spend searching for a job. The report says executives now expect to spend an average of 10.1 months looking before landing.
So if they’re anywhere close to the industry average, executives are spending about a third of the time they’re with a company searching for a new company to join.
The executive summary of the report itself doesn’t speak to that situation, though it does show that 73 percent of the executives are finding networking the most effective way of finding their next job. For another 10 percent, responding to job postings produced results, though the report suggests that fewer and fewer of these executive-level jobs find their way online.
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“The sheer volume of résumés -– both qualified and unqualified –- that recruiters get from public postings, particularly as more candidates compete for fewer jobs, is staggering, and they find it prohibitive to post those jobs out in the open,” says ExecuNet President and Chief Economist Mark Anderson. “Recruiters tell us they don’t want cold calls or emails; they want someone to refer you to them.”
While recruiters can be choosier than ever right now, they expect to see an executive hiring boomlet in the second half of the year — big enough that they expect searches to be down only 4 percent for all of 2009. That prediction is consistent with what happened in the search industry in 2003, at the end of that recession. The optimism is also reflected in the latest ExecuNet’s Recruiter Confidence Index. In decline since the beginning of 2007, the index rebounded from a low of 26 percent to 38 percent between February and March.
“We’ve been tracking their confidence level since the last recession, and their confidence has always been a leading indicator of the economy and executive employment,” Anderson explains. “During the last recession, we saw recruiter confidence quickly strengthen six months ahead of the recovery.”