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By Aman Kidwai
Workplaces Editor
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Under particularly trying times, still in the aftermath of a public health crisis and ongoing sociopolitical challenges, chief executive turnover is rising and evidence suggests CEO and C-suite turnover will rise in 2025. Researchers and consultants told Newsweek that rising executive turnover presents financial, operational and strategic risks.
"This is a wake-up call for CEOs and CHROs," Alex Kirss, senior research principal at Gartner, told Newsweek. His company's recent research found that 27 percent of C-suite leaders in a survey said they're likely or extremely likely to leave within six months, and 56 percent expressed the same sentiment on a two-year timeline.
"This is a very high level of anticipated turnover, and we do predict that this will lead to actual turnover," Kirss added. Gartner's research also found that 67 percent of executives say they're being asked to do more in their role. HR consultancy Challenger, Gray & Christmas found that the three biggest months for CEO exits since 2020 were in 2024.
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"We're not seeing low CXO performance as driving this turnover," Kirss continued. "It's more about the push factors due to executive dissatisfaction regarding well-being, level of work and also the recruitment of executives from outside the organization."
Experts say this is a call to action for investments and improvements in succession planning. They also recommend better support for senior leaders, including making sure functional leadership teams are strong and that they have healthy relationships with the CEO, board and peer executives.
Deb Rubin, head of board, CEO and teams at RHR International, a leadership consulting firm, said in an email with Newsweek to "double down on succession planning for the CEO and C-suite roles. This should be an evergreen process."
While the events of the last five years have undoubtedly added to the complications business leaders are facing today, they're also tasked with digital transformation, the future of AI, a labor market globalizing quickly and the continuously changing wants and needs of the people on their teams.
"The complexity of the challenges facing CEOs and the C-suite are increasing—along with the pace at which they emerge—leading to significantly more wear and tear on individual leaders," Rubin said. "Given the landscape, turnover among senior executives is not likely to decrease in the near future."
Emphasize Succession Planning
Executive tenures were getting shorter for years before the pandemic, James Reda, national managing director at Gallagher, an executive compensation firm, told Newsweek.
During the pandemic, Reda observed a slight dip in turnover activity at the most senior positions after 2020, but now, "it's back to the races again, and we're seeing a reduction in the tenure and an increase in the failure rate."
The average tenure of executives varies by function; in the Fortune 500, it ranges from around three to six years in the C-suite and seven years for CEOs, according to executive search firm Spencer Stuart.
Reda added that an unplanned executive search is likely to be more expensive than a planned one, and that an executive seat that has seen a lot of recent turnover will also be costlier to fill, because the perception from candidates will be that the position is one of high risk given the shorter tenures of the predecessors.
To further highlight the value of succession planning, Reda and conventional business wisdom say that an external candidate is typically costlier than an internal one.
Rusty O'Kelley, managing director, board and CEO advisory partners, at Russell Reynolds Associates, a leadership consulting and search firm, told Newsweek that the major institutional investors have "started focusing a lot more attention [on succession planning] because there was a spike in turnover after 2022," and "an unplanned CEO succession is a significant opportunity for value destruction."
Russell Reynolds Associates' recent research found that CEO turnover at larger companies spiked in 2024 to all-time highs, and internal CEO appointments were higher than the ongoing six-year average, at 73 percent.
With rising executive turnover expected, boards and CEOs need to play a sincere role in developing the leadership bench.
"The kiss of death in C-suite succession planning is when it's delegated down to the C-suite leaders as a compliance exercise. It must be taken seriously at the top of the organization, not just as a risk to be managed, but an opportunity to drive organizational performance," Kirss said.
While CEO and C-suite roles are bound to different levels of accountability, with the CEO reporting to a board of directors at public and other large companies in most governance models, the succession planning for both can be part of one effort to develop leaders for the future, O'Kelley suggests.
"Frame it as executive development and building a strong C-suite," he said. "If you frame your succession discussions as long-term executive development, you look at it five-plus years out, the magic that occurs is that you can move people in multiple roles to make them strong, horizontal leaders and give them different experiences so they become more well-rounded to take on the CEO role."
Kirss encouraged thinking about the C-suite as a team, where fit and adding complementary skills matter more than finding the best available résumé at that position.
"There are implications of that composition-based approach for how you think about what makes a good executive in your search," he said. "It's not just going to be who's the best individual performer, it's going to be who can fit the needs of the organization and the team to drive that team-level performance."
HR leaders play a key role in making sure boards and CEOs understand the importance of executive retention.
CHROs can work with CEOs to "build an active program of assessment, development, recruiting, retention…so that they have a really strong, virtuous cycle that is constantly improving the talent in multiple levels of the organization," O'Kelley said, "particularly the top three, because those are the feeders to the chief executive and important C-suite roles."
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Other Retention Levers
Retention of executives is getting harder, but an argument exists that turnover and even rising turnover, like with the rest of the workforce, can be a good thing if it's to weed out underperformers—as Meta did to the benefit of its stock price, up 17 percent on February 18 since announcing cuts to its "lowest performers" in January—or to support a business transformation.
Many major tech companies have been making layoffs over the last two years, with Salesforce being a recent example of a company that conducted layoffs while posting hundreds of job openings in an apparent attempt to reshape its workforce.
"Executive turnover due to poor succession planning, bad hires or other missteps is a needless waste of resources and loss of shareholder value," Rubin explained. "Turnover due to planned transitions, significant disruption in the industry or a radical change in business strategy may ultimately enable a business to deliver greater value via new leaders."
Gartner's recent research found that 67 percent of executives said they're asked to do more compared to two years ago and that they're more stressed by their work responsibilities. Research from Gallup and others suggests employee engagement is at all-time lows.
Kirss said this provides a case for better mental health support for executives and employees, and for working to improve relationships across the C-suite with the CEO and board.
"The most important thing to do in that respect is to equip C-suite leaders with a more productive and effective leadership team at their functional or business level," he said. "What really frees up time for C-suite executives to perform their role on the executive leadership team is having a high performing leadership team that's supporting them."
These functional leaders can include, as an example in HR, an operations leader to handle management of functions such as payroll and benefits, because "the CHRO should not be getting pulled down to fight fires inside of the HR function."
He added that the CHRO should be plugged into the satisfaction levels of peer executives in order to help the CEO on this rising challenge and other key talent strategy matters.
"In addition to driving higher business performance, being part of a high-performing team can help increase individual executive resilience and reduce unwanted early departures," Rubin said. "Create a buffer when transitions do occur and create both focus and agility within the organization."
Results May Vary
At smaller companies and venture-backed startups, executive turnover may not be rising. Steve Schloss, a former head of HR at the U.S. Golf Association and LivePerson who is now an operating partner at Edison Edge, told Newsweek that the rate of executive turnover has not gone down "in the context of growth-stage companies," the sector he's been working with primarily over the last few years.
He also shared that a shrinking market of willing executives is a rising problem that he sees in this level of the labor market, and he noted that product, engineering and go-to-market functions have seen increased turnover, though he does not attribute it to recent trends.
Spencer Stuart's research found the lowest average tenures for these positions: inclusion and diversity officer (2.9 years), chief operating officer (3.1), chief sustainability officer (3.7) and chief marketing officer (4.2). Chief sales and revenue officers are also known to have shorter-than-average tenures.
Schloss attributed executive turnover in these functions to needing to meet the demands of product innovation and revenue growth that typically define a company's operational success. For public companies, this pressure arrives on a quarterly basis with a lot of attention from investors, analysts and activist organizations.
When he does see shorter executive tenures, Schloss said that some executives have moved over from larger companies where they aren't accustomed to the realities of working in a startup. He added that, in many cases, this type of failed hire is not a matter of lacking functional or leadership skills, but of failing to acclimate to a new environment.
Success in the C-suite is driven by more than just competence, he continued.
"You're being presented as a candidate to someone because you've shown competence," Schloss explained. "That's kind of table stakes. Above that is really the cultural, social, political, relational capital that you have that translates into real value."
Executive Search Considerations
Based on the new demands of executives today and the threat of rising turnover, companies can avoid executive attrition by making some adjustments in the hiring process.
O'Kelley mentioned intellectual curiosity, a willingness to adapt and a willingness to take on the unexpected as new criteria to consider beyond competency and accomplishments for CEOs or other senior leaders.
Rubin echoed similar sentiments: "Ensure senior executives have the support they need to integrate into new roles and then continue to evolve and grow throughout their tenure. The day they stop is the day they begin to become out of step with the broader business environment."
From a compensation perspective, Reda suggested "longer-term equity awards" to incentivize longer executive tenures, such as restricted stock options that vest after "four or six years."
In addition to a cost savings with internal executive candidates, Kirss also said businesses looking to fill a C-suite role should consider the value an internal candidate brings to the retention equation and their ability to drive performance.
For external candidates, Kirss recommended thinking about collaboration and staying power.
"You want to ensure that you make the right hire and that they're going to be with your organization for the long run," he said. "There are executives who are superstar performers, and their primary motivator is going to be their own growth, not necessarily the growth of the organization."
Kirss continued: "That's not a good or bad thing on its face, but if you're going to invest all the time in searching and hiring an executive only to see them leave for a competitor in two years, you're going to be sitting there wishing that you had maybe gone with a different candidate."
Update 2/21/2025, 11:12 a.m. ET: Steve Schloss' job title has been updated to reflect that he is now an operating partner at Edison Edge.
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