This year, as with every year, there is an expected turnover at the CEO level. However, what is surprising is the CEO turnover in the nonprofit industry, including the medical and educational sectors. Much like their peers in the private sector, burnout from the pandemic may be the driver for the uptick in turnover.
According to a new article from Korn Ferry, 174 nonprofit and government CEOs departed in the first half of the year. That number represents a 39% increase over the same period a year ago and accounts for 22% of CEO turnover so far this year.
Nonprofit CEOs are just as likely to join the Great Resignation as their counterparts in the private sector, and maybe even more. Many of these leaders stayed in their role through the most difficult part of the pandemic and are ready to step down now that they are emerging from it.
According to the article, “During the pandemic, many nonprofits have had unprecedented demand for their services. They often strained to meet that demand while also trying to keep their own employees safe. Compounding matters, many nonprofits saw their membership revenues decimated early in the pandemic as many of their members cut back because they lost their jobs or had to save money for their own needs.”
Especially hard hit during the pandemic was the health care sector as well as educational institutions. Many of these leaders have experienced a decade’s worth of leadership stress in just a couple of years. The past couple of years have also seen the politicization of nonprofit work, sometimes for the better, and sometimes for the worse. Again, the stress and uncertainty level is higher than in the past.
While some CEOs are retiring, the data indicates that the number of CEO retirees is consistent year over year at roughly 24%, and others are taking an advisory role with the company. Per Advisory Board, “Generally, new leaders are brought in during a period of uncertainty. Former leaders often remain with the company for a period of time, either as a consultant or continue as a Board Member or Chair to maintain institutional knowledge and have the appearance of a seamless transition.”
CEOs that are looking for other opportunities are likely to be in high demand. “The skills CEOs implemented, as well as acquired, during the pandemic are extremely valuable and many of them are finding new opportunities both within the organization and at new companies.”
Notably, in July, CEO transitions were down 48% from June, with 58 departures in July as compared to 106 in June. July’s number is the lowest in more than two years, dating back to April of 2020.
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