March 9, 2017 – Not surprisingly, CEOs are some of the oldest and longest-tenured corporate executives compared with other prominent C-suite roles, this according to new analysis just released by Korn Ferry. By contrast, the study found chief marketing and information officers sit at the other end of the spectrum and are the youngest and shortest-tenured top professionals in the workplace.
The Korn Ferry Institute study of 1,000 leading U.S. companies by revenue examined the age and tenure of individuals holding C-suite titles (CEO, CFO, CHRO, CMO CIO). The data is also broken down by industry sector, including consumer, energy, financial services, industrials, the life sciences, professional services, and technology.
Impact of Millennials
When analyzed in the aggregate, the average age for a C-suite member is 54 and the average tenure is 5.3 years. However, the numbers vary depending on title and industry.
“As the Millennial generation advances into C-suite roles, this will certainly drive the average age of this executive pool down,” said DHR International global investor relations and communications group leader Smooch S. Reynolds, who has been an IR and communications functional search expert for more than two decades.
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“As the average age of a CEO lessens, so, too, will his or her choice about who is recruited into the C-suite. This will likely be driven primarily by a desire to bring fresh and innovative thinking to the direction of the business – it will also enable companies to resonate with one of the most interesting generations of talent who are rapidly becoming key consumer and B2B decision makers,” Ms. Reynolds added.
1) CEO – Oldest and Longest-Tenured
The average age for a CEO across industries is 58, according to this study, with the oldest average CEO age of 60 found in financial services and the youngest, 55, found in the technology sector. In terms of tenure, the average CEO term is eight years. Those in financial services have the longest tenure, 9.7 years, and those in energy, the shortest, at 6.1 years.
“It makes sense that for large, complex companies, the executive who holds the highest leadership position would have more and diverse experiences, which would translate to more years in the workforce,” said Tierney Remick, vice chairman, Korn Ferry board and CEO services. “Immediately following the 2008 Great Recession we saw many boards asking their CEOs to continue to lead and navigate through an unprecedented period of dynamic change and ultimately, recovery.”
2) CFO – Longest-Tenured Behind CEO
The average chief financial officer age of 53 represents the middle of the pack for C-suite members. There isn’t much variance in the age of CFOs among industries, with an average age of 54 for financial services and the life sciences, and an average age of 53 for the other industries (consumer, energy, industrials, professional services and technology).
As for tenure, behind the CEO, the CFO is the longest-serving C-suite member at an average of 5.1 years, with the longest-tenured CFOs in the life sciences industry at an average of six years, and the shortest-tenured CFOs in the technology and industrial sectors at an average of 4.9 years.
“In 2016 we saw internal promotions of CFOs continue to climb to 58 percent. We’re also finding that a contributing factor to the longer tenure of CFOs are boards, which are taking the time to create robust succession management processes to ensure chosen candidates are a good fit, and therefore stay longer,” said Bryan Proctor, senior client partner and leader of Korn Ferry’s CFO practice.
Getting to the Top Can Be Difficult
It’s one thing to talk about the age and tenure of top executives, but just advancing to the C-suite can be fraught with obstacles and lots of competition. According to executive recruiters who ply their trade moving star performers from one C-suite to the next, the upturn in the market over the past 12 to 18 months has created increased demand for key decision-makers across every functional discipline ….. Here’s some further reading from Hunt Scanlon Media.
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3) CHRO – Oldest Behind CEO
Behind the CEO, the chief human resources officer (CHRO) is the oldest C-suite member at an average age of 55. Life sciences and energy tie for the oldest average CHRO at 56, and professional services has the youngest average CHRO at 54.
The average tenure for a CHRO across industries is five years. Energy has the longest-tenured CHRO average at 5.3 years and industrial has the youngest-tenured CHRO at 4.6 years.
“CHROs are in the business of relationship building, and that takes time,” said Joseph McCabe, vice chair in Korn Ferry’s HR global center of expertise. “Once those relationships are built, the CHRO’s value to the organization is even greater and hence the longer tenure.”
4) CMO – Shortest-Tenured in C-Suite
The average chief marketing officer age is 52, with CMOs in the life sciences and professional services sectors with the oldest average age at 54. The youngest average age of CMOs is 50 in the consumer sector.
The average tenure of a CMO is the lowest of all C-suite titles, at an average of 4.1 years. The longest average CMO tenure is in the financial services industry at 5.1 years, and life sciences CMOs stay on average a full two years less at only 3.1 years. The average CMO in the consumer industry stays 3.6 years.
“Today’s customer-centric CMO role is exceptionally complex and requires the right balance of left as well as right brain skills, and very importantly, a differentiated set of leadership competencies,” said Caren Fleit, senior client partner and leader of Korn Ferry’s marketing center of expertise. “CMOs with this unique profile are in high demand and are often recruited to lead the next transformation. Also, in some cases, short tenure can be attributed to the organization not being well aligned behind the change that the CMO is tasked with leading.”
5) CIO – Youngest in C-Suite
The CIO is, on average, the youngest in the C-suite at age 51, with the youngest average CIO age in the consumer industry at 47, and the oldest in industrials at 54. The average tenure for the CIO is 4.3 years, with CIOs in the consumer, energy, and professional services sectors tying for the longest-average tenure at 4.5 years. The shortest-tenured CIO is in the industrial sector at an average of four years.
“The pace of change is rapid and the breadth of increasing responsibilities continues to reconfirm the importance of the CIO role,” said Craig Stephenson, managing director of the North America CIO practice at Korn Ferry. “CIOs continuously rise to the challenge and it’s common for this executive profile to leave after a few years, not because of dissatisfaction, but because the challenge they set out to accomplish is achieved and other, perhaps larger, opportunities await.”
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media