Don't look now but brand name CEO and executive-level turnover is rolling like rapids down a river.
Pick your stat. from an industry tracker, or for simplicity's sake, go to the WSJ's Management page for a full run-down: http://online.wsj.com/public/page/management.html.
Just within the past few weeks, new CEOs or plans to have new CEOs have been unveiled at Twitter, Skype, H-P, Nokia, Rolls Royce and Campbell Soup. Other companies experiencing high-level turnover include Comcast, HSBC, MTV, Yahoo and Tesco.
Turnover at an elite level exceeds last year's rate, which was essentially flat based on economic conditions.
So what does this all mean? Well, for starters, consider these moves a sign that the market is slowly turning to more growth vs. contraction. While this isn't true across all sectors and the pain from the recession continues to impact the consumer, executive hiring tends to be a leading indicator within the overall jobs category, which tends to lag other indicators.
This activity will portend more deal making in the coming months, which is confirmed through M&A stats predicting 4Q to be a more active quarter. According to a nationwide report by mergermarket and Merrill DataSite, there were 1,701 deals totaling $326 billion during the first half of 2010. That is a 9 percent increase from the same period in 2009 (source: Atlanta Business Chronicle.)
New executive hires also mean more re-organizations since that's what new CEOs generally do to build their power base. That will lead to more shedding of jobs in some cases. It also will probably lead to additional strategic hires, a New Normal phrase that describes pockets of hiring vs. the across the board job creation.
The $600 million question (or gorilla in the room depending on your POV) is whether companies, flush with nearly $2 trillion in cash by some estimates, will take the leap and do more hiring in 2011? With profits up 38 percent among the S&P 500 (source: Wall Street Journal), there clearly is enough cash to invest in more workers. The market, however, needs more certainty vs. uncertainty to feel like the risk is worth the reward.
Having said all that, what do you think? Are CEOs and other executive-level leaders too risk averse right now? What's it going to take to get growth really moving in 1Q 2011? The TGR welcomes your comments and feedback. Thanks for reading,
JG
