For years now, turnover rates for CEOs in the healthcare industry have been high. While they peaked at 20 percent in 2013, even today these rates remain decisively higher than in other industries. In the ever-evolving world of healthcare, it can be challenging for CEOs to plan for their departure. Even something as simple as deciding when to break the news to their team can involve endless considerations.
The plight of healthcare CEOs is unique in this regard. In many other prominent industries, it’s common for CEOs to give notice of their departure just weeks or even days in advance. On June 11 of this year, Twitter CEO Dick Costolo made an announcement that he would be stepping down on the first of July. In some industries, the announcement of departure may even take place after the CEO has already stepped down and a successor has been selected.
For CEOs in the healthcare industry, their departures are rarely that simple. While crafting a succession plan is crucial for all outgoing CEOs, sometimes just picking a date to make the announcement can be difficult.
Robin Singleton serves as the executive vice president and practice leader of National Healthcare Practice at DHR International. Singleton says if a departure announcement is made too early, the CEO might simply be fired. On the other hand, if they announce their departure too late, the board will not have adequate time to ensure a smooth transition.
According to Singleton, the average announcement of a CEOs departure in the healthcare industry comes between 9 and 12 months ahead of time. Paul Esselmen, senior executive vice president and managing director at Cejka Search, says that the transition time depends on the circumstances under which the CEO is leaving. At a minimum, Esselmen says that a CEO should provide 60 days’ notice to both their board and the executive team.
Singleton says that CEOs give their boards such advanced notice due to the culture in the healthcare industry. “They have a deep sense of commitment ultimately to their patients and they want to make sure their culture is protected,” says Singleton. For more information, visit: