Expected Leadership Shortage in Canada by 2016

According to a Leger Marketing report commissioned released recently by Odgers Berndtson in Canada, 17 per cent of Canadian companies expect to lose more than 50 per cent of their senior executives by 2016 and one in four expects to lose more than 20 per cent. The outgoing executives, who are predominantly between the ages of 40 and 54, will be replaced by a younger cohort that ranges in age from 35 to 49.

Almost half of Canadian companies (43 per cent) admit they are likely to experience a shortage of executives within their organization over the course of the next five to 10 years. One in three of these departing executives have been with their current company for more than 10 years and hold strong insight on company processes, culture and future plans. While half of companies (52 per cent) acknowledge that finding candidates that are a good cultural fit for their organization is one of their top three criteria, 68 per cent say they have no succession plan in place.
“Given the importance of “fit” as a criteria — in other words, someone who naturally fits well with the corporate culture and organizational strategies — many companies will be looking inward to help fill senior ranks. But the lack of planning is troubling,” said Mr. Lovas. “Now more than ever, organizations need to be preparing to compete in order to retain and attract the right talent.”
According to the research report, more than 30 per cent of managers are being groomed for a leadership position in 28 per cent of the organizations polled. Leadership development includes external education, mentoring, assessment and individual coaching.

Other Highlights

• Executives in the healthcare and public sectors tend to be significantly older than their private sector counterparts. Only eight per cent of private sector executives are between the ages of 55 and 59 compared with 33% and 20% in healthcare and the public sector respectively

• Ontario executives are more likely to stay with a company for three to five years compared to executives out west (27% in Ontario vs. 13% in B.C. and Alberta)

• Organizations situated in Atlantic Canada are the least likely in the country to have a succession plan in place (90%)

• 92% of organizations in the Prairies feel they are unprepared to handle the anticipated skill shortage, a stark contrast to B.C. where only 43% feel they are unprepared

• Quebec organizations are the least likely in Canada to say a portion of their management team is being groomed for leadership positions

• Organizations operating in the healthcare sector are tow-times more likely than private sector companies to have management undergo leadership training (46% vs. 25%)

• 82% of executives in Quebec say they will have difficulty filling leadership ranks due to a shortage of talent compared with 51% in B.C. and 48% in Ontario