COVID-19 Could Tempt Executive Retirement — and Companies Need a Plan

Learning how to expect the unexpected is a skill in business, a necessary evil. More often than not, it means coming up with answers to difficult hypotheticals before they are ever presented.

The United States is now four months into the coronavirus crisis, a public health disaster and an economic threat unlike anything this country has faced in recent memory.

From the standpoint of executive search and leadership assessment, the current state of affairs is precarious. The health risks of COVID-19 and the rigors of following safe practices in business have made all of us re-evaluate our priorities in 2020.

Work in the United States is undergoing profound change as many companies adapt on the fly to a telecommuting model. This has impacts both on day-to-day processes and on the function of management.

The uncomfortable question boards and executives must start to consider is whether their leadership will remain invested as the pandemic continues.

Many successful CEOs, CFOs and directors of human resources have above average tenure. They've accomplished many of their professional and financial goals. They're used to doing things a certain way. They have autonomy, security and options in life, even as many aging Americans see their retirement plans fall by the wayside.

What if these leaders decide they want to pull their chips off the table?

In recent months, my firm has been asked to do “bench” searches by CEOs concerned that one (or more) of their direct reports could retire since they’d already created significant wealth over the course of their career.

These concerns are legitimate – especially in the midst of a pandemic. With business operations in flux and many industries facing severe strain, companies must be prepared for the possibility that their top talent may decide to retire earlier than anticipated.

From the hassles of frequent travel to the social anxieties of doing business in a COVID-19 world, the months ahead may see a wave of retirements from people in positions of leadership.

A typical executive search takes about three months to complete. Now is not the time to be caught flat-footed without a plan in the event that a key leader makes a personal decision to sit out the pandemic for the good of their long-term health.

A few months ago, a publicly traded healthcare company’s CEO came to me with concerns about potential turnover since the management team was extremely wealthy. We moved forward and conducted research on five different positions, updating the data ever six months over a two-year period. The CEO thought the insurance policy was worth it.

Building a folder of qualified candidates to pursue if sudden changes emerge is one of the most important insurance policies a company can take out in 2020. Jumpstarting the executive search process is among the best ways to avoid compounding disruption at time when it's a fixture of business in the United States.

As the realities of work evolve and projections become murky, it is more important than ever to ensure continuity of strong leadership.

Senior business leaders are in a challenging position that may require them to take stock of their lives and their families moving forward. While the choice to step away may be personal, the void left behind can be felt profoundly.

If companies learn to expect that these departures may be part of the executive landscape, they will be better positioned to keep things running smoothly and stay ahead of the competition.

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