Canadian organizations are in for a massive exodus of senior executives over the course of the next five years, says a report by Odgers Berndtson. And these c-suite employees are likely to be replaced by much younger executives—who bring with them higher salary expectations.

According to the study, 17% of Canadian companies expect to lose more than 50% of their senior executives by 2016 and one in four expects to lose more than 20%. 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.

More than half (53%) of companies anticipating a wave of younger executives say they will be forced to pay higher salary demands generated by a shrinking pool of executive talent.

“The next five years are likely to bring a series of watershed moments for Canadian companies,” said Carl Lovas, Canadian chair of Odgers Berndtson. “Most companies have not adequately planned for the exit of its senior staff and are now realizing it will be very difficult to find comparable replacements. While some organizations may be successful in filling the power vacuum with an interim leadership team, others may be facing a break in business continuity and ultimately performance.”

Almost half of Canadian companies (43%) admit they are likely to experience a shortage of executives within their organization over the course of the next five to 10 years, and while 52% acknowledge that finding candidates that are a good cultural fit for their organization is one of their top three criteria, 68% 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 Lovas. “Now more than ever, organizations need to be preparing to compete in order to retain and attract the right talent.”

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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