The length of tenure of newly appointed Australian CEO’s is too far too short.The median ASX100 CEO tenure is now only 3.9 years. CEO turnover in Australia is twice the world average.  In the last four years global CEO tenure declined from 10 years to 8 years but in Australia it is now less than 4 years. The average tenure of a CEO in Australia is 3.9 years. Not to mention that we have had 6 Prime Ministerial changes in a decade!

The level of CEO turnover is absurd and is costing Australian business dearly.

“New hires need to stay in the job long enough to move through ‘norming’ – getting to know the business – and ‘storming’, when they start to make an impact, to ‘performing’ when they
impact the bottom line. The first year is spent learning, the second year making change and the third year only sees the start of real performance traction.

“If newly selected CEO’s and senior management are not lasting beyond the first 3.9 years, it’s time to choose another recruiter,” said  Simone Allan..“We deem a successful CEO hire as being an absolute minimum of 5 years but we should be aiming for 8-10 year tenures like many nations around the world – Asia and Northern Europe.

Cultural fit is the key to longevity.The only way to measure a recruiters effectiveness is by retention. The right CEO needs not only the right skills and experience to succeed but as important is that they need to have a cultural and emotional fit in to the new organisation.Most high level hires that fail don’t fail for lack of ability. They fail because the new hire doesn’t fit in as an individual.

The answer lies in being unafraid to probe and match the values held by the candidate and client organisation during the recruitment process. An effective recruiter needs to invest time in determining what these factors are. They need to know the successful benches in the organisations and have some grids/ templates of the successful performers to align the new talent to. They need to deeply understand your business and  go beyond the interview process, as that is just the start. They need to get to know the candidate at a forensic level – know their childhood and family background, their aspirations, their wins and losses, their passions, their past careers and reference across all levels of peers, subordinates and colleagues. They need to observe the machinations of communication flow of email/ sms and phone calls and see how responsive and timely the candidate is throughout the recruitment process. It is important to create tests and situations where you can observe candidates, their reactions and their approach to managing various situations and experiences.  

Relevant psychometric analysis and forensic reference checking is all part of the process, 360 degree conversations around the networks that they know, lead to core insights into the personality and style of the individuals.  The interview is only the start, as the real skill is what follows in determining the cultural fit.

Companies can monitor recruitment outcomes and improve retention by taking 5 steps:

  1. Make executive retention a strategic issue.
  2. Measure and track retention in all leadership roles over 1 year, 2 years and 5 years. Quality metrics drive quality retention.
  3. Start with quality recruitment. Insist on working with specialist recruiters that have a strong audited track record in retention. This will increase the calibre of pre-screened candidates and the culture fit with the organisation upfront.
  4. Commission independent externally managed “stay interviews” at six monthly intervals for senior executives. These can be far more valuable and timely than traditional exit interviews, which provide limited results. Stay interviews help track the heartbeat of the company and allow the organisation to keep abreast of issues that could affect senior staff.
  5. Make the costs of poor retention visible. Studies show at least $250,000 to replace a senior executive when you add lost productivity during disenfranchisement, the time to bring on a replacement and the time to get the new executive up to speed. Some suggest the cost of replacing a CEO could be up to 40 times base salary.


For further information, please contact Simone Allan on 0414 797 369 or