More CEOs join 'Great Resignation' amid COVID-19 burnout
The “Great Resignation” isn’t just for rank-and-file workers. Corporate CEOs are quitting their jobs in significant numbers during the COVID-19 pandemic, employment watchers say.
The executive outplacement firm Challenger, Gray & Christmas reports that the number of chief executive officers who left their jobs in the fourth quarter of 2021 was 16% higher than a year earlier. A total of 106 CEOs left their jobs in December and 142 in October in 2021, the second-highest year on record.
Maurice Cayer, who teaches industrial and organizational psychology at the University of New Haven, said the trend is dominated by older executives who are doing well financially and want to trade in their COVID-19 stress for lower-pressure roles or retirement.
“They are making a lot of bucks, and many are baby boomers choosing to cash in,” Mr. Cayer said. “Some retire and get off the racetrack, but many start up their own businesses or join venture capital firms, where there’s less pressure and great opportunities to continue growing their wealth and status.”
What’s more, boards of directors are nervous about the pandemic economy and human resources departments are “scrambling to offer attractive stay-pay packages to keep leaders and stop the hemorrhage,” the management professor said.
According to the latest data from the U.S. Bureau of Labor Statistics, a record 4.5 million Americans quit their jobs in November, representing 3% of the nonfarm workforce.
The bureau’s latest Job Openings and Labor Turnover Survey found that nearly 33 million Americans — one-fifth of the workforce — quit their jobs from April to November 2021, leaving nearly 10.6 million openings at the end of that month. December’s numbers will be released on Feb. 1.
Meanwhile, the number of startup businesses looking to hire executives soared to record highs last year. The U.S. Census Bureau reported on Jan. 12 that entrepreneurs filed 5.4 million new business applications in 2021, passing the record of 4.4 million set in 2020.
Wall Street trader Charles Mizrahi, the founder of Alpha Investor, said the trend means “the next Amazon, Microsoft or Facebook could list its founding date as 2022.”
“The exodus from the corporate world is another great example of capitalism at its best,” Mr. Mizrahi said. “Many people are stepping out and become entrepreneurs and working for themselves.”
Startups grew last year as the number of departing CEOs accelerated. Jobs website ZipRecruiter reported that openings for executives hit a peak of 40,681 in October, up from a monthly average of 22,072 in 2020. In May 2020, when COVID-19 lockdowns were just 2 months old, only 9,301 openings were listed.
“It’s many factors: the burnout, the pandemic, the school closures, the need to take stock of life,” ZipRecruiter Chief Economist Julia Pollak told NBC News.
Resignations last year included several longtime CEOs: Amazon’s Jeff Bezos, Twitter’s Jack Dorsey, Disney’s Bob Iger and American Airlines’ Doug Parker, who announced he will retire in March.
The resignations have continued into the new year: The CEOs of menswear company Bonobos; the Emergency Medical Services Authority, which oversees paramedics; the Utah Pride Center, an LGBTQ nonprofit; and the Signal instant messaging app have all stepped down in the past few days.
Hans Dau, CEO of Mitchell Madison Group, a business consulting firm, said executives are finding it easier to leave after increasing their wealth last year.
“The S&P 500 [stock market index] returned 31%, 18% and 29% in 2019, 2020 and 2021,” Mr. Dau said. “The Case-Shiller housing index is up over 30% since 2019, with higher-end markets doing far better. CEOs have increased their wealth drastically and have options.”
A Gallup survey in November showed an increase in the number of managers who reported feeling burned out “very often” or “always.” The managers included chief executive officers.
“CEOs must be productive, creative, cooperative, caring and meet payroll. They have to be leadership scientists. But CEOs are human, too,” said Christine McDaniel, a senior fellow at George Mason University’s Mercatus Center free-market think tank.
She said the trend of CEOs quitting could reshape the U.S. business landscape over the next few years.
“Lots of people are rethinking things in the wake of the pandemic,” said Ms. McDaniel, a former U.S. Treasury official.