The Dawning of the C-Suite Candidate Scarcity Era

Companies will need to get creative in the way they find candidates for top positions.
By: | January 15, 2019 • 4 min read

Happy Birthday! Happy Birthday to the 10,000 people in the United States who turned 65 today. And tomorrow, too. And the day after that. In fact, according to Pew Research, this will happen every day for the next 18 years. We are seeing the effects of this aging of the workforce already and it’s specifically a concern for the C-suite (and those responsible for filling it) in terms of succession planning. To make matters more challenging, the size of the workforce coming in behind these retiring baby boomers is the smallest workforce demographic. Simply put, there will not be enough talent to go around. The most common age for people entering the C-suite is the 45-to-54 age bracket. The fact is, we are in the beginning stages of a major demographic shift, with the Dept. of Labor projecting that the percentage of those ages 45-to-54 will decline from 21.3 percent of the working population in 2016 to 19.2 percent by 2026.


Given this diminishing population, companies need to think now about how to retain talent, how to train talent, and how to creatively position themselves if they need to recruit talent if they plan to be a competitive force amid a shrinking labor pool.

Beware of External Forces

Large-cap and even some mid-cap companies generally have good rotation and professional development programs in place to groom future leaders for their succession needs. (And if they don’t, they better be seriously thinking about it.) I believe this demographic trend is going to hurt emerging growth companies first, because they’re the ones that tend not to have a pool of inside candidates from which to draw. But thinking as an executive recruiter, the place I’m going to go hunting for an emerging-growth client is most likely from a well-run mid-cap or large-cap that has superstars on the move upward. So, if you are sitting in the C-suite of a larger company, know that your stars are being tempted away by external forces — and those external forces will become more aggressive as the years go by, simply as a matter of survival.

For these emerging growth companies, the key challenge will be differentiating and de-risking themselves. The traditional incentive for private companies to induce their corporate targets to join a more-risky venture has been stock options. As we move forward into the C-suite candidate scarcity era, more thought will need to be put into incentive programs to attract the best talent. Gone are the days when someone will move for a smaller paycheck in the hopes that their stock options will make up the difference. Emerging-growth companies will also need to do more than offer free lunches and campuses that cater to every mundane need. They’ll need to craft compelling total-compensation packages that will probably resemble those of their larger public cousins. They’re going to need to de-risk the move for the corporate candidate.

The Problem of Luring CFOs

It is not just the evidence we have seen in highly specialized skills sets such as artificial intelligence engineers. That scarcity is due to an explosion of companies building out that capability with a population of capable candidates that’s far below demand. It really is starting to show up across the C-suite in terms of been-there-done-that-executives. My particular focus is the role of the technology industry chief financial officer. What we’ve seen in this landscape is a desire by highly valued private companies to attract a CFO with big successes already behind them. Many of these CFOs are in a position of not having to take on this tough task again and can’t even be brought to the table for a conversation. The payoffs in taking a company public today are generally much larger than they were 10 or 20 years ago. So, when the executives cash out it can be life-altering. This reality — C-suite executives potentially retiring early — only exacerbates the larger demographic consolidation explained above.

Aside from creative recruiting and stronger compensation packages, what can be done to off-set this coming scarcity era? One creative endeavor in the CFO realm started four years ago in Silicon Valley: the CFO Academy. The Financial Executives International (FEISV) network recognized this pattern and set out to do something about it. The Academy offers a four-session course to help up-and-coming CFOs (controllers, treasurers, FP&A execs, and the like) understand where they have gaps in their hard and soft skills, and to provide a real-world training opportunity to help close those gaps. (I am not affiliated with FEI other than volunteering as an occasional panel speaker.)

Candice Graves, who heads the program points out: “Our attendees are a step or two away from becoming a CFO and many have gaps in Investor Relations and/or fund raising.” Those gaps are addressed via presentations from investment bankers, venture investors, and sitting public and private company CFOs, she says. They talk about preparing for a fundraising, what is done inside the company, and what happens after that information is turned over to the investment community.

The biggest challenge to recruiting people into the program? Time commitment, says Graves. “These are all working professionals and we seek a mix of small companies to large, and a mix of gender and ethnicity, so pulling each group together is a big effort.”

The program is an ongoing effort with current students and graduates, says FEISV president Mark Muenchow. “We have an annual event to bring all the previous speakers, students, and organizers together once a year,” he says. “In addition, each class holds quarterly follow-up meetings, so it is not ‘Here’s your certificate, good bye,’ but rather an on-going effort to continue the group knowledge.”


The program expanded to the SF Bay Area chapter last year and is getting national attention from other chapters of FEI. For the CFO silo of the C-suite, this a potential game changer. Maybe other CXO professional organizations are doing similar programs for their members. If not, perhaps the CFO Academy becomes a model for all.

At the end of the day, boards, CEOs and heads of HR and talent acquisition will have to face the music that there aren’t enough seasoned C-suite pros to go around. They’ll be forced to take the up-and-coming candidate. However, through the efforts of professional organizations such as FEI, perhaps making that hire will have been significantly de-risked as it helps build skills that will lead to good decision making. After all, the outcome of hiring a great executive is improved decision-making for the company, no matter what the CXO role.

David Arnold is president of executive-search firm Arnold Partners LLC.