Hospital CEO turnover rate dropped in 2017

Executive looking out window
Hospitals saw 107 top leaders leave their organizations in 2017, a 31% decrease from 2016. (Getty/Tom Merton)

Although hospital CEO turnover has been in the double digits the last five years, a new report indicates the rate may be leveling off.

Hospitals saw 107 top leaders leave their organizations in 2017, according to a report released this week by executive outplacement firm Challenger, Gray & Christmas. Those exits are 31% lower than the 154 announced in 2016.

RELATED: Hospital CEO revolving door keeps spinning, but not as fast as last year

The report (PDF) also looked at chief executive officer changes across U.S. industries and found that overall 1,160 leaders left their companies in 2017, the lowest total number since 2004 when there were only 663 CEO exits.

“The uncertainty surrounding the tax and healthcare bills, coupled with a tight labor market, kept companies from making any major leadership changes in 2017,” John Challenger, CEO of Challenger, Gray & Christmas, said in an announcement. “In fact, most of the leaders who did leave their roles last year stayed with the company in some capacity, typically as a board member or other C-level executive.”

RELATED: ACHE report: High healthcare CEO turnover rates now the norm

Challenger said that the departures were significant due to the number of executives in various industries who left due to sexual misconduct. Last year, a total of 11 CEOs left amid sexual misconduct allegations, 266% more than left for that reason in 2016. In fact, a total of three CEOs left for that reason in each of the last three years.

“The #MeToo movement, so inspiring to women and men who have endured abuse, particularly at work, also inspired companies. Not only are many companies reevaluating their sexual harassment policies and procedures, but many are operating under a zero-tolerance policy, especially regarding the heads of their organizations,” said Challenger.

In an analysis of news reports of allegations made since October, Challenger found that 71% of alleged abuse occurred in the workplace. Twenty-six percent was reported to the company.

RELATED: Sexual abuse scandals: What hospitals can learn from high-profile Hollywood, government cases of harassment

“Companies are more poised than ever to create a safe environment for workers. Cases of sexual misconduct, discussions of which were previously kept in-house, if not ignored, are now being openly discussed and exposed. This kind of accountability begins with the person in the top spot,” said Challenger.

Indeed, lawyers recommend that healthcare leaders take lessons from the sexual misconduct scandals that have rocked Hollywood by establishing policies that address disruptive behavior, investigating all complaints and developing an action plan to address complaints.