CIO Tenure Improving

Jul 8, 2005

Allen Bernard

Just after the boom-days of the early part of the decade CIOs were averaging between 18 and 24 months on the job. Whether they were moving on voluntarily is a question no one interviewed for this article could answer, but it's a safe bet many did not willing seek "other" employment.

Today, things have changed. CIO tenure has risen to a mean of three years; this according to Gartner's most recent CIO survey completed late last year.

CIOs actually are holding their jobs longer than the average CEO today and that trend seems to be stabilizing as companies digest the glut of technology spending from the late 1990s and early 2000s, said Mark McDonald, Gartner's group vice president, Executive Programs.

"(IT) is now running like any other operating department ... ," said McDonald. "So, the difference we're seeing in tenure is much more along the lines of attitude and what kind of return I'm going to generate for the IT budget."

Another cause of the increased tenure is a better economy and the fact that companies seem to have squeezed every bit of cost cutting out of IT and are now asking IT to contribute to growth instead of cut backs, said Jeff Markum, San Francisco Bay Area director for staffing firm Robert Half Technology.

"In the last year or so I think that has changed," said Markum. "Especially within companies that see technology as a strategic advantage or profit center, the CIO's job is incredibly important again."

What may have contributed to so much turnover earlier in the decade may have come about because of poor hiring practices during the boom years, said Dan Gingras, a partner in Tatum Partners, an executive outsourcing firm.

When everyone needed a CIO, or at least thought they did, many companies turned to their HR departments to do the job. Not really understanding the role, those in HR hired based on qualifications that weren't necessarily essential to the job. Therefore, many of those hires often had a hard time adapting to their new, strategic jobs and subsequently failed.

This is still going on today at companies with revenues below $500 million said Gartner's McDonald. But in companies with assets greater than $500 million the CIO's position is taken seriously and filled the same way any other c-level executive's job is filled.

"How does someone who is hiring outside of their own personal competency determine the competency of a position that has really two components: the technology domain and the business domain?," asks Gingras. The answer? Not very well.

As an interim CIO, Gingras sees many of his peers leaving their full-time jobs at just around 30 months to seek the greener pastures an improving economy provides. He also believes this trend may continue and, therefore, will drive tenure numbers down again.

McDonald disagrees with this stance since there are still more CIOs than jobs for them to fill and, because of industry consolidations and internal departmental consolidations, this trend will probably continue for the foreseeable future.

"There is always going to be a market for talented business and technology professionals ... but I don't think it's going to be a huge trend," said McDonald. "I think the supply of CIO talent will continue to exceed demand."

Of course, turnover is situation, geographic and industry related, said Bill Waas, CEO of the Illinois CIO Exchange. Within Waas' groups there has been a lot of turnover recently but that churn has been primarily in the insurance industry. Chicago area CIOs tend to hold their jobs for some time, he said.

The trend that Waas is keeping his eye on actually is one where CIOs are now being asked to take on the role of COO. An interesting turn of events and one that is brand new, said Waas.

Overall, though, things are looking up for CIOs. As a group, they are considered more strategic today than ever; their role in the company is being viewed as vital to success; and they are finally getting the respect they deserve.

"[T]he tenure of a good CIO is growing," said RHT's Markham. "And as the economy gets better and as the job market gets better companies are going to want to keep their CIOs."


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