The consequences of executive turnover

Abstract

The high rate of executive turnover in the healthcare industry is a major issue for health service organisations and their staff both in Australia and internationally. In the course of planning a research project examining nurse turnover at the clinical level within three Australian States/Territories, the researchers became aware of frequent executive turnover at all levels (State Department of Health, Area Health Service, hospital). Over a period of approximately 2 years there were 41 executives occupying 18 different positions, highlighting the scope of this issue in Australia. Few studies have examined the causes and consequences of this phenomenon in depth. Factors such as age, gender, education, lack of career advancement opportunities and remuneration have all been identified in the literature as important contributors to executive turnover. High turnover rates have been found to be associated with a number of negative consequences, including organisational instability, high financial costs, loss of human capital and adverse effects on staff morale and patient care. While the use of ‘acting’ roles may assist in filling executive positions on a temporary basis, consequences for the rest of the organisation are associated with their extended use. Steps which health services planners may take to attempt to minimise executive turnover include providing staff members with appropriate challenges and opportunities for growth and ensuring that a clear succession plan is in place to minimise the impact for the organisation and its staff.