Companies used to value loyalty. Now it might hold workers back from advancing | Fortune

"That Hill's resume turned so many heads was telling of how unusual the one-company career path has become. For most aspiring CEOs, in fact, company loyalty may have now become a liability."

"The paper's authors looked at a sample of more than 50,000 U.S. CEOs and put forward several explanations for why new chief executives are tending older, including that companies are increasingly looking to cut back on risk. They might opt to trade the potential dynamism of a younger CEO with more experienced and stable guidance an older leader can offer."

"But in corporate America's search for expertise in top roles, boards are now valuing candidates who have worked in different roles across multiple companies, potentially even in unrelated sectors. For the company stalwart employee eager to climb to the very top, the reality of corporate America today means their loyalty is unlikely to go rewarded."

"The study's authors found that, compared to in 2000, people who go on to become CEOs spend around 10 more years of their careers working outside of the companies they will eventually lead. Meanwhile, the number of years employees spend at their firms before becoming CEOs has remained roughly the same over the past few decades."

A CEO career profile has shifted away from long-term loyalty to a single company. The share of CEOs who are women or people of color is increasing slowly, while CEOs are becoming older. In 2023, the average CEO age at appointment was 55, compared with 47 in 2000. One explanation is that companies seek to reduce risk by choosing leaders with more experience and stability. Another explanation is that boards increasingly value candidates with experience across multiple roles and companies, sometimes even in unrelated sectors. As a result, future CEOs spend about 10 more years working outside the companies they later lead, while time spent at the eventual employer has stayed about the same.

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