Most companies can’t afford a disruption in tech leadership. The IT function is too deeply woven into the fabric of the business to risk discontinuity in technology operations.
“I don't think there's a CEO that sleeps comfortably at night if that particular body of functional domain is not sitting in good capable hands,” Craig Stephenson, senior client partner and managing director of the North America CIO/CTO Practice at the recruiting firm Korn Ferry, said.
Digital transformation is the new frontier for growth and revenue, pushing CIOs closer to the center of business. Finding the right person or team to lead the technology function, whether through internal channels or outside recruitment, is an enterprise imperative.
As companies ask more of the CIO, they are paying more to get it.
Salaries for roles such as CIO, CTO and VP of IT grew 8.4% in 2022, compared to the previous year, according to tech career marketplace Dice’s annual salary report. The year-over-year salary growth rate doubled for tech leaders since 2021.
CIOs willing to test the market are often getting offers that increase total compensation by as much as 30% or more, Stephenson said.
The move from primarily operations-based responsibilities to a portfolio that encompasses business strategy, product design and customer experience is a major driver behind rising salaries.
As business acumen becomes more central to the role, CIOs have entered the C-suite, where their seat at the table is often in close proximity to the CEO.
“Any company that still has the CIO report into the CFO is legacy — they’re still perceiving the CIO as a cost center,” Alistair Robinson, president of executive search at tech talent recruiting firm Harvey Nash Group, said.
Data science and cybersecurity have been added to a remit that still includes infrastructure and contemporary business systems, Robinson said. While technical knowledge is foundational to the role, it’s not enough for most companies.
“If you don't have a strategic mindset, and if you don't have strong leadership skills, then irrespective of the depth of your technology competencies, you're going to struggle to get to the C-suite,” said Robinson.
“Genius chops around artificial intelligence or data science may give you an opportunity if you're working for a company where that's their secret sauce,” Robinson said. “But you've got to have that broader skill set too.”
Promoting from within can ensure continuity.
In just the last six months, logistics and trucking company XPO, food industry giant Tyson Foods, and global consumer products conglomerate Colgate-Palmolive appointed technology leaders who emerged from their own ranks.
When companies opt to hire from the outside, looking within the same industry is a common place to start.
“We have never done a search, where industry knowledge is not required,” Gary Erickson, founder and managing partner at CIO recruitment firm Executive Search Partners, said.
Lack of industry knowledge is a feature that knocks a lot of otherwise highly qualified candidates out of the running for CIO jobs, according to Erickson.
Pacific Life took the industry route when the company hired Mary Beth Eckert away from another insurer in January. Eckert joined Pacific Life as its first chief information and digital officer after serving as SVP and CIO of corporate and insurance services at USAA.
It’s become less likely for companies to hire from outside the industry, Erickson said. “If you’re in manufacturing,” Erickson asked, “are you going to hire someone from the healthcare industry, or would you prefer someone who really knows the manufacturing business?”
For CIOs who bring motivational leadership and business acumen together with industry knowledge and technical skill, the door to greater responsibilities is wide open.
Korn Ferry cites technology as a potential pathway to top executive roles.
“Many of the individuals that we're talking to in terms of top CIO and CTO talent are really open to leaning more towards becoming a president, becoming a COO, becoming in charge of product with P&L responsibilities,” Stephenson said. “As all this starts to converge, we do believe this is the pipeline for future leadership.”