The skills gap. The talent gap. The labor shortage. None of these phrases are anything new to industry leaders who have worked hard in recent years to find ways to get workers in the door, train them and, ultimately, retain them.
But the problem goes far beyond the shop floor. It goes straight to the top. Succession planning in a long-tenured industry like manufacturing is critical and getting more so every day.
In 2024, AI data company CADDi surveyed more than 330 U.S. manufacturing professionals for its American Manufacturing Pressure and Productivity Index. At that time, almost 73% of senior executives expected to retire in the next decade.
And boards have taken notice. Manufacturers Alliance, in a report with leadership advisory firm Egon Zehnder, found that about half of board members surveyed noted that “top-team succession” planning had remained just as important in the past two to three years; the other half said it had become more important.
Without a plan to pass knowledge down, however, it can become a problem. A lot of leaders from the CEO down to the heads of finance, human resources, operations, and more, are getting ready to retire at the same time, which makes external leadership searches much harder.
A Topic for Decades
Lauren Herring, CEO of career and leadership development company IMPACT Group, said C-suite succession planning has been a topic among their clients for decades. The Great Recession dealt some financial blows to leaders in the younger part of the Baby Boomer generation and many of those leaders ended up staying in the workforce for longer than expected.
Across the board – not just in manufacturing – Baby Boomers are maintaining their leadership roles for longer, said Ash Wendt, co-founder of Cowen Partners Executive Search. But in manufacturing, he sees a succession problem.
According to research from Cowen Partners, industrial companies have some of the longest-tenured senior leaders in the business today. The executive search firm sampled SEC EDGAR proxy filings from the S&P 500 in 2024 and 2025 and found that, across the full sample of various industries, 42% of CEOs were 60 or older.
Family-owned manufacturers may not have a written succession plan in place, Wendt said. The owners often hold the “operating knowledge” of a company, he said. But steady leadership can be seen as a positive, something the board doesn’t question.
“In manufacturing, almost more than any other industry, long tenure looks like stability,” Wendt said.
Leadership consulting and executive search firm Spencer Stuart, in a report on the value of CEO succession planning for private equity firms, noted that “experienced CEOs are in short supply.” One of the firm’s 2025 surveys found that just 7% of former public and private CEOs took on another CEO role.
Companies looking to hire externally should give themselves longer lead times. And companies looking to develop talent internally have work to do, too. They should look beyond just the next leader, as vice presidents and other senior leaders in the industry are largely nearing retirement age themselves.
Additionally, manufacturers need to treat the COO and CFO roles as critical as the CEO one in terms of succession planning. Those roles are meant to support the CEO, but companies don’t always give them the same attention, Cowen Partners noted.
They should create transition plans, including emergency successors, for all manufacturing executives at least two steps below the CEO, Wendt said. They should also make sure that plan includes a realistic amount of time for an external search, for each role that might require one, in today’s market. Wendt suggested making succession planning a “board agenda item,” not just an HR responsibility.
One challenge to developing leaders internally in today’s market is that companies aren’t often growing or shrinking in a cohesive way – some areas of a business may be hiring while others are cutting back, IMPACT Group’s Herring said. Additionally, some companies may have pulled back on their global leadership placements during times of big disruption in recent decades, like the Great Recession or the COVID-19 pandemic. But those global experiences are important to developing leaders who can oversee strategy for facilities globally.
“We’re looking for diversity of leadership experience,” Herring said. “And so how do you build that intentionally in different ways as you grow people’s careers, so that when you have those C-suite transitions that people are ready with the right types of experience?”
Ultimately, manufacturing is vulnerable to gaps in leadership: a lack of direction can lead to downtime, missed production/financial targets, or dangerous incidents. Industry knowledge can be lost if a leader retires without a strong succession or knowledge-sharing plan in place. Spencer Stuart’s research noted that replacing a CEO without such a plan leads to delays and a hampered ability to adapt to changing markets.
Tech-Savvy Leaders Needed
Today’s leaders need to be able to retain institutional knowledge while also being able to embrace and explain new technology. Cowen Partners’ Wendt suggested new hires be in their roles a year before their predecessors retire or leave, when possible, to ensure knowledge can be shared from one leader to the next.
In our report on changing board roles, the need for insights into technological change took a top spot: 91% of respondents said “digital, AI, and technology-driven transformation” had gained importance in the past two to three years. CEOs in the survey reported that “AI and technology have changed the board’s expectations of them.” Seven percent felt that change in expectations had been large, while most – 68% – thought it had been a moderate change.
“There is a lot more discussion around how quickly the world is changing and the various possibilities than I have seen in the past,” a longstanding CEO said in the report.
What tangible steps can companies take today to protect their knowledge base and grow their employees into future leaders?
- The IMPACT Group suggested that, when looking at transition plans, leaders identify a few pinch points: which roles hold a lot of institutional knowledge, which ones have only one or no clear successors, and which high-performing employees have not yet been moved into a leadership role?
- If companies are moving employees up from the shop floor into higher leadership roles, training is particularly important, the IMPACT Group noted. When an executive leadership opportunity opens, it causes a “chain reaction,” Herring said, as people need to be ready to step up into roles left vacant by promotions. It’s important to offer training that addresses employee needs at every level, not just when someone is first hired or when they ultimately move up to an executive-level role. A technically skilled worker may not gain leadership skills like communication or crisis management without intentional training.
- Herring said pairing training with coaching is key. People need opportunities to apply and discuss what they’ve learned with others.
- And it’s important to make sure that training is helping employees get ready for the future of the industry, rather than its past, the IMPACT Group noted. Technology is changing quickly.
