Chipping Away at the Leadership Shortage: Semiconductor Companies Bet on Youth and Cross-Industry Experience

Faced with a rather dire leadership gap, semiconductor companies are exploring unconventional solutions. They’re turning their attention to younger generations, and they are looking to attract experienced leaders from adjacent industries. 

This strategy of drawing talent from diverse sources strengthens the industry’s position, but it also comes with risks. Will executives from other industries be able to quickly grasp the nuances of semiconductor manufacturing? Can younger leaders step up to the massive challenges facing the industry? It’s a bold move, but one the industry feels compelled to make. 

Why Are Semiconductor Companies Turning to Millennials, Gen Z, and Cross-Industry Talent?

A 2022 KPMG study found that two-thirds of semiconductor executives consider talent development and retention their top strategic priority—this means that, according to them, talent risk is a bigger risk than supply chain disruptions and geopolitical issues. And for this reason, many semiconductor companies are willing to start taking steps they might not usually take in order to staff their C-suites and fill their leadership pipelines. 

One of the solutions many semiconductor companies are considering is bringing in younger talent, particularly members of Gen Z and millennials, either into mid-level leadership positions or into positions that form a pipeline into the C-suite. 

The other option is to hire experienced leaders from other industries. This is the more attractive option for semiconductor firms which do not have the luxury of time in order to prime younger candidates for executive positions. 

But regardless of which of these two approaches companies are taking, and regardless of how risky they might seem, early case studies of this approach have been promising. 

Case in point: AMD’s appointment of Dr. Lisa Su as CEO in 2014. Dr. Su was 43 at the time, between seven and 17 years younger than the average CEO (with 86% of CEOs being in their 50s and 60s). Despite being relatively young for a CEO and coming from a background in electrical engineering rather than semiconductor manufacturing, Su led AMD to a remarkable turnaround, with the company’s stock price increasing by over 4000% during her tenure. 

This diversification strategy also aligns with proven success factors in innovation and financial performance. Companies in the top quartile for age and cultural diversity on executive teams were 36% more likely to have above-average profitability.  

Strategies to Attract Gen Z and Millennials to the Semiconductor Industry

Let’s talk about reeling in young blood. Gen Z, with their oldest members barely pushing 27, might be too green for the C-suite, but they’re ripe for the picking when it comes to long-term succession planning. But on the other hand, millennials, people currently between the ages of 28 and 43, are prime candidates for management positions and perhaps even a few of those executive chairs gathering dust. 

But the problem is that semiconductor companies aren’t typically top of mind for young job seekers. Why? Because of their poor brand image. In fact, nearly three out of five people believe that semiconductor companies are less attractive to work for than other technology companies.  

From our conversations with clients in this industry, several key strategies have emerged. To improve brand image and resonate with Gen Z and millennials, companies should focus on the following areas: 

1. Sustainability

Twenty percent of Gen Z and millennials have left a job to find something that aligns better with their desire to protect the environment, and another 25% said they will do the same in the future. If you can offer them a value proposition that includes environmental benefits, for example designing chips for electric vehicles, you could potentially be the employer they flock to. 

2. Corporate social responsibility (CSR)

Three out of four Gen Z and millennials prefer to work for an employer that isn’t just profit-driven but wants to make a positive impact on the communities it operates in and serves. But less than half of Gen Z and millennials believe businesses are having a positive impact on the world. If you can ramp up your CSR and ESG initiatives to the point where you can assure them that you are one of the few businesses really doing good, you’ll be an attractive employer. 

3. Mental health

For Gen Z and millennials, a focus on mental health at work is really important, but 30% say they are too scared to discuss it with their direct manager for fear of discrimination. If you can create a warm and supportive work environment for those who wish to be open about their mental health, you’re already ahead of many other employers. 

4. Flexible work

Gen Z and millennials value flexibility in terms of time and location. Reduced hour work weeks, flexible hours, remote work, hybrid work, or a combination of these will draw them in. A quarter of Gen Z and nearly a third of millennials say that work-life balance is the main deciding factor in taking a job, while nearly one in five cited flexible working arrangements as the primary factor. 

… But Retention is Equally Important

In trying to attract Gen Z and millennials to the semiconductor industry, it’s also important to try to retain them. The main reasons Gen Z and millennials give for leaving jobs include not enough pay (26% of Gen Zs and 29% of millennials), lack of advancement opportunities (16% of Gen Zs and 22% of millennials), feeling burned out (14% of Gen Zs and 17% of millennials), and to protect their mental health from a job they felt was detrimental to it (14% of Gen Zs and 18% of millennials).  

Looking at the statistics, to retain these generations you want to make sure you’re valuing them appropriately through competitive pay and clear advancement opportunities. You also need to ensure they are supervised by leaders who prioritize mental health, can recognize early signs of burnout, prevent overwork, and create a supportive work environment. 

Attracting Talent from Other Industries to the Semiconductor Industry

When it comes to executive search in a tight labor market, companies are going to find themselves asking, “Why limit ourselves to our own backyard?” And it’s a good question because there’s a whole ocean of skilled and highly experienced professionals out there in other industries, just waiting to be reeled in. 

But when fishing for talent in other industries’ ponds, it’s all about knowing which skills are transferable. So, what are these ever-important transferable skills? 

• Experience with precision manufacturing and quality control 
• Expertise in managing complex supply chains 
• Ability to integrate advanced technologies into production processes 

These align closely with skills prevalent in other industries like the automotive industry, pharmaceuticals, and aerospace. 

But what executives transitioning from one industry to another will need more than anything else is adaptability. And the numbers speak for themselves: 71% of corporate leaders believe the most important leadership quality you can have is adaptability. But how do you know a leader is agile enough to make this transition? Keep an eye out for these three signs: 

• A history of successfully leading change initiatives or turnarounds 
• Evidence of quick adaptation to new technologies or market shifts in their previous roles 
• Demonstrated ability to build and lead diverse, cross-functional teams 

When it comes to filling gaps in a semiconductor company’s leadership, sometimes the best way to think outside the box is to bring in someone who’s mastered a different box altogether. Executives from adjacent industries offer fresh perspectives, innovative approaches, and valuable cross-sector insights. 

How to Get Started with Finding Semiconductor Talent Among Gen Z, Millennials, or Other Industries

When it comes to attracting new talent to your semiconductor company, whether it’s Gen Z, millennials, or executives from adjacent industries, the single most effective strategy you can employ is building a culture of storytelling around why top talent should choose you. A strong talent brand reduces cost-per-hire by up to 50% and lowers turnover rates by 28%. 

But storytelling alone isn’t enough—you need to meet potential candidates where they are, and in 2024, that’s often online. Most job seekers turn to online platforms to evaluate potential employers, with more than eight in 10 consulting company reviews and ratings before applying. Three-quarters of active job seekers are also more inclined to submit applications to companies that proactively manage their employer brand. This means your online presence and reputation play a big role in attracting top talent.  

Invest in your digital footprint, encourage honest reviews from current employees, and showcase your company culture across various platforms, and you’ll find it easier to attract the kind of talent you need.

About the Author

Jan-Bart Smits is a Managing Partner at Stanton Chase Amsterdam. He began his career in executive search in 1990. At Stanton Chase, he has held several leadership roles, including Chair of the Board, Global Sector Leader for Technology, and Global Sector Leader for Professional Services. He currently serves as Stanton Chase’s Global Subsector Leader for the Semiconductor industry. He holds an M.Sc. in Astrophysics from Leiden University in the Netherlands. 

David Harap is a Managing Director at Stanton Chase Austin, bringing over 25 years of executive search experience to his role. He has successfully placed hundreds of senior executives and functional leaders across various industries. A Cornell University graduate and Father Kelly Scholar, David lectures at the University of Texas at Austin. He is a certified Ambassador for Hofstede Insights, bringing unique insights on organizational culture to his work.

Greg Selker is a Managing Director at Stanton Chase, the Regional Sector Leader for Technology in North America, and the Global Subsector Leader for Growth Equity. He has been conducting retained executive searches for 33+ years in technology, completing numerous searches for CEOs and their direct reports at the CXO level, with a focus on fast growth companies, often backed by leading mid-market private equity firms such as Great Hill Partners and JMI Equity. He has also conducted leadership development sessions with more than 50 executives from companies such as BMC Software, Katzenbach Partners, NetSuite, Pfizer, SolarWinds, Symantec, TRW, and VeriSign.