The past two years have seen notable shifts in global Chief People Officer (CPO) hiring, but perhaps the most striking structural change is the rise in sector‑specific appointments.

Our 2026 CPO Pathways report shows cross‑sector mobility has dropped sharply, with 82% of CPOs now hired from within the same industry, up from 73% only a year earlier. I am not surprised as this pattern has emerged during a period of falling overall appointment volumes (down 21% globally and 34% in the UK), a resurgence in external hiring, and continued pressure from Boards, particularly in PE‑backed environments, for immediate impact. Together, these forces are reshaping expectations for CPOs and narrowing the selection criteria.

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Sector-specific hiring is a topic I discuss regularly with Chief People Officers. I am confident that the majority of people leaders I speak to would agree they are sector-agnostic and would welcome the opportunity to move to a new sector, finding it an interesting challenge and embracing the chance to offer diversity of thought for a new organisation.

We tend to find that, generally, the interim market is more accommodating of sector moves, and delivery of project work is (in the majority) more about skill set, capability, and execution than sector experience. In the permanent job market, however, companies are more risk-averse, making a cross-sector move harder, even though CPOs would be very capable of delivering business objectives successfully.

So what are the underlying drivers, the risks, and rewards of sector‑specific hiring? And is hiring outside of sector healthy for organisations in the long term?

Why are Boards increasingly hiring from within the same sector?

Chief People Officers have traditionally moved quite fluidly across industries, more so than CFOs or COOs, but the market is now behaving differently. When discussing the brief for a CPO role, despite global volatility and the need for fresh thinking, most conversations I have increasingly request candidates from the same or similar sector. Part of the conversation is always to understand why, what impact this would have, and to discuss the considerations of out-of-sector candidates; however, Boards still seem to gravitate towards candidates who have navigated their exact industry conditions. Even if they don’t necessarily want to. There are often several reasons behind this:

• Slower economic conditions, especially across the UK and Europe, have led to more cautious hiring. With appointment volumes down and PE deployment still high, Boards are under pressure to back leaders who can deliver quickly. A CPO with direct sector experience, for example, reduces a perceived onboarding risk. They understand workforce models, regulatory environments, reward norms, and talent hotspots from day one.

• Private Equity continues to drive nearly 40% of all CPO appointments. PE owners typically prioritise speed, certainty and previous experience; they want CPOs who can influence EBITDA through organisational levers. Sector experience is seen as a shortcut to certainty, meaning candidates can hit the ground running with quicker impact.

• External hiring is at an eight-year high of 71%. However, the majority of those moves were from within the sector, demonstrating that although Boards would like external talent, they are keen to minimise risk by hiring in sector and bring competitor knowledge as well as ways of working.

Overall, Boards are not only becoming more specific on the search criteria; they are becoming more conservative. It feels like this is very much down to risk versus reward and can depend on the company ownership model, previous results and how bold the leadership team is when implementing change.

Advantages of hiring from outside the sector

Digital skills, workforce flexibility, and leadership capability are all transferable. Over‑weighting specific sector experience risks missing exceptional leaders who could bring new thinking from adjacent industries.

In recent months, I have seen successful CPOs make moves out of the sector, from Healthcare to Utilities, Telecoms to Banking, and from Engineering to Healthcare, all of whom have made a big impact, made a change for the better, and led the businesses they have joined through new ways of thinking and working.

• Hiring from outside the sector can broaden diversity and unlock untapped talent pools. Women represent 71% of global CPO appointments, yet if Boards focus only on sector-specific external candidates, they may unintentionally narrow gender and ethnic diversity, particularly in male-dominated industries. Looking beyond the sector opens access to talent that would not otherwise be considered.

• Looking outside the sector expands the talent pool when internal pipelines fall short. Internal successions have dropped sharply, from 53% to 29% in just three years, reflecting overstretched HR functions, limited succession planning, and senior-level burnout. Where internal successors lack readiness, Boards often default to external candidates who ‘look familiar’; however, widening the search beyond sector brings in equally capable leaders who can quickly navigate new landscapes and deliver against business objectives.

• Hiring from outside the sector can bring diversity of thinking and a new approach, particularly during times of transformation. Boards often assume sector familiarity is the safest route, but in reality, it can be riskier. Leaders deeply rooted in the same sector norms may struggle to challenge the status quo effectively.

• Hiring from the same sector can reinforce outdated thinking, while cross-sector hires drive agility and transformation. Many industries face similar challenges – digitalisation, cost pressure, leadership fatigue, and shifting employee expectations. Staying within sector can limit exposure to new ideas, whereas organisations that hire from outside often demonstrate greater agility, faster growth, and a stronger ability to pivot.

Is the in-sector hiring trend healthy for businesses? 

As more Boards demand the same narrow profile, talent pools become congested. This inflates salary expectations and lengthens search processes. It also creates misalignment between what businesses want and what the market can supply. I have seen this over the past couple of years, searches that should ordinarily be relatively straightforward, take two or three times longer as the candidate pool from within sector is so limited, businesses have to adjust other criteria to accommodate talent available.

In the short term, particularly in a volatile and uncertain business environment, this preference for sector-specific candidates is understandable. Ongoing economic pressure, tighter capital conditions, and heightened scrutiny from investors and stakeholders mean leadership teams are under increasing pressure to deliver immediate results.

However, as a long-term pattern, it carries risks. Innovation and organisational change often come from out-of-sector talent. The decline in cross-sector mobility suggests a market defaulting to safety rather than strategic foresight.

Shifting mindsets: From caution to capability

Over the past decade, I have observed a clear shift in sector-specific hiring. In buoyant markets, when business is thriving and profits are strong, companies are more willing to take risks and demonstrate flexibility in recruitment. In contrast, post-COVID, many organisations have faced incredibly tough times, with some companies just managing to stay afloat. Under those circumstances, it’s understandable that leadership teams are cautious about making hires that don’t offer the highest likelihood of success. People are an organisation’s most valuable asset, and getting it wrong can have significant consequences.

A healthy leadership ecosystem thrives on fresh perspectives, diversity of thought, and robust succession planning. Unchecked sector-specific hiring can narrow all three, yet the pressure to deliver performance often makes this hard to challenge.

Do I believe there is capability among Chief People Officers (CPOs) to make cross-sector moves? Absolutely.

Do I anticipate a broader shift away from sector-specific hiring for CPOs? Yes, but it will take time.

I make it a priority to discuss the value of cross-sector consideration in every search I lead, providing CEOs and leadership teams with insights to help broaden their thinking. Most leadership teams I work with are eager to hire the best person for the role, and an encouraging number are open to candidates with cross-sector experience. As successful examples of cross-sector hires build, this shift is likely to accelerate, and this can only be a good thing for longer-term business performance.