In this uber-competitive environment for managing its workforce, PE firms need to focus on the human element when it comes to building winning leadership teams, retaining talent and dealing with personnel shortages.
Those were the key take-aways when Mergers & Acquisitions sat down to speak with talent development, recruitment and retention professionals at its recent PE Leadership & Talent Development MEET conference in New York City.
Building Winning Leadership Teams
The competition for talent has reached an all-time high as firms scramble to keep up and build successful leadership teams. Companies are being forced to change the way they recruit.
Gemma Gucci, a managing director and global head of talent acquisition, Apollo Global Management, says this new environment has pushed PE firms like hers to have a laser-like focus on what they need.
“Every candidate that we interview is interviewing with other people,” Gucci says. “The market is moving incredibly quickly. You really need to know what you are looking for so that you can respond to the fact that your top choice might have other offers. Really drill down on what you are looking for so that you can close quicker.”
Private equity firms are increasingly turning to talent management professionals to help improve their human resource management.
Michelle Nasir, a chief talent executive with Arsenal Capital Partners, explains. “Talent leaders are spending more time being consultative to management, helping them uncover the core of what they are really looking for to be more focused and thoughtful in debriefs and selecting the best search firms. I think this is helping with effectiveness and speed.”
Firms are beginning to relax on title requirements, while instead focusing on a more holistic approach to human capital recruitment. Nasir says recruitment professionals are shifting their focus to functional capabilities in order to expand and create talent pools.
“We are helping search partners let go of some of their ways of filtering candidates. It is not about which school you went to; it’s really about your whole story. Are you paying your way through college? Are you a go-getter? Do you have great grades? Is this a career you want? Have you shown some interest? We don’t need everyone to have the same profile, like being an athlete from an elite school. We want to see a broader set of capabilities.”
Creating Effective Talent Retention Programs
Building culture and instilling an empathetic leadership style can lead to better talent retention, according to the experts.
Firms are finding that while they had to begin adjusting even pre-Covid, the focus now post-Covid is on increasing flexibility in schedules. Businesses are beginning to understand that where employees want to do the work tends to matter more as long as the work gets done.
Jimmy Holloran, a partner with ParkerGale Capital, believes that more so than ever empathy is needed in keeping employees happy and engaged. “Having empathy and understanding that people have their full lives has way increased in its importance in what it means to be a CEO in the post-Covid world.”
It is not enough to dole out the high salaries and close a high volume of deals, he says. Instead, firms are looking inward and challenging their previous philosophies on making employees feel valued and fulfilled. Human resource professionals believe that cultivating a sense of community, engaging employees in a positive way, and being more hands-on in employee engagement can be beneficial and boost morale.
Firms are making the most of “the having fun factor.” They are doing more in-person bonding experiences whether it be socials, thirsty Thursdays or other activities that brings the team together. Private equity firms are having forums and one-on-one conversations, increasing the frequency of touches to make sure that they understand what is on their employees’ minds. Panelists noted that while some of their professionals are very smart and hardworking, some may be a little more reluctant to say something is bothering them and firms don’t want to find that information when they turn in their resignation after it’s too late.
Post-Pandemic Human Capital Transformations
Competing with other firms to hire the best candidates and then keeping those employees happy has kept HR professionals awake at night. The pandemic has thrown an additional wrench into the human capital equation, as firms are adapting and bringing new strategies to light. In the post-pandemic world, firms are looking to provide a sense of belonging, a sense of human touch, and an evolved sense of empathy.
Pericles Mazarakis, a managing partner with Trispan, detailed one of his biggest takeaways from the pandemic’s effect on human capital management.
“How do you reinforce culture? I think with a lot of us we took it granted,” Mazarakis says. “People came in at nine on a Monday morning and left late on a Friday afternoon. And with the pandemic, we went and adapted through Zoom calls. It really made us think how you build culture as a way to really get people to feel connected and engaged to what they are doing.”
Shelby Hundly, a vice president of strategic talent management, MiddleGround Capital, noted that candidates are looking for their firms to provide more than traditional compensation as well.
“It’s looking at the complete package. Yes, we are benchmarking compensation but now you have to think of benefits, you have to think of flexibility. Can they work remote two or three days a week? Can they commute so they don’t have to relocate? So no longer is it just about the dollar. It is about the complete day-to-day lifestyle of that employee going forward. And that is what candidates are taking into consideration when looking into roles. So, it’s being more mindful of everything you offer versus just that dollar amount.”