Lisa Farmer, Boyden UK Managing Partner, shares seven key takeaways from Hunt Scanlon's Private Equity Recruiting conference, including the importance of talent decisions, workplace culture, and building a talent network.
In the fast-paced world of private equity, with talent a critical driver of success, staying ahead of the curve in hiring and talent management practices is not just advantageous—it's imperative. Through our clients, candidates, and vast networks, we acquire unique insights, staying connected to critical and diverse talent issues that propel our work forward.
Continuing on that note, I had the opportunity to attend Hunt Scanlon’s recent event, Private Equity Recruiting: The Talent Advantage. This exclusive conference, held in London, brought together influential private equity leaders, chief talent officers, and executive recruiters who gathered to discuss the rising challenge of unearthing game-changing talent for portfolio companies.
An especially notable presentation was delivered by Maria Capozzi, Partner at McKinsey, on CEO Alpha: A New Approach to Generating Private Equity Outperformance. Capozzi's presentation emphasised the importance of talent decisions and highlighted the three pillars of effective talent management: building a fit-for-purpose team, delivering a value concept plan, and placing the best talent in high-value roles.
Reflecting further on the sessions and discussions, I share seven key takeaways garnered from the experience:
McKinsey's research revealed that 71% of CEOs are recruited externally, and turnover rates for CEOs within private equity are higher compared to other industries. To achieve outperformance, private equity firms must focus on talent decisions, regular performance reviews, and providing support and sponsorship to CEOs.
With limited deal flow and delayed exits, private equity firms are seeking robust talent assessments to support their leaders and portfolio businesses. They are recognising the need for organisational effectiveness, leadership consulting, and inclusive talent assessments.
The next generation workforce values work-life balance and dual careers. Some firms are incorporating "Active Recovery" into meetings (time for reflection) and prioritising health and wellness initiatives to foster a positive culture.
The importance of human-centred leadership was emphasised, which involves trust, empowerment, high emotional intelligence (EQ), and building an inclusive culture aligned with business goals and effective communication are crucial.
Private equity firms are continuously looking for valuable talent for the future. Continuity and deep market knowledge are key factors. Utilising technology and sector events, as well as partnering with industry advisors and head-hunters, helps in sourcing the right talent.
Private equity firms focus on building teams that will scale the business over a 4-6 year period. Onboarding, continual assessment, and deep functional NEDs (non-executive directors) play crucial roles in supporting leaders and unlocking value.
Effective talent development includes a combination of on-the-job feedback, social learning, coaching, mentoring, and formal learning programmes. Technological tools and curated content enable leaders to access learning resources conveniently.
These fundamental aspects are reflected in the work undertaken with Private Equity portfolio companies. We have observed a growing demand from PE firms seeking assistance in their critical recruitment endeavours. Additionally, they are keen to collaborate with our Leadership Development Partners to enhance team performance and effectively utilize assessments to support their portfolio businesses on an international scale. We are also seeing more utilisation of interim management capabilities particularly across CEO and Finance functions.
For further discussion or any questions please feel free to reach out to Lisa Farmer.