Human capital is a driving force for growth in private equity. A recent BluWave-hosted webinar delved into three leading trends in this service area:
- The rise in human capital investments
- The importance of specialized recruiters
- The value of interim executives
Human Capital Emphasis
The trend of investing in people for growth continues to gain traction.
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“Human capital activity has been steadily growing and reached an all-time high in Q3 of this year, accounting for 49 percent of all activity coming through the BluWave network,” Garoutte said. “It’s the number one trend in the industry.”
This reflects a 20 percent increase year-over-year, underscoring the importance of investing in talent for organizational growth and value creation.
Using Specialized Recruiters
Engaging specialized recruiters is crucial for efficiently filling both executive and non-executive positions, particularly during growth phases.
“They stay up to date on market trends, salary range and emerging skill sets, which is extremely valuable,” Frackt said. “The knowledge allows them to identify and attract top talent who possess the right qualifications and of course, and most important would be a cultural fit to the organization.”
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Value of Interim Executives
Interim executives, especially in pivotal roles like CFOs, CEOs and CHROs, provide stability and continuity during transition periods, crisis management and special projects.
“PE firms have found value in being able to try before they buy. And we’ve seen interims convert to full-time employees about a third of the time internally,” Lee said. “There’s just value in confirming that this person can positively see our portfolio companies in the right direction as well as confirm that they’re a culture fit.”
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The discussion underscored the critical role of human capital in driving growth, indicating the various strategies that private equity firms and their portfolio companies can employ.
BluWave’s invite-only network of human capital resources works with PE firms daily to fill needs related to human capital, as well as a wide array of other service areas.