New study finds human capital management in large private equity value creation is all about the C-suite - until it isn't
CHICAGO, IL / ACCESSWIRE / May 14, 2024 / The Workforce & Organizational Research Center (WORC) today announced the launch of its new research report, "Thinking Beyond the C-Suite Pays Off - Well, At Least Sometimes: Human Capital Management in Large Private Equity Value Creation."
The research, supported by the Ford Foundation Mission Investments team, examines the extent to which human capital management plays a role in value creation at large private equity firms.
Based on interviews with fund managers, deal team members, and human capital operating partners at seven leading private equity firms, including BlackRock Impact Opportunities Fund and TPG, the findings suggest that human capital management in value creation for large private equity firms is all about the C-suite - until it isn't. Where lower-level workers play a clear and essential role in executing the value creation strategy for a particular deal, large private equity firms will dedicate resources to the bottom of the org chart.
While decades of rigorous human capital management research have pointed to the potential for value creation through improving the quality of lower-level jobs, this strategy is too often overlooked in private equity investments. This new research suggests that, under the right conditions, large private equity firms will embrace this approach.
The research also points to the likelihood of unrealized gains when investors confine human capital management efforts to the C-suite. Where private equity firms dedicate resources to value-capture through improving lower-level jobs, the efforts are likely to benefit investors, companies, and workers alike.
"We hope this research will prompt private equity fund managers, deal teams, and human capital operating partners to take a closer look at the unrealized gains that can be captured by treating lower-level workers as an engine of value creation, not a cost to be minimized," said Ellen G. Frank-Miller, Ph.D., founder and CEO of WORC.
"We're grateful to the investment professionals who generously shared their insights with us and to Ford Mission Investments for their valuable thought partnership. WORC's study supports the case for Patriotic Capitalism by demonstrating that leading private equity firms are reaping financial returns when they improve lower-level work, a strategy that also leads to a more satisfied workforce and healthier communities and families," Frank-Miller said.
For more information, please visit www.worcimpact.com.
The Workforce & Organizational Research Center (WORC) is a woman-owned social enterprise dedicated to catalyzing a thriving economy where every worker has a job worth having.
Contact Information
Ellen Frank-Miller
Founder & CEO
ellen@worcimpact.com
SOURCE: WORC (Workforce & Organizational Research Center)
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