Private equity executives at firms of all sizes are trying to figure out how to better attract and retain younger staff, resorting to tactics such as offering free lunches and relaxing their dress codes.
Sixty percent of private equity CFOs surveyed by EY said it was at least somewhat difficult to recruit millennial and Generation Z employees — and an even greater proportion found it challenging to retain such talent. The largest private equity firms, those with at least $15 billion in assets, appear to be struggling the most to keep younger employees around, with 82 percent reporting some level of difficulty in retention.
Given these challenges, the vast majority of surveyed executives told EY that they were taking action to better appeal to millennial and Gen-Z talent.
“With an aging workforce, advances in technology, and a constantly changing world, a strategic CFO has to be focused on attracting and retaining younger generation talent,” EY said in its report on the findings.
More than two-thirds of survey respondents said that they had improved their in-office amenities, offering for example free lunches or gym access. Other tactics employed by a majority of respondents included relaxing the office dress code, giving employees flexibility to work from home, and implementing health and wellness reimbursement programs. Meanwhile 45 percent said their firms were offering mentors or career coaching, and 36 percent had instituted formal career road maps or progression targets for employees.
“For smaller funds, which may not have the ability to make significant investments in amenities, more than 70 percent are providing their employees with the flexibility to work from home,” EY reported.
Beyond focusing on young talent, private equity firms have also prioritized diversity and inclusion, according to the EY report. Executives cited increasing gender representation as their top objective in talent management, followed by the goals of creating a more inclusive culture and increasing ethnic minority representation, the survey showed.
Among the surveyed firms, 88 percent said women held less than a third of their front-office positions. “This challenge is even more glaring among the mid-sized and largest firms, where fewer than 10 percent of firms report that they have more than 30 percent of their investment professional roles filled by women,” the report stated.
The back office had higher female representation, with women accounting for more than half of traditional finance function roles at 41 percent of the surveyed firms. However, that figure dropped to 27 percent at firms with assets above $15 billion.
Just under half of executives polled by EY said their firms had set targets for gender diversity, while another 10 percent planned to implement targets. A similar proportion of firms had either set targets or planned to target improvements in ethnic diversity, with the largest funds placing the most emphasis on hiring minorities.
Surveyed executives said they planned to increase the diversity of their firms by recruiting from a broader group of colleges and universities and establishing or increasing family planning policies such as parental leave. Other tactics included establishing diversity groups and adding or increasing health and wellness policies.