The way private equity firms approach talent management can be the difference between success and failure for the companies in which they invest. PE firms are often tasked with helping with recruiting for their portfolio companies, in order to protect their interests and increase the chances of success for those companies.

Here are some reasons strong talent management is a top priority for PE firms.

1. Portfolio companies benefit when PE firms are involved in recruiting.

A survey of more than 200 mid-market portfolio companies by Kevin Hudson revealed that about 20 percent got help from their PE firm investors with recruiting and sourcing talent for key leadership roles. The same study showed that 88 percent of those companies found the PE assistance to be “very useful.”

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2. PE firms can build a deeper talent pool by recruiting across their various portfolio companies.

PE firms will have contacts with a number of different portfolio companies in addition to their other contacts, and they can access all of these contacts to deepen their talent pool when recruiting. All of the companies with which they invest can benefit from this combined, deeper talent pool.

3. Bad leadership is a fast way to destroy value. 

Most PE firms may not get to make final decisions about who will lead the companies in which they invest, but they can serve in an important advisory role and add value to the process of sourcing leaders in many cases. Some PE firms may even want to hire a recruiter or HR professional to contribute to the process of finding leadership for their various portfolio companies.

4. Private equity firms can be more bold and creative than their portfolio companies.

Equity firms tend to see the big picture better and may be able to put together pieces with which companies themselves are too close and familiar to handle effectively. PE leaders know that success does not come without risk, and many have had enough experience with a variety of companies to know which risks are likely to yield positive results.

5. PE firms need a system for managing talent to be most effective.

It will be nearly impossible to keep track of talent pools and recruit across many different companies without a dedicated system that is specifically designed for this objective. Thrive TRM software can track multiple positions and provide vital information about all candidates being considered for positions anywhere in the portfolio companies.

Furthermore, ThriveTRM’s system allows PE leaders to share networks and candidate information with hiring managers or external recruiters as well as to set permissions so that information is shared with only those with whom you want to share it.

ThriveTRM also has the ability to make referrals to portfolio companies, request or make introductions through the software, and look at all job openings globally. New contacts are easy to import from LinkedIn profiles and resume tracking systems. Discover solutions for VC / PE firms and see what ThriveTRM can do for your PE firm today.