Role call: head of talent

As a perfect storm appears to be brewing with a maturing PE industry, increasing competition among firms for deals and the role of globalisation in shaping the talent market, more and more emphasis is being placed on the value of human capital.

It is in this context that the rise of head of talent or chief talent officer (CTO) as a key senior role should be considered. Recent years have seen GPs prioritise the value of human capital both internally, in the firm itself, and externally, within portfolio companies.

This is why the role can vary in responsibility, bifurcating depending on the emphasis on attracting and retaining talent in-house or in the portfolio. For some PE firms, one senior individual is responsible for both. The role can also vary depending on whether the individual focuses on organisational design, management performance, or talent acquisition.

Dean Terry, head of HR and legal practice at PER, explains the essence of the chief talent officer: “The role is primarily about centralising and growing the fund’s talent pool of executive-level candidates and appointing those individuals into the existing or new portfolio companies. Depending on the share, this can involve a full takeover by restructuring the C-suite members of that company. This can be achieved directly through the funds network, direct sourcing or through a collaboration with search firms. Throughout this process and beyond, the CTO will also work with the portfolio company from a talent advisory and people partnership perspective.”

According to Terry, there is more demand for portfolio-focused CTOs than their internally-focused equivalent in the current market, as many firms have slowed down their internal hiring processes.

That being said, the objective of creating value through people management is at the forefront for many PE houses and the way in which they go about achieving this can vary significantly.

Emerging roles
Many mid-market GPs are in the relatively early stages of recruiting heads of talent, in some cases appointing heads of talent for the very first time. Four years ago, this was the case for Alison Ettridge, head of talent at FPE. She joined the firm in 2019 and, alongside her talent role at FPE, she leads the labour market analytics software company Stratigens, which aims to empower people-driven strategies using workforce data. She believes FPE “recognises the importance of having a strong leadership team and the impact that has on value creation, and not all PE firms share that emphasis”, adding: “There was a need to hire a talent specialist who knew the importance of human capital. Focusing on talent was an obvious progression from the work the team was already doing.”

Ettridge’s responsibilities primarily lie in bringing leadership talent into high-growth potential portfolio businesses, working simultaneously with the internal investment team and the portfolio companies. She also provides talent acquisition advice and hiring support to the portfolio businesses upon request.

Similarly, Kerry Heaton joined Hg in the newly-created role of head of talent at the beginning of 2022, before being promoted to chief people officer at the end of the same year. Although, like Ettridge, Heaton filled a new position, her role very much focuses on internal hiring and talent retention at Hg.

She comments: “In my role at Hg, I’m responsible for attracting and recruiting external talent globally, but equally as importantly, I’m responsible for the development and retention of our internal talent, and I lead our D&I agenda. I help our senior leaders think about what the business will look like in the future and what capability we’ll need to achieve our strategy.”

In Heaton’s case, achieving value within the firm stems from truly understanding the future needs of the business and having those needs drive all of the talent activity.

Alternatively, Ruby Biring joined Livingbridge as head of talent in 2017 – a new role for her but not for the firm. She explains that Livingbridge is in its third generation of talent management, which is the one she leads. She adds: “My team and I focus on equipping our portfolio companies with the tools needed to grow, from guiding them through recruitment processes, to building high-performing leadership teams.”

Talent acts as a lever in Livingbridge’s growth acceleration team, which consists of experts who are responsible for creating strategies to deliver certain growth targets.

Overall, these three talent(ed) leaders share a job title, but not necessarily a job description.

The ideal candidate
Whether it’s sourcing and retaining talent internally or externally, there are key skills and responsibilities essential for a successful head of talent:

• Ability to build a network
• Willingness to promote a strong brand message to market leaders
• Responsible for engaging with the bench of talent (both internal and external)
• Proactive nature, which helps source valuable conversations
• Accountability for the success of the GP or portfolio company
• Able to understand the importance of organisational design
• Analytical skills to identify any inefficiencies as well as key cultural dynamics
• Ability to work under pressure and tight time constraints
• A good communicator
• Proficient in using and understanding data to enhance search processes
• Possession of an investor mindset
• Inquisitive and curious nature
• Able to promote growth for the long term.

The variety that comes with the role means it can be hard to source the perfect candidate who possesses all of the above characteristics.

Key challenges
In an increasingly competitive market, time can be a constraint for heads of talent, as there is an acute need to strike while the iron is hot. This means needing to be continuously up to date with the market around you.

Ettridge explains: “If you think about things like globalisation, skills shortages, low unemployment, digitalisation and the competition for skills, all of those things have combined to make it harder than ever to have the right people in the right place at the right time. These macro factors have come along and made it difficult for scaling businesses, and created an environment of competition in PE houses. This naturally affects how you go about attracting, hiring and retaining talent.”

Heaton comments on the increasing expectations around talent from LPs. She surmises: “Investors are rightly expecting us to be more thoughtful about our approaches to people development, and focus seriously on our D&I and ESG responsibilities. This means having somebody dedicated to these areas is a real differentiator. The firms that are investing in this will outperform the others.”

Having a strategy that acknowledges the value added by the people in your organisation(s) can help to bring that competitive advantage to investors, portfolio companies and employees future and present.

Data drives diversity
Harnessing data can be a great way to understand the diversity needs of portfolio companies. Ettridge’s other role as CEO at Stratigens is highly complementary and she explains why this is important: “Stratigens is a labour market analytics software tool that joins the dots between labour market, location and economics to support smarter workforce planning, and I certainly use it as part of my role. It's about bringing data to the forefront of our thinking about human capital. It also helps inform where the talent pools our portfolio companies will need to fuel their growth are, and competition they will find for that talent. We can also find out the external market availability of diverse talent.”

Another way firms can strive for diversity and inclusion is by implementing unbiased interview practices as part of the recruitment process. Biring adds: “While at Livingbridge we do not hold the strategic diversity agenda for each of our portfolio businesses, we are committed to putting in place a diverse board. When we start building our board teams, we try to remove bias from our recruitment process and request a diverse shortlist from our partners. So, we ask for a minimum of 50% of the candidates on any shortlist for any search to be from diverse backgrounds, which can encompass any aspect of diversity, rather than focusing on a single cohort. It becomes challenging when you're trying to drive value creation in such a short period of time, where you might not have the luxury of having an open vacancy for a year while you wait for the perfect candidate. You have to be quite creative when thinking through the board composition.”

Finally, Heaton addresses the need to harness data to fully measure improvement, and the importance of accountability: “If you measure something, it tends to get attention. We publish our D&I progression regularly externally to our investors and quarterly to our board. For us, it is a business imperative rather than simply a HR initiative. Sponsorship from senior leaders is critical and everybody has a role to play in driving diversity forward.”

Ultimately, heads of talent across the industry are continuously harnessing new methods to assist them in achieving growth through human capital. While macroeconomic factors continue to complicate the process, data can be one way in which to navigate the talent opportunities available.”

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Current heads of talent in PE

Name: Alison Ettridge
Firm: FPE Capital
New role for GP? Yes, created in 2019
In-house or portfolio: Portfolio
Previous experience: Talent acquisition roles, working with global corporations. Also current CEO of Stratigens from Talent Intuition, a labour market analytics software company that provides global workforce data.

Name: Ruby Biring
Firm: Livingbridge
New role for GP? No
In-house or portfolio: Portfolio
Previous experience: Managing director at Sheffield Haworth, which involved leading the global technology and digital practice, providing talent advisory and market insight services, and leading the executive search business.

Name: Kerry Heaton
Firm: Hg Capital
New role for GP? Yes, created in 2022
In-house or portfolio: In-house
Previous experience: Twenty years of banking experience in various people roles. Last role before joining Hg was global head of executive talent at HSBC, running recruitment and talent operations for the top 200 execs across the group.