Thinking Beyond the C-Suite Pays Off – Well, At Least Sometimes
HUMAN CAPITAL MANAGEMENT IN LARGE PRIVATE EQUITY VALUE CREATION
AT A GLANCE
In 2023, the Ford Foundation Mission Investments team supported research investigating the value of human capital. This project, conducted by the Workforce & Organizational Research Center (WORC), sought to examine the extent to which human capital management plays a role in value creation plans at large private equity firms, specifically those with more than $5 billion in assets under management (AUM).
The most important finding of this research is that human capital management in large private equity firm value creation is all about the C-suite — until it isn’t. Where lower-level workers are the fulcrum for executing a specific value creation strategy for a deal, large private equity firms may pay particular attention to human capital management at the bottom of the org chart.
There is an opportunity for the job quality field to catalyze private equity firms to optimize human capital management by developing a playbook for deals where lower-level workers are critical to value creation. This research suggests that investigating and building case study evidence from innovative private equity firms whose primary investment thesis centers on improving job quality beyond the C-suite is a pathway to achieving this goal.
