The Covid-19 pandemic brought about a significant shift in how we work – for some, it accelerated plans that were already underway towards a more flexible work environment; for others, it was a case of playing catch up and adapting as quickly as possible.
While it would be a gross oversimplification to say that private equity doesn’t have the greatest reputation for embracing flexible working, given that it covers such a wide range of sectors and business types, there are certainly lessons PE can take from the success stories of others.
Before the pandemic, only about 7% of PE workers were working from home – with more than three-quarters of this number being senior staff members. And, while the pandemic certainly accelerated the route to flexible working for many, it is probably fair to say that private equity is still slow to embrace flexible working, with just 25% of employees, on average able to work remotely post-pandemic.
On the whole, PE seems surprisingly unengaged in the topic of flexible work compared to other companies who have taken the opportunity to embrace working from home. Almost half of the people filling out this survey said they would like the option of at least one or two days of remote work. A gap of 25% when looking at the numbers actually working remotely.
So, if you are resisting the move towards flexible working, what could you be missing out on?
What is flexible working?
First, flexible working isn’t all about working from home. It’s probably the aspect that has got the most attention since the pandemic, but flexible working could also entail a whole raft of working arrangements that allow employees to have more control over their working lives.
This could include:
- Working compressed hours (5 days condensed into 4),
- Part-time hours (working fewer hours than full-time),
- Flexible hours (working around childcare, etc., rather than traditional 9-5),
- Staggered hours (working hours of one employee moved back compared to other workers),
- Annualised hours (employee agrees to work certain hours over the course of a year but has flexibility around when they do that),
- Job sharing (one full-time job shared between two individuals),
- Phased retirement (gradually reduced working hours for people who are not ready to leave work fully but would benefit from lesser hours for health reasons or so).
All of these arrangements allow employees to have more control over their working hours, which can have a significant impact on their well-being and job satisfaction. This 2021 CIPD research shows how the uptake of certain ways of flexible work has changed in the years between 2010 and 2021. The change in attitudes, particularly amongst younger workers, means that the need to change is inevitable. But what exactly are the tangible benefits of embracing flexible working?
Benefits of flexible working in private equity
Promotes a healthy work-life balance
Flexible working arrangements allow employees to work in a way that suits their individual needs, which can help promote a healthy work-life balance. This can help reduce stress and burnout, leading to a happier and more motivated workforce.
Flexible working has been proven to help when it comes to employees being able to switch off and enjoy time away from work to de-stress and reduce burnout. A recent Health and Safety Executive survey from Labour Force shows that over a year-long period, 1,780 cases were reported of workers suffering mental health problems caused by their workplaces. Overall, the people who had the option to choose to work from home felt that it was beneficial for their well-being and mental health.
It’s all about balance, however, as a lot of workers who have found themselves at home full time because of Covid-19 found they felt less connected to their colleagues and more isolated.
Attracts top talent
In today’s competitive job market, flexible working arrangements can be a key factor in attracting and retaining top talent. According to research, 73% of employers say that flexibility in work environments is required for staff retention and attraction, as well as having a more satisfied staff overall. A good in-house recruiter will be able to help you position your flexible working arrangements to maximum effect in the candidate attraction process and help you find previously untapped sources of talent.
Flexible working arrangements have been shown to increase productivity, with employees reporting fewer distractions and a clearer, more peaceful mind. Why? With reduced commute times and increased work-life balance, employees are finding solving issues outside of work easier and so are not only having more time for focussed work they are also less distracted by outside issues while at work.
66% of remote employees feel they are more productive at home and 76% said there are fewer distractions than at the office. However, it’s important to note that productivity benefits are not solely limited to remote working arrangements – giving flexibility on hours for childcare or working 5 days in 4 can not only increase productivity but open up whole new pools of talent that were previously unattainable.
Progression in work for women and increased diversity
Flexible working arrangements can open up your pool of available talent – by offering flexible working arrangements, groups who are possibly unable to commit to rigid schedules, like carers or those experienced people looking to reduce their hours, can be great additions to your teams, bringing fresh perspectives and much-needed experience.
Flexible working can be particularly beneficial for women. Although we like to believe the UK is a nation of equality, women still bear the biggest burden when it comes to childcare and other caregiving – with over half of working women going 45 hours of unpaid caregiving a week! The Charted Management Institute found that many women find it difficult to progress in their careers as much as their male counterparts, saying their other caregiving roles stopped them from being available at traditional working times or being as focused on the goal when they are at work. Flexible working helps these employees to thrive by allowing them to work effectively around these responsibilities.
The move towards flexible working in private equity
If well-known tech organisations like Google or Salesforce and large consultancies like EY and Accenture are able to accommodate flexible working, then the question remains – why is the private equity space lagging behind?
Over the past couple of years, there has been more acknowledgement of the fact that PE is one of the most suitable industries to allow flexible working. As Jacob Gold – a Private Equity and digital economy associate at Ashurst LLP – said, it is a “good fit for private equity” and that flexible working structures “are ripe for the shorter-term growth model that private-equity investors can offer”.
But that’s not to say there haven’t been high-profile successes with PE companies embracing flexible working. Take Blackstone, one of the largest private equity firms in the world, for example. Blackstone has implemented several flexible working policies to accommodate their employees, including the ability to work from home, flexible hours, and job sharing.
During the COVID-19 pandemic, Blackstone moved quickly to implement a fully remote work policy, which allowed their employees to work from home. Additionally, Blackstone has offered their employees mental health support and resources, recognizing that the pandemic has been challenging for many people.
Blackstone’s embrace of flexible working is an example of how private equity firms can adapt to changing circumstances and prioritise the well-being of their employees.
Another example of a private equity firm that has embraced flexible working is Hg, a UK-based firm that specialises in software and technology investments. In response to the COVID-19 pandemic, Hg implemented a range of flexible working arrangements for its employees, including remote working, flexible hours, and reduced workloads.
According to an article by Private Equity News, Hg’s CEO Nic Humphries said that “flexibility is key” and that the firm has been “able to maintain productivity and progress with new deals and portfolio company value creation” while also prioritising the health and well-being of its employees.
So, how best to start your own journey towards greater flexibility at your PE company? A good first step is to conduct an internal survey of your current employees. Find out what their perfect flexible working environment would be. Examine the range of responses you get and determine which might be workable.
Transparency and honesty are needed from both employer and employees for this to work – so make sure to communicate the reasons you are doing this, set expectations early around what you might be able to accommodate in the beginning but stress it’s a journey and openness will be welcomed rather than punished.
As a manager in a private equity firm, it’s time to consider the benefits of flexible working for your company and employees. By providing a range of flexible working arrangements, you can attract and retain top talent, promote a healthy work-life balance, increase productivity and help women progress in their careers. So, let’s embrace flexible working and reap the rewards!
The Small Consultancy is a specialist provider of in-house recruitment to private equity and private equity-backed companies. We’ve supported companies going through rapid scaleups, complex carve-outs and acquisitions to ensure they have the right people in the right places to meet their growth targets. Find out how we can help your private equity company and its portfolio navigate the challenges of growth with agile and scalable in-house recruitment.