Elisabetta Bartoloni, is an expert Financial Services Executive Recruiter & Advisor and Head of Global Markets at Heidrick & Struggles.
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The increasingly competitive landscape demands that PE firms continuously innovate and seek new strategies to maximize returns, prompting the question: How can private equity (PE) firms help their portfolio companies hire and manage top talent?
Attracting and cultivating top talent is undoubtedly essential for any organization's success, particularly in times of uncertainty: 67% of organizations said recruitment was their top concern, according to a 2022 AlixPartners survey. One often-overlooked area where PE firms can differentiate themselves is with human capital, specifically when it comes to helping their broad array of portfolio companies hire and retain the best talent.
The Problem
PE firms typically utilize executive search firms for hiring top talent and believe that retaining these experts as consultants is sufficient. However, these efforts may prove sub-optimal if the other individuals involved in the search, both at the PE firm and the portfolio company, overlook the fundamental elements required to conduct an efficient and successful search process.
The Solution
There are exciting new technologies that PE firms can leverage to train and empower employees across their portfolio companies to optimize the day-to-day execution of the hiring process. In so doing, these companies can effectively capitalize on recruiting consultant expertise, maximize their hiring potential and achieve the desired outcomes.
In particular, the use of digital interactive training (DIT) enhanced with AI tools like ChatGPT, an AI-powered language model, has the potential to be a game changer in the recruiting process. These technologies can create a streamlined and consistent governance framework across multiple companies when they are appropriately designed and monitored by individuals who have deep understanding and experience in the recruiting process, including the typical pitfalls that arise in hiring.
Here are four key ways in which digital interactive training content and AI can help PE firms and their portfolio companies engage with their employees to maximize the hiring and retention of key personnel.
Four Ways DIT And AI Can Help With Recruitment
1. Demonstrating Company Values And Culture
Through DIT content, companies can better communicate their values and culture, thereby reinforcing the organization's mission and vision. When training materials are aligned with company values, employees are more likely to feel a strong sense of purpose and commitment to the organization.
Digital training platforms can incorporate interactive elements, such as quizzes, simulations and social learning tools, which promote employee engagement and collaboration. These interactive features create a more immersive learning experience and facilitate knowledge sharing and problem-solving, fostering a sense of community and belonging among team members.
I am a big fan of an interactive platform I have been using to engage and understand large groups of people (online and in real time). The platform uses artificial intelligence to understand and segment employee responses as they happen. Through these digital conversations, my organization gets valuable, candid feedback and insights from our clients' employees to address challenges, identify improvement areas and take opportunities to make an organization's culture stronger and employees happier.
2. Diversity, Equity And Inclusion
According to Heidrick & Struggles' 2022 DE&I Survey, 93% of executives stated that DE&I matters more now than it did three years ago. By offering training modules focused on unconscious bias, cultural sensitivity and inclusive leadership, digital training platforms can help firms foster an environment where employees and candidates from all backgrounds and levels of seniority feel valued, respected and encouraged to contribute their unique perspectives.
Additionally, by leveraging AI tools to analyze résumés and cover letters impartially, these platforms can counteract unconscious bias based on gender, ethnicity or background in the hiring process. ChatGPT can also be used to create more inclusive job descriptions, attracting a broader talent pool.
By thoughtfully using these tools, firms can access a more diverse, skilled workforce, ultimately contributing to their long-term success and growth.
3. Recruiting Process Design
DIT can help transform the entire portfolio company hiring process. In particular, video tutorials are effective tools to train senior management in the structure of a successful recruitment process, including the selection and engagement of the internal hiring team, the intricacies and sensitivities of dealing with internal candidates, the typical process structure (e.g., number of interview rounds and interviews within each round) and ultimately the terms and structure of an employment contract.
DIT can also train employees on interviewing candidates, following DE&I protocols and responding to sensitive questions, all of which help optimize the candidate experience.
When turbo-charged by AI platforms like ChatGPT, this content can facilitate an improved recruiting design by automating various aspects of the process, such as scheduling interviews and answering candidates' inquiries. By automating these tasks, PE firms can reduce the time and effort spent by portfolio company management on administrative duties and allow their recruitment teams to focus on more in-depth engagement with candidates and making more informed hiring decisions.
4. Identifying Future Leaders
There are new tools that employ AI-powered intelligence to help make better data-driven internal and external talent decisions. Heidrick has developed a new approach to leadership intelligence called Heidrick Navigator, a platform that is intended to measure and predict a leader's ability to drive business outcomes. These and other AI tools can be designed to identify future leaders, as well as potential leadership gaps, within the organization.
Conclusion
Digital interactive training content and AI can serve as powerful tools for bridging the gap between attracting top talent and successfully executing a hiring process that results in the desired hire, as well as identifying, managing and cultivating future organizational leaders.
Have you implemented digital training content and AI tools in your recruitment process for portfolio companies?
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