‘Be patient and creative’ – recruiter Mary Gay Townsend on hiring and retaining female talent

Recognizing the need to be more inclusive, private equity firms are focusing on hiring women in positions including investing, finance, legal and fundraising.

Private Funds CFO recently sat down with Mary Gay Townsend, founder of recruiting firm Norgay Partners, to discuss the focus on hiring women that she has seen from her private equity clients.

Have you seen private equity firms making more of an effort to hire women?

Yes, overall the private equity industry recognizes that they need to be more inclusive. Firms we know are certainly taking this initiative very seriously and are committed to making diversity hiring a top priority.

PE firms are able to tap into larger pools of talent because companies like investment banks, Big Four accounting firms, management consultants and law firms have made a conscious effort to recruit more females into their analyst programs. Private equity firms have had the benefit of tapping into these talent pools when adding to their teams, and you can really see the impact at the VP and associate levels in PE firms and now, increasingly, even at principal and director levels.

The trend to hire female talent is accelerating across functions within PE, including investing, finance, legal and fundraising. Ideally, we’ll see more women in senior positions in these roles in the not-too-distant future. There isn’t a single private equity firm that we have worked with that hasn’t made hiring more women a priority.

Are there certain roles for which firms are making more of an effort to hire more women?

Companies are making an effort to increase the number of women in senior investing roles. Men tend to be more visible within senior investment teams simply because of the way the firms were set up in their early days and due to the preponderance of male talent within the function. That being said, we are seeing firms taking proactive steps both to promote female investment talent and to recruit senior women onto their investment committees.

There are other areas in private equity where we already see a meaningful number of female leaders, especially in fundraising, finance, and legal roles.

What is driving the trend to bringing in more women in leadership roles?

There are a couple of trends that have driven PE’s desire to add senior level women to their teams. For one thing, LPs demand it. Another is the rise of DEI and ESG initiatives within private equity, which has resulted in firms being more mindful of potential biases in the recruitment process and hiring with the goal of increasing diversity within their firms whenever possible.

What has been the impact of DE&I initiatives?

For me, the biggest impact of these initiatives so far has been building awareness within PE around the importance of diverse teams and inclusive practices. There is no one in private equity that we are working with that is not taking these initiatives seriously. Every firm is working to have best practices in place. There is a genuine effort to make private equity firms more balanced, and firms, as well as investors, are recognizing that having a diverse team improves both the performance of the funds and the culture of the firm.

What steps are firms taking to hire more women and to promote and retain the women that they already have?

It starts with the recruiting process. Now, firms almost universally make diversity a priority when recruiting. They demand a diverse roster of candidates. Firms strive to hire not only the strongest candidate for any given search, but also the candidate that will add diversity to their team.

We have also seen firms make it a priority to retain female talent. If a firm discovers that a high performing female employee is considering other opportunities, they will often make a real effort to keep them. Some incentives we’ve seen firms employ recently to retain female talent include implementing hybrid workplace models, increased compensation (including carry or equity), or promotions into different roles or new management positions. It’s clear that firms do not want to lose the women on their teams and are willing to make the investments that will encourage them to stay.

We also see that, the more firms offer women real opportunities to gain visibility both inside and outside of the firm, the happier, more engaged, and more committed their female employees will be. Firms have also set up mentoring programs for women along with executive coaching and other tools that help women develop their careers. We believe it is the responsibility of firms to put this infrastructure in place.

Firms need to ask their female employees what they need to be set up for success and to feel like their voice is being heard. While compensation matters, at the end of the day, culture and career satisfaction are often the biggest drivers behind employee departures.

There have been a number of improvements in hiring practices and recruitment of women, but are there still areas for improvement?

There are always areas for improvement and some firms are still far behind where they need to be, but if they put a hiring plan in place and recruit strategically, they can make real strides in increasing the number of women on their teams. The most important thing private equity firms can do when recruiting female talent is to be both patient and creative. Firms can do a better job of doing the work required to assess candidates who might have an out-of-the-box background, but who have the skillsets to be successful in the role.

When firms prioritize hiring a female candidate, they sometimes need to be flexible in other areas of the job specification. For example, there might a great candidate out there who has transferrable skillsets, but who isn’t currently doing the exact same job somewhere else.  We have seen creative hires be quite successful, and it allows firms to tap into a wider candidate pool as well as add a unique perspective to the team. Firms cannot underestimate the positive impact diversity recruiting adds to a firm’s culture and we are excited to help our clients make those hires.