At sister publication Private Equity International’s annual CFOs & COOs Forum 2019 in New York in January, we cornered two chief financial officers and convinced them to spill the beans on what their jobs are really like – on the condition of anonymity, of course. Here are their views on talent management.

Do you think about diversity during the hiring process?

Person A: Yes. We’ve been growing at a rapid pace, and we’ve been trying to be very thoughtful about getting pools of people from different backgrounds. In our last back-office hire, I hired somebody without a finance background. It was a right out of school hire – and you could argue they probably should have two or three years’ experience – as a junior, so it was a little bit lower risk. It was kind of an experiment.

“I hired someone without a finance background, It was kind of an experiment”

Was it a hard sell in the business?

Person A: It wasn’t, because they’re open to newer and fresher ideas. We had already built a good platform, and this is somebody who’s going to come in and see what they can disrupt. This is a challenging role for somebody who’s going to wear a lot of different hats and learn a lot of different things.

One of the partners said to me for this search ‘we don’t need any more tall, white guys.’ To be quite frank about it, we do have a certain profile, and we were trying to make sure we were thinking outside the box.

Why is diversity important to your firm?

Person B: One reason is certainly that a number of LPs view it as important; whatever the customer wants, to a certain extent the customer gets. I also think people believe a more diverse investment group will allow you to keep those returns better and have more insight into a broader area of investments, more perspective, so it should only be beneficial.

Person A: Being a smaller manager or a newer firm, there are a lot of emerging manager programs that are specifically targeted toward minority-led managers, female-led managers, so there are incentives out there. If you want to promote somebody to partner, how does that change the face of your firm to an LP? How does that change the dynamic of your business? The incentives are starting to increase as time goes on.

What are you doing – beyond compensation – to incentivize people to come work with you, and stay?

“It’s not necessarily that we’ve got to have free drinks and foosball”

Person B: Compensation is obviously a key driver, but then it’s the work experience, it’s the environment. And it’s not necessarily that we’ve got to have free drinks and foosball; it’s more a matter of flexible work environment, flexibility to work from home, ability to have more company events and to have diversity in company events. So not just having a happy hour every Tuesday; for the people that works for, that’s great, but for those who it doesn’t, it’s not.

Person A: If you want to keep somebody, make sure they are being challenged. We had an analyst who came out of school. We wanted him to work harder, better, more efficiently, think more outside the box and we were pushing him and trying to pull the right levers to make him feel like this is interesting for him to do. Some of the levers we pulled were very old school: ‘if you can help us and improve your performance, there’ll be a better bonus at the end of the pay period.’ Well, that wasn’t enough incentive and productivity dropped after that.

In his exit interview, he said ‘when responsibility was taken away from me, things fell down for me.’ He thought we were saying, ‘you screwed up and now we’re taking something away.’ Instead of trying to look for ways to fix it, it should have been a learning experience. That was a big learning curve for us. Our associates and VPs are millennials; it’s getting them to feel challenged, feel like they’re contributing, feel like they’re impactful.