by Ana Maria Urrutia - PER
13. January 2010 12:37
When you have a recruitment need, you have probably already decided whether to retain one firm or work with a handful of firms on a contingency basis. Why? If you have a relationship with a recruiter who has been consistently successful, you’ll be confident to retain them. But if you were disappointed last time you recruited, you will be knocking on other doors to see who else is out there. Last year we started relationships with tens of new clients, many of whom had been disappointed with their previous providers who were not delivering at the speed and quality required.
We understand why this has happened. In 2009 PER had twice as many candidates for half the searches as compared to 2007. In this market, employers work hard to retain their star employees and the number of jobseekers is exceptionally high. So sorting through the talent pool to identify the best potential investors for private equity and venture capital needed muscle and expertise. PER interviewed a record 2,200 candidates exclusively for private equity roles. About 1,000 of which were investment bankers, 850 were private equity professionals and 290 were strategy consultants. With this kind of candidate volumes in the market, you might conclude that finding great candidates should be an easy task. Finding stars is never easy – but by having the capacity to deal with that volume we were able to sift and screen for the best. 
When to retain?
When choosing your recruitment strategy, think about the following:
Only retain when you have the certainty that your recruiter has exhaustive market coverage. Think of the size of the candidate pool and ask your recruiter:
· What percentage of the suitable candidates do they already know?
And
· How many they can interview within a two month period? More...
by Ana Maria Urrutia - PER
10. August 2009 12:52
How will you retain your favourite employees if your fund has assets under water and you are planning on paying no discretionary bonuses this year?
The topic of conversation among investment professionals these coming months will be year end bonuses. The value of carry has been cut significantly and the prospect of bonuses in private equity funds that have had to writedown assets is low. We hear some HR professionals argue that “a job is a bonus” and agree, to some extent. If you decide to pay no bonuses across the board you risk that your best people will start looking over their shoulder. And there will be opportunities out there for them, we see the evidence in the market. So do you run the risk? We think you can manage this risk and manage your team’s expectations.
How? Tell your key people as soon as possible that you want them to ride the storm with you. Involve them in your plans to minimize losses in the underperforming assets and explain your strategy to seize the next opportunities that will arise from the market bottoming out. Tell them it is your priority to look after them and at the end of the year, stay true to your word and pay those key people you want to keep. The rest can wait.
So how much bonus should you pay the stars despite the losses? We believe that bonuses will be significantly lower than last year but they won’t be zero. Also, we think many funds will consider raising base salaries as we have seen starting to happen in a number of investment banks. Bonuses have been paid out to junior investment bankers this summer, albeit 50% down from last year. And base salaries have been increased by much more than previous years to maximise retention. We think they have put their best foot forward to retain their top talent and the move will be effective in the lo
ng term.
In the case where funds are underwater and have to be wound down, there will be no room for bonuses across the board. The goal is to manage the assets until the exit and minimise losses. But if they cannot see the incentive of staying, why would they? We think these investment professionals will have a harder time finding alternative job opportunities, and your risk of losing them will be lower. Prospective employers value loyalty and want to see how people perform in the tough times. It will bode well for someone to demonstrate they did not just jump ship but demonstrated resilience and creativity in achieving the best possible exit for their underperforming investments. We see that some people will have to put up with no bonuses for the next couple of years while the funds wind down. In the end, they can at least sell their work ethic and demonstrate that they do not leave unfinished business.
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