When you take on a new recruit, whilst on-the-job training is useful and is undoubtedly the best way to learn, it is also helpful to have some mutually agreed objectives that focus on strong performance.

Many studies show that if you pay more of the right kind of attention to employees, they work harder and smarter. Retention rates go up, your team is happier and more effective.

So, how do you set objectives for your new recruit? Following these nine rules will give you an edge.

1. Tell your new employee what your expectations are. For junior-level recruits, make sure you tell them your expectations in terms of dress code, working hours, lunchtime and breaks, use of the internet, when and if they can use social networking sites, take and make personal calls and so on. And with regard to their role make clear your expectations for delivery during the probation period. For instance how they should split their time between the different activities e.g. origination, screening, execution. Set some KPIs for example with origination, how many companies should they approach, number of meetings fixed and so on.

2. Learn from the best. Vince Lombardi, the legendary coach for American football team the Green Bay Packers, believed in giving every player a clean slate at the start of every game. This meant that “star” players did not rest on their laurels and felt compelled to continuously prove themselves in each game. You should have the same attitude towards new employees - they may have been a star performer in their last job at Goldman, for example, but you should expect them to continuously prove themselves in their new role.

3. Keep it simple. Keep the objectives simple and refer to them regularly. Objectives should be reviewed at least quarterly and performance levels checked at least monthly. Avoid overly complicated matrices as they are likely to bore employees and make them averse to the objective-setting process. Print out the objectives and put them up in a place where the new recruit will see them on a daily basis. Make sure all objectives are measurable and timed.

4. Push the boundaries. Learn from Henry Ford. The objectives, to an extent, should be mutually agreed between the new recruit and their manager, but should also push the new recruit significantly out of their comfort zone. Henry Ford used this approach of setting challenging objectives and achieved massive improvements in productivity on his factory shop floors. More...

We recently launched our crystal ball quiz where you have the chance to make some predictions about 2010 and donate to the PEF - a super cause.  Well, I’m going to make my own prediction for the private equity recruitment market for the rest of this year.  The war for talent is truly underway.  Private equity experience is now the most sought after skill set even for junior hires.

When we first started this blog I spent a lot of time thinking about spotting and keeping star performers.  Then the world changed and it didn’t seem so urgent.   I would never have thought it would change back so quickly. I cannot stress enough how important it is at the moment to look at your star juniors and understand what motivates and drives them in order to retain them in your business.  Why?   Well we have seen not just a significant uplift in the volume of recruitment but also uplift in the requirement for experience.  The 2007/8 hiring days of ‘find us an extra pair of hands to do the modelling’ are gone.   An increasing emphasis in the majority of mandates is for private equity experience. And at the junior level this means someone who has not only got the skills but has also had the edges taken off, learned the ropes, seen some action.  Investment banking boot camp is no longer enough.  Now investment banking boot camp followed by private equity boot camp is going to be the popular request.

  
So if you run an analyst programme where you expect your juniors to leave you after a couple of years – then send them my way as we’ll have no trouble finding them a home.  But if you’ve got some stars in there and want to keep them then really think about how to do that.
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As we approach the end of the first quarter, we have noticed that M&A advisors are back in action and business is reactivating. Banks are adjusting to the new tax regulations and are dealing with the fact that they lost or let go of many people last year. Now they are recruiting again and are feeling the stress of the shortage of people.

We have seen evidence of this in the significant increase of base salaries, especially for the associate pool. Many banks have readjusted their base salaries to guarantee a minimum fixed income. We were surprised to see increases of 23% to 75% for 1^st year, 2^nd year and 3^rd year associates, respectively.

The bonus range has also increased at this level. Associate bankers are receiving bonuses from 90% up to an unprecedented 230%. Of course the range varies from bank to bank, but the reality is that they are trying to make sure that their associates do not suffer from the new tax regulations and are not only readjusting the base salaries, but also bonuses.

The way bonuses are structured is also changing. We are finding out that some banks are paying partly in cash and partly in long-term stocks at the associate level, which we had previously seen only at more senior levels. The cash component ranged between 65% to 75% and the stocks had a vesting period of 3 to 5 years.

Interestingly, associates acknowledge that they are an asset that is now scarce, especially the good ones. And even though their bonuses were part in stock, they are feeling very pleased about their new compensation levels.   More...

Did you know that women represent half of all professionals entering finance, but by VP level the proportion has dropped substantially?   Is this the same for private equity?   The answer is yes – but from a lower entry base so the problem is magnified.    We’ve done some counting and whilst approximately 25% of junior private equity professionals are female* this proportion reduces to 10% by investment director and above.   You might ask - does it matter?   Well it should.

There are sound economic arguments for maintaining a good diverse mix within your team.  But the issue here is not so much accepting that diversity matters, which I think most people do, but focusing on the lack of upward movement or fall out that happens before the senior levels are reached.   Arguably you are losing some of your well trained skill base before you can really capitalise on all that input you gave in those early years.  And it is not all to do with leaving to have children.  It’s a bit more complicated than that.  There are real issues of women leaving to have families and then not being able to get back on the ladder. There also seem to be issues related to promotion and progression within the firm.

And the issues lie on both sides – the employer and the employee. 

For the private equity employer that wants to retain and promote its female staff the sorts of issues that it may need to tackle include:

·         Those difficult to eradicate unconscious biases and under the surface issues where unspoken and unconscious prejudices still exist.  For example an unconscious bias that might inhibit the promotion of women is how work is allocated to them.   Do you put your female team members on the most visible, promising investments? Or is there an unconscious bias that pushes them towards less high profile projects that might need a lot of attention but are not so well recognised when it comes to considering who makes it up the greasy pole

·         In order to recruit more women and retain them in the business you may have to positively discriminate – but a positive discrimination culture is not easy to achieve. It means saying things like it is ok for the main child carer in a family (usually the woman) not to participate in so much travel but that this opt out is not acceptable for other team members with children 

·      It requires real recognition of the struggle to juggle home and work and the support that is needed from the employer to do that without falling into the trap of unconscious bias or discrimination More...