Since 2013, we have monitored the movement of thousands of Associates migrating into private equity in London. This has allowed us to gain insights into which strategies are hiring the most candidates, how much experience candidates have when they move, gender statistics, and more. Thus, enabling us to consult the firms we partner with on their hiring strategies and tactics to attract high-quality candidates, all while improving employee retention and team diversity.
Our Private Equity Hiring report delves into the impact COVID-19 had on junior hiring throughout 2020, alongside the backgrounds of those who made the move into the industry. For an industry that is so heavily focused on improving diversity, has there been enough of a push to make a difference?
What do the numbers say?
In prior years, we’ve typically seen the focus on diversity tilt towards female hiring. The pandemic and other global events over the last 18 months have caused a drastic shift in the priorities of junior candidates and what they value within a potential employer. Socioeconomic diversity now takes a larger portion of focus with 38.7% of respondents to our 2021 Gen Z report citing it as the most pressing issue, with gender slipping to 15.7%. Private equity firms wanting to retain and hire the best and brightest from this age group must have clear agendas targeting diversity within their hiring strategies across all levels.
The data shows that broader themes, such as the breakdown of candidate populations hired into private equity, remained largely the same even throughout the pandemic.
In 2020 over half of the entry-level candidates hired were from investment banking backgrounds. Nearly twice as much as the next most sought-after candidate group, those with PE experience, who made up 21.1% of the moves, followed closely by consultants. Since we began tracking the data in 2013, junior bankers have consistently been the most hired candidate group, accounting for approximately 50% of all Associate hires.
Overcoming invisible barriers
The private equity industry is taking action to improve equality across the socioeconomic, ethnicity, and gender gap. There is still a long way to go, and old habits are proving challenging to change.
In the future, we may see private equity firms open their candidate pools to a wider variety of backgrounds. This should theoretically provide a better blend of diversity, given that the institutions the industry currently sources its junior talent from are engaging with their own diversity agenda’s to be more representative. The improvement in diversity of thought can ultimately enhance a team’s performance, so there are tangible (albeit long-term) benefits to looking outside of the usual places for talent.
Unconscious bias can cause us to hire in our own image. Hiring candidates from a similar education or working background will not yield the improvements in diversity the industry is seeking. Hosting insight days, networking events or partnering with universities and schools can provide you with access to bright young minds during the formative years of their thinking about their future.
Starting from the bottom up – beginning with the most junior workforce and embedding these hiring strategies from the outset will be a first step to improving diversity in future. But it’ll take a community push to get us to where we want to be.
In 2021, we introduced our Dartmouth Academy, where we engage with schools to offer career insights and skills to students from all backgrounds across the U.K; facilitating high-quality engagement between companies and their future talent pool. This programme has provided the students and the firms we’ve engaged with a pathway to stay in touch from Year 10 through to their professional career. The aim of the program is to help the industry build bridges with the people it is currently failing to connect with. The bigger picture is that private equity needs to provide a ‘why’ to this future talent, if it is to have any genuine hope of engaging with them.
Please reach out to us via email@example.com to get a copy of our Private Equity Hiring Trends report or if you’d like to find out more about how to get involved with our various diversity initiatives, you can get in touch here .