PE Investments Bring Talent Divestment
Private equity (PE) acquisitions introduce uncertainty regarding a company’s future direction, leadership, and operational strategy. To maximize profitability, private equity firms frequently implement large-scale cost-cutting measures, such as mass layoffs and workforce restructuring. Our previous research has shown that these aggressive tactics in mergers and acquisitions (M&As) can lead to declines in employee sentiment toward company culture and values, as workers perceive M&As negatively. This week, we focus on private equity acquisitions. Using Revelio Labs’ workforce data, we analyze a series of acquisitions to quantify private equity’s impact on workforce composition, assess the effectiveness of these strategies in reducing costs, and examine the toll it takes on employee sentiment.
As anticipated, companies acquired by private equity firms experience a significant increase in attrition during the year following the acquisition. The increase in turnover is especially notable when compared to competitors, who maintain relatively stable turnover rates during the same period, despite having similar rates prior to the acquisition. The heightened turnover at private equity-acquired companies is likely driven by a combination of mass layoffs and voluntary attrition from disgruntled employees.
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Have a good day,
Helping companies (and people) get the right skills in the right place at the right time Ted Lasso Award Winner | Dad Joke Connoisseur
8 小时前The difference in the chart is striking. Interesting report.
Do It Yourself HR | People Optimization | Leadership Effectiveness | Operational Excellence
5 天前Yet, it's really a shame. In a private company, sure people cuts feel initially like a satisfying jump in progress, but the money ACTUALLY saved in optimizing and assessing the effectiveness of roles longer term far surpasses this exciting moment. And in my experience, prevents further chaos down the road.
Helping Large Enterprises Create Cultures That Increase Retention, Engagement, and Impact | Director of Marketing @ Team HQ | Making Corporate Work for Gen Z (From a Gen Z)
5 天前crucial insight into the reality of private equity acquisitions Ben Zweig the balance between efficiency and maintaining a strong company culture is often overlooked, but it’s what truly defines long-term success.
Director of People Analytics Research, ADP Research. I study the decisions of employees and employers. My posts reflect my own thoughts.
6 天前Ben Zweig, Paulina Tilly, and Dean Boerner: What Revelio Labs data is used to define the treatment and to separate treated firm-months from untreated firm-months (or maybe its worker-months instead; not sure what level of analysis the treatment effect estimand applies to)? Either way, interesting research.