Private equity has never been great at diversity and inclusion. It didn’t have to be — firms made a lot of money and no one cared too much that it was a bunch of white guys doing it.
But the world is changing and business must adapt.
Women are woefully underrepresented in PE. In the upper levels at firms, the senior ranks are practically devoid of women.
Last year we devoted an issue of Buyouts to Women in PE, featuring profiles of some talented women executives based on recommendations we got in the market, mostly from limited partners. And it turned out that, you, Dear Reader, wanted to read about Women in PE: Last year’s feature was one of our most-read pieces.
A few elements made this effort successful. First was the nature of the feature: People like to read about their peers. In this case, we spotlighted 10 women who were operating in relative obscurity (other than within their own firms and among LPs). By highlighting them, we got to focus on the daily great work that executives in this industry accomplish but that doesn’t make the headlines.
Second, the issue of women in PE is real and important. Women should be better represented; they are in the business schools; they are in the young analyst classes; and it shouldn’t have to be said, but they want to work as hard as men do. And they do — but there’s another challenge that arises that is unique to women. Around mid-career, many have to make the choice between career and raising children.
This choice is made harder by the poor way firms deal with family leave. The federal government says that if you have 50 or more employees, you have to offer 12 weeks of job-protected unpaid family leave. This simply means that the employee stays on the healthcare plan as if she never left and can expect to have her job back when she returns.
The law itself is shabby, or at least not very family-friendly. It forces families to use up vacation and then take disability to get paid something.
It’s even worse in private equity, where the majority of firms don’t have 50 employees. This means PE firms don’t have to offer anything. And sources tell us that many firms didn’t offer anything until they hired a woman and she got pregnant. Then it became an ad hoc process to try and cobble together some sort of policy.
Family leave is extremely important to a woman’s ability to continue her career after childbirth. Friendly policies: some portion of paid leave; job protection; flexibility after the employee returns to work; basically, no penalties for having a family — these are ways to smooth the path and help make continuing a career more attractive to a woman who also wants a family.
It’s also important that family leave focus not just on women. Men, too, are playing an ever greater role in child-rearing, especially as technology makes it easier for parents to be engaged in both their careers and their families. The burden should fall not just on the woman as the primary caregiver because this creates an uneven playing field where only women take leave and fall back a few steps while men stay in their jobs and move ahead.
I mentioned family leave a few times in the daily PE HUB Wire and got an amazing response from anonymous readers who felt the need to relate their experiences. We have a long way to go.
As this issue gets more attention, as more women-focused PE groups form and raise the issue, we here hope the industry will come around to understand that a robust family-leave policy is a key to retaining talent and to helping employees achieve a balance between their careers and their family life. This is important for recruiting, and for helping women stay in their careers after they make the decision to start families.
Private Equity Editor Chris Witkowsky reflects at home. Photo by Wendy Witkowsky