Overcoming Post-Acquisition Talent Challenges in PE Backed Businesses

Harry Lewis, Managing Director at Zeren, shares his perspective on the talent challenges that follow private equity acquisitions. From leadership transitions to retaining top performers, he discusses how PE-backed businesses can build the right executive teams to support growth and deliver on the investment thesis.

1. What key talent issues do PE-backed businesses face after an acquisition, and how can executive search specialists help?

There are a few key talent challenges that PE funds face post-acquisition. The first and foremost is that the leadership team involved in the transaction will likely be going through an earnout and may be seeking to move on to a new challenge.

Post acquisition when there is often a natural outflow of leadership, there is a need for the fund and portfolio company to bring in new talent to drive growth. Additionally, if the acquisition involves a more regional business, the existing talent may need to be upskilled to support a more global strategy. This means bringing in fresh leadership to take the business to the next level.

In a go-to-market context, if the goal is to achieve 5X growth over the next five years within the investment cycle, securing the right people is critical. At this stage, most funds turn to us for guidance, helping them structure and simplify their hiring approach.

The key question is often whether the immediate need is at the individual contributor level, to drive revenue growth, or at the top of the organisation, requiring more C-suite executives or functional leaders to reshape operations and accelerate change.

That’s where we add value, helping funds and portfolio companies understand the talent landscape, available candidates, salary benchmarks, and market dynamics. We assist in identifying and engaging top talent based on factors like location, compensation, and strategic fit, ensuring the right hires to support the investment thesis.

2. Beyond base salary, what benefits or incentives are most effective in attracting and retaining high-caliber executive talent?

Most executives who thrive in the private equity space understand that PE funds embark on a specific journey when they make acquisitions. While salary is an important factor, ensuring the right base and bonus levels is essential to attracting top talent, long-term incentives are often just as critical.

For senior leadership, long-term incentive plans (LTIPs) play a key role in retention, providing a reason to stay and drive value throughout the investment cycle. The PE environment can be challenging, with constant change and transformation as businesses scale. To achieve 5X growth, or ideally more, before exit, leadership teams need both the right incentives and a clear vision for the company’s trajectory.

Beyond financial incentives, executives also consider the nature of the growth journey. If growth is expected to come from organic expansion, they need the resources and strategic control to drive that number. If non-organic growth, typically through M&A, is part of the plan, executives will want insight into the M&A strategy, including target sectors, regions, and investment priorities.

Ultimately, the ability to attract and retain top talent depends on offering both competitive financial incentives and a compelling strategic vision, ensuring alignment between leadership goals and the fund’s exit strategy.

3. How do you assess whether an executive’s leadership style and experience align with the strategic goals and culture of a private equity-backed company?

We are often introduced to portfolio companies through the fund, which means a significant amount of due diligence is done before we even begin a search. This helps us understand the key criteria for the hire. Ultimately, it comes down to where the business aims to be within the next investment cycle.

We assess the company’s growth levers, whether they are geographic (expanding into new regions or countries), tied to hiring (building out teams at scale), or operational (transforming the business model, such as shifting from a service-led approach to a SaaS-driven model). Understanding these priorities at both the portfolio and fund level allows us to align talent with the end goal.

To do this effectively, we conduct multiple briefing calls before launching a search, digging into the core attributes required for the role. We then take the company through a structured process, using benchmark profiles and calibration exercises to ensure alignment on what ‘good’ looks like before going to market.

Throughout the search, we keep clients updated on progress, typically through weekly check-ins. As we approach the final stages, we reinforce confidence through thorough referencing, both formal and back-channel, focusing on the top three candidates to validate that their experience and leadership style align with what they’ve expressed throughout the process.

4. What strategies can private equity funds implement to reduce leadership turnover and ensure executive stability throughout the investment period?

This is a really interesting question because there isn’t a single, obvious answer. However, in my experience, funds that are more actively involved with their portfolio companies tend to retain talent better than those that are less engaged.

I work closely with value creation and portfolio teams within PE funds, who take a hands-on approach to making their businesses successful. This involves identifying key structural changes early on and mitigating risks when hiring executives to ensure the right fit. The funds that invest time and effort into supporting their businesses tend to achieve higher retention rates.

Setting realistic growth expectations from the outset is also crucial. If an executive is brought in to hit an ambitious target, they need the right resources to succeed. This includes a solid hiring budget to build out the team and a clear understanding of non-organic growth levers, whether through M&A, sector consolidation, or geographic expansion.

Ultimately, long-term retention comes down to alignment. Is there a clear progression path? Does everyone agree on the end goal? The most successful cases occur when there is strong alignment across leadership and investors.

Conversely, when alignment is lacking, businesses often cycle through multiple senior leadership hires. This not only disrupts growth but also makes the company less attractive to top candidates, making it harder to bring in the right talent. The key is to define the long-term vision early, qualify candidates rigorously, and ensure they have the tools and support needed to drive success.

Harry Lewis specialises in placing top leaders in investment backed businesses. Contact Harry to discuss your hiring needs and how Zeren can support your growth with the right leadership.