How PAs impact business revenue in private equity
In private equity, it’s easy to focus all your attention on the investors, executives and partners who directly impact business revenue.
But dig a little deeper, and the hidden heroes of private equity reveal themselves.
Because the stats prove, the right PA or EA has a huge (even multi-million pound) impact on your top and bottom line.
Let’s look at the facts.
#1 – Boost executive productivity
If investors, executives and partners are the engine of private equity success, PAs are the oil that keeps that engine running smoothly.
Because an exceptional PA or EA is much, much more than admin support. They ensure your firm is a well-oiled machine and turbocharge everyone they work with.
Which means an exceptional PA or EA is the secret to high-performance. Which potentially leads to significant revenue increases.
Gallup conducted a study last year into the link between productivity and managerial hires. They found great managers can drive 27% higher revenue per employee than average.
The PA-executive relationship is different to the manager/employee relationship – but not massively. A great manager empowers, facilitates and problem-solves, and so does a great PA.
#2 - Strengthen your culture and employer brand
If you hire an exceptional PA – and do the right things to retain them – they can turn into a long-term business critical hire. Someone who knows your culture, processes and practices inside-out.
Which is like a cultural snowball effect.
Especially when you consider how visible PAs are within your business. 55% of PAs are also involved with office management. And 39% manage others.
Then consider than 37% of PAs also take on HR responsibilities.
One exceptional PA will potentially interact with your entire business and be responsible for bringing new people into the business too. Which means they have a huge role in determining and spreading your culture.
And that has a huge revenue impact. Bad company culture costs the UK economy £23.6 billion each year, in high turnover, low productivity and excessive recruitment costs.
In high turnover, low productivity and excessive recruitment costs. A fantastic PA helps ensure you’re not taking a big slice of that pie.
#3 – Bolster your client brand
By the same token, a great PA isn’t only internally-facing.
When they respond to emails, make diary arrangements or meet and greet clients for executives, they represent the executive and the business. Which means their attitude and professionalism has a huge impact on company reputation.
Don’t fall into the trap of thinking these things are fluffy. Remember when United Airlines broke David Carroll’s guitar? One rogue baggage handler ended up costing them $180 million in lost shareholder value.
Plus, 14% of PAs take on business development and sales responsibilities. A typical private equity salesperson will be connecting with potential clients every day and the professional standards set in that initial touch-point need to be maintained. If you've got the right person by your side, you can be confident that when clients or potential clients interact with your PA, that they are left with a fantastic perception of your business.
Which directly translates into revenue, when those prospects bring their business on board.
#4 - Decrease long-term recruitment costs
For growing private equity companies, recruitment needs are on the increase. 80% of investment firms hired new employees in 2018 (compared to only 66% in 2017).
And unfortunately, that’s not just a story of growth. Average turnover in private equity is high, with 24% of investment firms admitting they lost a partner or key recruit in 2018.
If you can reduce those recruitment needs, you can dramatically reduce the associated costs.
And a fantastic PA helps because a) they strengthen your employer brand, as above. Which means hiring is easier, faster and less costly in the first place.
Then b), they boost morale – so turnover goes down and productivity goes up. So you need to hire fewer people to achieve the same revenue growth.
And finally c), they’re valuable internal promotion candidates themselves.
We’ve seen PAs progress into Department Heads and Fund Directors, for example. Which means you reduce your reliance on external hiring and gain a senior employee who’s already deeply embedded into your business.
Find out how to hire a PA superstar who impacts your business revenue, download our free handbook now: Find Your Superstar.