Middle Market Growth - March/April 2019

MAR/APR 2019

// THE OFFICIAL PUBLICATION OF ACG

Just Desserts Greyston Bakery’s ‘open hiring’ benefits society—and business

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FROM THE EDITOR

Tight Labor Market Raises the Bar for Hiring

A

KATHRYN MULLIGAN Editor-in-Chief, Middle Market Growth kmulligan@acg.org

ttracting qualified employees has long been a challenge for middle-market companies—one that’s grown more acute in today’s tight labor market.

The increasingly competitive war for talent has led some organizations to open their doors to groups previously excluded from the workforce or overlooked by employers.

Formerly incarcerated adults are one such population. Occupational licensing restrictions and the stigma of jail time have contributed to unemployment rates above 25 percent for ex-cons. But as cultural attitudes shift and state and federal policies evolve, some human resources departments are beginning to consider members of this group for open positions.

Other companies, like Greyston Bakery—the subject of this issue’s cover story (p. 20)—have long hired formerly incarcerated workers, who help produce brownies that the Yonkers, New York, company sells to Ben & Jerry’s, Delta Airlines and Whole Foods. Greyston is joined in its hiring stance by large companies like McDonald’s, Delta and Virgin Group, whose founder, Sir Richard Branson, has been a vocal proponent of prison reform and progressive hiring.

While I was able to find middle-market companies that hire formerly incarcerated adults, convincing one to participate in a magazine profile was difficult. Privately owned companies are—­ unsurprisingly—often private about their operations, but in this case, they were also reticent when asked about hiring former inmates.

Greyston was an exception and has been on the forefront of advocating for so-called “open hiring” in the business community.

I suspect more organizations will become comfortable with the concept as they struggle to fill jobs and companies like Greyston prove that second chances can be good for business.

Those with criminal records aren’t the only ones who face challenges when looking for work. High unemployment persists among many other groups, such as military veterans, immigrants and adults with disabilities. The tight labor market is creating new opportunities for individuals who want to work but haven’t had a chance—often because they don’t fit the traditional candidate profile used by HR. Perhaps the low unemployment rate can prompt more inclusive hiring that persists beyond this economic cycle. It’s not only a moral imperative, it’s a business one, and the future success of the middlemarket economy may depend on it. //

MIDDLE MARKET GROWTH // MAR/APR 2019

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EXECUTIVE SUMMARY

The Heart of the Middle Market

H

ANGELA MacPHEE Chairman, ACG Global Board of Directors, and Partner, Baker Tilly

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middlemarketgrowth.org

uman capital and talent management—the theme of this issue—are central to every organization. Financial considerations and access to capital play an important role in building great businesses, but they will only help a company get so far in the absence of strong relationships and skilled leaders and employees.

I can attest that having the right people is key to the success of an organization and its growth. Having recently led our firm through a combination with Baker Tilly, I have also seen firsthand how the right team becomes a huge contributor to the success of a deal.

ACG’s board of directors is similarly tasked with ensuring ACG Global remains a strong organization with a clear strategic direction. Reflecting on where we’ve been and where we’re headed is a purposeful pause that ACG practices every three to five years. We are currently in the process of refining organizational goals together with our strategic planning committee, and I’m pleased to report the exercise affirmed our mission to drive middle-market growth.

We know this to be true: Our value is in our people. Our voice is respected. And our future is here in North America as well as abroad.

ACG will remain focused on fostering a global network of middle-market M&A professionals and providing insights into the trends affecting deal flow. ACG and Source Media, LLC, recently agreed to discontinue complimentary member subscriptions to Mergers and Acquisitions®. ACG affirmed its commitment to our official publication, Middle Market Growth®, our exclusive channel to communicate with members and to report on middle-market dealmaking activity.

The middle market is a fascinating and vibrant place, whose economic contributions often go unacknowledged in the media and policymaking circles. Yet we know private capital is critical to the financial success of midsize companies and their ability to create jobs.

That’s possible thanks to every member of ACG and the network we’ve built together. ACG is an organization that depends on the contributions of volunteers in the industry—please consider joining a committee or the board of directors at your local ACG chapter.

In this issue, you’ll find insights into how to build a great team within your own firm or a portfolio company, just as we’re continually working to strengthen ACG. We are grateful to have you as a member and we look forward to continuing to be a place where you can build relationships and access resources to thrive in this industry. //

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MAR/APR 2019

DON’T MISS QUICK TAKES Igloo Software’s Digital Workspaces 18

A QUALIFIED OPINION Technology and the Workforce 19

POLICY POINTS A Lens into SEC Enforcement 34

IN THIS ISSUE Cover and above photo by Richard Freeda

GROWTH STORY

From the Editor 1

Just Desserts

Executive

Greyston Bakery believes in second chances. By selling brownies to customers such as Ben & Jerry’s, Delta Air Lines and Whole Foods, the Yonkers, New York, company, has grown to a $20 million business. It credits its success, in part, to its nontraditional hiring and commitment to employees, including formerly incarcerated adults who might otherwise struggle to find work. 20

The Round 8

Summary 2

Vertical View 16 Midpoints by John Gabbert 17 Growth Economy 37

TREND

Mapping a New Career Benefit Location has become an increasingly important factor in a company’s ability to attract and retain talent in a tight labor market. While large urban centers still have appeal, some private equity firms are touting their portfolio companies’ locations in less-expensive midsize cities as a way to lure talent. 28

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The Portfolio 38 ACG@Work 40 The Ladder 46 It’s the Small Things 48

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THE ROUND

After Years-Long Decline in Interest, Business Schools Are Writing a New Lesson Plan

By Benjamin Glick

O

nce considered the primary instrument for professional advancement, graduate business degrees have seen declining student interest despite evidence linking them to higher salaries. In response, universities are adapting their programs for emerging fields and offering cheaper alternatives in an effort to shore up application figures.

For the third year in a row, a majority of full-time two-year graduate business programs in the U.S. reported a decline in applicant volume, dropping 6.6 percent in 2018 from a year earlier, according to a survey published by the Graduate Management Admission Council, a nonprofit that oversees the GMAT admissions exam used by graduate management programs.

In the past, declines mainly impacted small business schools or little-known programs, but now elite institutions are feeling the pinch.

While still receiving many more applications than they can accept, schools like Harvard Business School, the nation’s top program, saw application volume drop 4.5 percent in 2018 from a year earlier, according to the Wall Street Journal. Stanford’s Graduate School of Business slipped 4.6 percent and the University of Pennsylvania’s Wharton School, the nation’s oldest business school, saw applicant volume slump 6.7 percent.

Contributing to the decline is a decrease in international applicants.

According to the GMAC survey,

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Master of Business Administration programs saw the number of students from outside the United States grow rapidly in the early 2010s and then rapidly decline after 2016. While international participation in some U.S. programs has begun to recover, it has exposed the waning interest in graduate programs among American students, which can be attributed to one primary factor: the economy.

Interest in MBA programs, including part-time programs, runs counter to labor cycles, GMAC data show.

As the unemployment rate remains at historic lows, would-be students

are choosing to remain in the professional realm, prompting schools to expand their offerings.

Offering Specialization in Emerging Fields For the majority of graduates, an MBA degree yields significant pay raises.

According to a survey conducted by the Wall Street Journal and the Times Higher Education, an MBA can double a graduate’s income, particularly when combined with a technology or health care emphasis.

Liza Kirkpatrick, senior director of the Full-Time Career Management

Center at Northwestern University’s Kellogg School of Management, says business schools have tried to adapt to the changing demands by offering more courses in emerging fields.

“Companies are reaching a point where they require someone with an MBA skill set to continue growing,” she says.

Kellogg has seen growth in programs serving specific industries, such as technology and health care. As a result, Northwestern has fared better than its peers. Application volume for its two-year MBA programs declined 2.7 percent in 2018—about half as much as other top programs.

The number of MBA graduates with concentrations in areas like data science and business analytics grew more than 30 percent in 2018, according to the GMAC survey. In addition, a majority of U.S. companies surveyed in 2018 said they planned to hire MBA graduates with data emphases in the future.

Specialized graduate business degrees with greater earning potential have attracted applicants, but they’re unlikely to solve schools’ waning application volumes, especially as costs continue to rise.

The High Cost of Tuition Adjusted for inflation, average tuition for undergraduates at public fouryear schools has nearly tripled since the 1980s while wages for workers with a four-year college degree have remained virtually constant, according to the College Board’s “Trends in College Pricing 2018” report.

The trend for MBA graduates is similar. According to a report from Poets and Quants, which covers business school news, the annual tuition for a master’s from Dartmouth

“THE WORKPLACE IS CHANGING MORE RAPIDLY TODAY THAN EVER BEFORE AND EMPLOYERS ARE IN NEED OF HIGHLY DEVELOPED TALENT.” ANANT AGARWAL CEO, edX

College’s Tuck School of Business cost about $11,000 in 1985 and graduates could expect a $43,000 salary on average. This tuition-to-salary ratio was roughly the same for other programs at the time, but it has steadily eroded over subsequent decades.

Today, tuition at Tuck has increased more than six times to $68,000 per year. Yet the average salary for a graduate has grown less than threefold to $128,000.

If left unchecked, high costs could lead to shrinking enrollment and cascade into a talent shortage in fields like health care management, where the Bureau of Labor Statistics expects demand for talent to increase more than 20 percent over the next decade.

A dearth of qualified MBA graduates with health care expertise could upset the operation of clinics, hospitals and research institutions.

Embracing Disruptive Learning Technology In response to rising program costs, business schools are beginning to bridge the knowledge gap between higher education and the workplace by investing in cheaper alternatives, such as online courses.

Online education programs have been available for decades, but today technology providers and educators are partnering to offer innovative, low-cost options for graduate business education.

In 2016, a nonprofit online learning platform founded by Harvard and MIT called edX launched its MicroMasters program, a collection of modular graduate-level courses covering a wide range of subjects offered in partnership with top universities.

Students can apply to a participating university offering credit for the MicroMasters program certificate— comparable to a quarter or half of a traditional master’s degree, according to edX—and, if accepted, they can pursue an accelerated and less expensive master’s.

The cost to enroll in a MicroMasters MBA core curriculum offered through the University of Maryland, for example, is less than $1,500.

Because the modules emphasize career-relevant information, students may not have to earn an entire degree to increase their value to employers, the organization says.

“The workplace is changing more rapidly today than ever before and employers are in need of highly developed talent,” said Anant Agarwal, CEO of edX and a professor at MIT, in a press release. “The MicroMasters initiative provides the next level of innovation in learning to address this skills gap by creating a bridge between higher education and industry to create a skillful, successful 21st-­century workforce.”

MIDDLE MARKET GROWTH // MAR/APR 2019

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THE ROUND

Should I Stay or Should I Go Now? How to keep employees after a deal closes

C Jennifer Fondrevay Founder and Chief Humanity Officer, Day1Ready

PODCAST Author Interview: Hear Fondrevay discuss the human side of M&A on the Middle Market Growth Conversations podcast, available in Apple Podcasts.

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hange is always difficult, particularly when human emotions are involved. Mergers and acquisitions are by nature transformative, and although they have a strong financial component, they’re ultimately about people. Understanding that fundamental aspect and planning appropriately can mean the difference between a company that thrives postdeal, and one that loses its greatest asset: talent.

“The talent piece is a continued challenge when acquiring a company, particularly with small to midsize companies where the intellectual knowledge of your workforce is critical to the business,” says Steve Ellis, managing director of private equity firm Stratford-Cambridge Group.

“You need to take important steps up front to hold on to key talent, while equally setting your business up to attract new talent.”

The mere announcement of a deal can destabilize a company’s workforce. When a merger or acquisition is announced, employees immediately wonder how the news will impact them. They can’t help but consider what the change will mean for their job, who their boss will be, and whether they want to stay—if that’s even an option.

Meanwhile, human behavior is hard to predict. Due diligence and deal negotiations are naturally rooted in the evident facts and what is most likely to occur. Even when companies consider worst-case scenarios and prepare for them, it’s difficult to

anticipate every outcome, particularly as it relates to the workforce.

Traditional levers for retaining key employees are hard to pull as the post-deal work environment shifts from its current culture to one that has yet to be defined. Establishing clear goals, providing opportunities to learn, lead and grow, and recognizing and rewarding good work become difficult during the initial transition stages as managers determine what the new goals mean for them and their team.

In the face of these realities, how can a company retain the talent that will position the business for success? Yes, money talks and incentivizing people with an equity stake in the business can keep them in the short term. But for enduring success, a company must identify and retain critical layers of its workforce—not just management—and engage them as active contributors to the business.

To retain and attract talent, prioritize the people during your planning early in the M&A process. First, get senior leaders aligned on the vision and the corresponding success metrics. Next, define the organizational structure and spend time determining the talent needed several layers deep. Finally, recognize that the workforce will be unsettled initially, so create nontraditional leadership opportunities, such as identifying and resolving decision-making logjams, to engage multiple levels of your workforce while helping to accelerate productivity.

Shift Your Thinking Around People M&A deals can be parsed into three phases: before, during and after the deal announcement. Typically, workforce considerations aren’t addressed at the start but are relegated for later discussion as leaders focus on getting the deal done while leaving other details (including the people piece) to be addressed along the way.

This is a tactical error with grave consequences.

A successful merger or acquisition requires that senior leaders agree on the vision and that members of the workforce understand their roles and what’s required of them. Recognize that key talent exists several layers deep in the organization—not just at the top—and their expertise goes beyond their job definition. Maintaining tribal knowledge is critical, so consider repositioning employees in roles that inspire them and allow the company to retain valuable expertise.

By failing to consider the people doing the work and how best to motivate them, a company leaves employee buy-in around the new vision up to chance. This inevitably stalls productivity and further delays the integration plan’s execution.

Have a Process and Clear Metrics Defining the organizational structure early, with a focus on common and consistent metrics, gives teams and individuals a clear sense of their roles and how they will be evaluated.

“Post-deal, performance can be clouded by a number of factors,” says Kevin Snyder, president of Speedgrip Chuck, a midmarket manufacturer that was acquired by StratfordCambridge Group in 2015. “We strive

to ‘remove the excuses’ by targeting a simple and consistent set of metrics that help people focus while equally measuring their progress.”

Identifying early on where the teams will intersect and how decisions will be made is equally critical. Nothing can frustrate individual contributors more than being stalled in their ability to get things done.

Minimize these aggravations by soliciting input from directors and managers once the deal has been signed so they can influence the structure and define a process that reflects the realities on the ground. Engaging the next level of talent to inform the organizational design can accelerate their buy-in and, ultimately, workforce productivity.

Learn, Lead and Grow “One of the biggest obstacles to employee retention in midmarket companies is being able to provide opportunities for career growth and advancement, especially for younger talent, who will be hungry for development opportunities as the company shifts and evolves,” says Snyder, who joined Speedgrip in 2017.

To retain younger employees in particular, develop nontraditional

leadership opportunities. Speedgrip identifies managers who can lead project teams, providing them with new ways to grow within the company. Those assignments can keep talent by providing both leadership benefits and an opportunity to own the vision.

Also encourage managers to identify ways they can learn, lead and grow, rather than waiting to be told what to do. People need not stay tied to their old job definition. When encouraged, employees will more actively seek new ways to contribute to the organization’s vision.

Having a personal stake in the business increases the likelihood that employees will stick around, which in turn raises the company’s prospects for long-term success—the ultimate goal of any M&A transaction.

Jennifer Fondrevay is founder and chief humanity officer of Day1Ready, an M&A human capital consultancy focused on the people strategy of the M&A deal. She is the author of “NOW WHAT? A Survivor’s Guide for Thriving through Acquisition,” to be published in 2019.

“TYPICALLY, WORKFORCE CONSIDERATIONS AREN’T ADDRESSED AT THE START BUT ARE RELEGATED FOR LATER DISCUSSION ...

THIS IS A TACTICAL ERROR WITH GRAVE CONSEQUENCES.”

MIDDLE MARKET GROWTH // MAR/APR 2019

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THE ROUND

Performance Management vs.

Managing Performance A comprehensive people strategy keeps employees engaged

P Elise Chowdhry Managing Principal, Optimum Advisors LLC

erformance management.

Managing performance. If you think the two are the same, you are mistaken—but you’re not alone. The concepts can be confusing, particularly for middle-market firms and companies that do not have traditional human resources departments and personnel.

An effective people strategy must include both performance management (direction) and managing performance (feedback and development). Failing to fully understand and execute these distinct strategies can be costly, making it imperative for leaders to grasp the difference between the two concepts and employ both.

“PERFORMANCE MANAGEMENT SYSTEMS ARE MADE INEFFECTIVE WHEN PROCESSES ARE OVERLY COMPLEX, AND WHEN PERFORMANCE MANAGEMENT IS NOT A STRATEGIC PRIORITY FOR COMPANY LEADERS.” According to Gallup’s 2017 “State of the American Workplace” report, only 1 in 5 U.S. employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. Given that, it is no surprise that only 1 in 3 U.S. employees is engaged at work, and more than half of the American workforce is

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searching for a new job or watching for openings.

The costs of these statistics add up quickly: Actively disengaged employees are estimated to cost U.S. companies between $450 billion and $600 billion in lost productivity every year.

That leaves plenty of room for improvement. The first step in increasing employee engagement and reducing costs is understanding the concepts of performance management and managing performance.

Performance Management Performance management commonly refers to the tools, policies and procedures used by HR leaders to review, assess and, in some cases, rate employees. Unfortunately, the process can be frustrating and viewed as a waste of time by managers and employees.

Performance management systems are made ineffective when processes are overly complex, and when performance management is not a strategic priority for company leaders. The systems fall short if managers approach the performance management process as a “check-the-box” activity, or if employees are not included in the goal-setting process.

The head of HR at a middle-market company I spoke with cited a 13-page success factor-based system as among the worst practices she’s seen, calling it “cumbersome” and a detractor from “meaningful conversations.”

In her view, the best practice is one that’s “disciplined but not overdone, with the right balance of emphasis on forms and conversations.”

I have seen firsthand the negative outcomes when performance management systems fail or are nonexistent.

Leaders promote the wrong people, for the wrong reasons, and employees keep doing what they are doing while underperformance goes unchecked.

In other cases, employees disengage and productivity declines, or top performers quit while weak performers stick around.

Executives worldwide have recognized that performance management systems need improvement. According to Deloitte’s 2017 “Global Human Capital Trends” report, 79 percent of executives rate the redesign of performance management as a high priority, up from 71 percent three years ago.

Thirty-eight percent of respondents considered fixing performance management “very important.”

When performance management is executed effectively, there are clear expectations that guide employee behavior, a culture of accountability exists, and the framework supports managerial decision-making.

I spoke with a CFO of a middle-market mezzanine firm who revamped his firm’s performance management process. He noted that having clear goals and metrics for measuring individual performance had made employees more accountable and focused, which has had a positive impact on the organization.

“Since changing our process, deal flow has increased significantly,” he said, attributing the change largely to the new practices, along with the addition of new staff members.

“Looking back, it seems like common

“THE MILLENNIAL GENERATION HAS ELEVATED MANAGING PERFORMANCE FROM A ‘NICE TO HAVE’ TO AN IMPERATIVE AND GEN Z HAS NOW ARRIVED.” sense that taking the time up front to set goals and then execute on them will generate great results.”

Managing Performance Managing performance refers to optimizing employee potential through feedback, training and educational opportunities, and knowledge sharing.

The U.S. business community appears to be struggling with the substance of managing performance.

According to Gallup’s 2017 “Re-Engineering Performance Management” report, nearly half of employees say they receive manager feedback a few times a year or less. Only 26 percent say the feedback they receive helps them do their work better. Only 4 in 10 employees strongly agree they have had opportunities at work to learn and grow.

Leaders who effectively manage performance use periodic formal and informal check-ins to discuss progress and challenges. They provide constructive, actionable feedback that is tailored to each individual’s developmental needs and preferred learning style. These leaders establish a twoway dialogue when creating development plans. They work collaboratively with employees to help them achieve their developmental goals.

The millennial generation has elevated managing performance from a “nice to have” to an imperative and Gen Z has now arrived. These younger workers in particular are looking to their employers to listen to their

ideas, mentor them and provide consistent, quality feedback, along with development and advancement opportunities. As their numbers grow in the workplace, so will demand for these managing performance practices.

Building an Effective People Strategy Managing performance in combination with performance management optimizes an employee’s potential and performance and serves the best interest of all stakeholders. This comprehensive people strategy does not have to be complex, but it must incorporate both of these elements to effectively engage employees. Gallup research has shown organizations and teams with higher employee engagement and lower active disengagement perform notably better on a range of metrics, including customer engagement, productivity, employee retention, accident rates and profitability.

If you recognize that your organization lacks an effective people strategy, wait no longer. Your employees and investors will thank you.

Elise Chowdhry, MBA and SHRM-SCP, is the managing principal of Optimum Advisors LLC, an organizational consulting firm focused exclusively on helping middle-market firms and companies hire and optimize human capital, align organizations, solve business challenges and drive growth.

MIDDLE MARKET GROWTH // MAR/APR 2019

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THE ROUND

Securing Foreign Talent in the Trump Era

Chad Blocker Partner, Fragomen

Emily Allen Associate, Fragomen

THE U.S. GOVERNMENT HAS TRENDED TOWARD LONGER PROCESSING TIMES, MORE REQUESTS FOR ADDITIONAL EVIDENCE, AND MORE FREQUENT DENIALS.

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H

istorically low unemployment has reduced the supply of qualified workers for midmarket companies, a challenge compounded by restrictive U.S. immigration policies that make it difficult and costly for companies to employ foreign nationals.

In an effort to secure skilled talent, offering immigration sponsorship to foreign nationals—who must have a visa to work in the United States— has become a more common part of doing and sustaining business. Yet in recent years, the U.S. government has trended toward longer processing times, more requests for additional evidence, and more frequent denials—even in cases that previously would have been considered routine.

The government has heightened its scrutiny of H-1B visas—used for specialty occupations such as software engineers, accountants, financial analysts, graphic designers and management analysts, among other

jobs—across industries, sometimes concluding for the first time that an entire occupational category is inconsistent with H-1B sponsorship, such as in the case of computer programmers.

L-1 visas, used for transfers within companies, have also seen more requests for additional evidence and an increase in denials. Employment-based green card applicants previously were not required to appear in person with an immigration officer; now they must attend an interview before their case can be approved.

The immigration service also adopted a new policy that eliminates the requirement that immigration officers defer to previous decisions in the same cases. Officers are now free to deny a case, even if it was approved previously or involved the same employee.

The government offers a useful expediting service called premium processing to accelerate processing

times to just 15 days, rather than several months. But that service has been suspended twice since March 2017 for months at a time for certain H-1B case types.

These trends have stoked fear for both businesses and foreign nationals. Companies perceive new risks related to business continuity, costs and employee experience, while foreign nationals feel vulnerable in both a personal and professional sense.

This new immigration environment requires that businesses develop innovative strategies and practices aimed at securing, retaining and supporting foreign national employees.

Taking Action Faced with these new realities, businesses should ramp up communication efforts with foreign national employees and new hires. They should circulate information to employees about immigration changes through email or an internal company website. Companies should enlist their immigration service provider to hold calls, meetings and town hall sessions with employees to discuss their immigration status and strategies for maintaining valid work-authorized status going forward. Starting green card applications for valued employees earlier to avoid having to renew temporary work visas is among the strategies companies can adopt.

For new hires, companies should involve outside counsel early in the hiring process to make sure everyone understands the challenges associated with onboarding a candidate. It’s important to make sure all internal stakeholders—including talent acquisition, human resources and even business managers—are aware of any immigration-related pitfalls.

Companies should start the planning process early and engage in contingency planning where needed. If an employee will need to transfer from Bangalore to Los Angeles to work on a complicated technology project, for example, the transfer process should begin as early as possible to account for delays outside of a company’s control. Contingency planning is important as well. If the Bangalore-based employee is unsuccessful in securing a visa, is there another resource who has the skills to assist with the technology project in Los Angeles? There should always be a Plan B. Companies should ensure they have the right external resources in place.

An immigration service provider with expertise in business immigration issues can help with the cases themselves and partner with a company to navigate the evolving compliance challenges associated with employing foreign nationals.

The Trump Administration has said it will prioritize immigration enforcement, so companies should expect to respond to government investigators checking that employment-related immigration matters are in order. The best way for companies to protect themselves in the new era of business immigration is to develop a strategic program that is compliant, adaptable and well-informed. // Chad Blocker is a partner in Fragomen’s Los Angeles office. His practice includes all aspects of corporate immigration.

Emily Allen is an associate in Fragomen’s Los Angeles office and counsels corporate clients in corporate immigration, with a focus on the retail and technology sectors.

MIDDLE MARKET GROWTH // MAR/APR 2019

15

VERTICAL VIEW

Investing in Human Capital Services M&A deal flow involving human capital services

Among the largest M&A transactions in the human

businesses—from recruiting platforms to staff

capital services industry in the past five years

management tools and training software—is on

was AmSurg Corp.’s $2.35 billion acquisition of

the rise. Fifty-seven buyouts closed in 2018 as of

Sheridan Healthcare, which provides clinical and

Dec. 1, up from 54 in 2017 and just 23 in 2011.

management services for anesthesia outsourcing and other specialty areas.

Buyout deal value in the human capital services industry peaked in 2017 at $6.4 billion, a figure

Staffing and recruiting businesses have increas-

derived using PitchBook’s extrapolation method-

ingly attracted investor interest. Strategic and

ology, up from a previous high of $5.6 billion

PE buyers closed 114 deals in this subsector in

in 2015.

2017, up from 62 in 2012.

There were 90 human capital services deals involv-

Four of the largest 19 deals in the staffing

ing strategic buyers in 2018, up from 32 in 2011. But

industry have involved targets focused on health

strategic deal flow slowed to just 77 deals in 2018,

care: Sheridan Healthcare, CHG Healthcare, Allied

as of Dec. 1.

Health Professionals and Medical Solutions.

Data provided by PitchBook

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MIDPOINTS by John Gabbert

When Tech Meets HR, Deals Happen

I

ntelligent machines and big data might have a leg up on human workers on some tasks, but there are areas where they can’t fully replace us. Imagine if a robot showed you the ropes on your first day on the job—would you trust it to get you up to speed on office politics or water cooler etiquette? Perhaps some things are better left to humans.

Yet nearly every industry is being upended by new technology. In the case of human resources, technological change is prompting companies to reimagine how they recruit, hire and train employees. Software, online platforms and other tools that support HR make up an industry known as human capital services—one that is undergoing significant consolidation and garnering plenty of interest from strategic buyers and private capital investors.

Corporate acquisitions over the past decade have included some well-known brands. In 2010, employment website Monster Worldwide acquired Yahoo! HotJobs for $225 million. Monster itself was acquired in 2016 by the staffing agency Randstad for $429 million. In 2012, HR services provider Recruit Holdings acquired job search portal Indeed for $1 billion. Six years later, Recruit bought company-review website Glassdoor for $1.2 billion, after the target had raised eight rounds of venture funding.

Many of today’s young companies are fueled by venture capital, and several well-funded startups will likely be plucked in the near future.

ZipRecruiter is one, having achieved

“unicorn” status last year after just two rounds of venture funding. The online job portal, now valued at $1.5 billion, claims more than 1 million employers have used its technology to hire, and more than 10,000 new companies subscribe each month.

If it is eventually acquired, I suspect the price tag could top $1.5 billion.

Strategic buyers aren’t the only ones drawn to this industry. Private equity firms invested at least $6 billion in human capital services providers in each of the past two years, and JOHN GABBERT deal counts are growing. Fifty-seven Founder and CEO, PitchBook deals were closed in 2018, a new record and more than double the volume seen in 2011.

Some of PE’s most prominent firms have shown interest in this space.

Apollo Global Management was part of a buyout team that acquired CareerBuilder, which once boasted the largest market share among online job portals. In 2017, Blackstone carved out Aon’s technology-enabled benefits and HR platform for $4.8 billion. Having “IN THE CASE OF HUMAN renamed the business as a RESOURCES, TECHNOLOGICAL standalone company, BlackCHANGE IS PROMPTING stone plans to take Alight COMPANIES TO REIMAGINE Solutions public at a value north of $7 billion. If they HOW THEY RECRUIT, HIRE succeed, other investors no AND TRAIN EMPLOYEES.” doubt will take note of the quick win.

Benefits management can seem dry, as can workforce management software, background checks and technical outsourcing. But as investors in these companies know, an industry doesn’t have to be thrilling to deliver strong returns. //

MIDDLE MARKET GROWTH // MAR/APR 2019

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QUICK TAKES

Igloo Brings the Office into the Digital Age

I

n a guide for Igloo Software’s digital workplace products, the company introduces its offerings with a simple phrase: “It’s about people.”

That focus on users—employees across a wide spectrum of industries, from education to retail—and developing them into engaged and productive workers has been the formula for Igloo’s success.

“More people recognize their assets go down the elevator and leave the building at night—if they were ever in the building to begin with,” says Andrew Lindner, a managing partner at Frontier Capital, a private equity firm that invested in Kitchener, Ontariobased Igloo in December 2017.

Igloo surpassed 1 billion monthly interactions on its next-generation intranets in 2017. At the same time, it expanded into 80 countries and added more than 190 enterprise accounts.

Frontier, a firm with more than 10 years of software and tech-enabled business services experience, saw potential in Igloo’s digital workplaces, especially at a time when business software is changing.

For the last few decades, software like Igloo’s, known as human capital management software or HCM, was restricted to simple human resources tasks like payroll and other administrative functions. Today, a shift in office culture is driving technological development to expand HCM’s capabilities and bring it out of the “dark ages,” Lindner says.

According to a study by the International Workplace Group, a multinational company offering virtual offices and video conferencing

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H Igloo’s digital workplace solution (Image courtesy of Igloo)

services, 70 percent of people worldwide work remotely at least once a week and one-third expect to telecommute full time over the next 10 years.

Igloo’s digital workplaces are designed with remote access in mind.

Hosted in the cloud, employees can access their preferred suite of productivity tools, such as Microsoft Outlook, Salesforce and other applications, from anywhere. And because they’re not stored on servers or a computer’s hard drive, it’s easier and cheaper to deploy and manage, according to Lindner.

By constructing a workplace in a unified environment, Igloo cuts down on the proliferation of applications where employees have more software than they need, which can be distracting and make workers less productive. Lindner says Igloo’s workspaces increase employee usage and productivity by reducing the clutter: “It actually delivers real engagement.”

For users who want more applications, Igloo’s software is modular and highly customizable.

Beyond greater user engagement,

the company offers another unique feature aligned with an emerging workplace trend.

According to Deloitte’s 2018 “Global Human Capital Trends” report, 69 percent of organizations are building integrated systems to analyze worker-related data. By leveraging information collected from employees, Igloo’s software can help employers evaluate their management strategies and how employees respond to them. This creates a “bidirectional” relationship between employees and employers, Lindner says.

Workers who are more productive are less likely to quit, and finding and keeping employees is becoming increasingly valuable in a tight labor market. For that reason, Lindner expects interest in human capital management software to continue. “I don’t think it’s a fad that companies are investing in the well-being and engagement of their employees.” // – Benjamin Glick

A QUALIFIED OPINION

Jason W. Downing Vice Chairman, Deloitte LLP, and US Deloitte Private Leader Jason Downing is responsible for the strategic direction and delivery of the full breadth of Deloitte’s offerings to private company and midmarket clients. MMG recently asked Downing about the impact of technology on the workforce.

“EXECUTIVES CITED RESKILLING AND REDESIGNING JOBS AS THE TOP TALENT STRATEGIES FOR AUGMENTING THE WORKFORCE THROUGH TECHNOLOGY.”

MORE ONLINE Read more from this interview at middlemarketgrowth.org.

Q A

How have new technologies impacted hiring at midsize companies?

Organizations are seeing the value of technology in driving change and enabling business value.

Talent is the make-or-break factor in midmarket technology deployment, helping these businesses navigate disruption. Deloitte’s recent “Mid-­ Market Technology Trends” report found that 33 percent of private company executives are investing 5 percent or more of total revenue on technology. What’s even more interesting is 46 percent of the survey respondents plan to hire more people after deploying emerging technologies and automation.

Another important consideration is Gen Z’s entrance into the workforce: 64 percent of respondents said they are working to implement new talent strategies to attract, recruit and retain an inclusive workforce. About 58 percent of respondents are using experiential learning methods such as gamification to improve the experience of Gen Z employees.

Q A

How are companies preparing their employees for technological disruption?

Training talent will be the key to unlocking the potential of emerging technologies. With

technology reshaping the future of work, the executives we surveyed ranked reskilling and redesigning jobs as the top talent strategies when augmenting the workforce through technology.

In fact, 61 percent of midmarket companies are reskilling employees to realize the greatest possible benefit from new technology tools, and 57 percent are redesigning jobs to ensure a seamless integration of people and machines.

When it comes to digital disruption, our technology survey respondents said that operations, customer service and marketing are the three business functions expected to see the most technological and job-related changes.

Q A

How is technology changing roles in the C-suite?

All C-suite hands are on deck in collaborating on strategies for emerging and next-generation technologies, with 87 percent of executive leaders either leading the charge or actively engaged. We also are seeing the role of chief marketing officer increase in importance as companies leverage technology to better connect with customers. //

MIDDLE MARKET GROWTH // MAR/APR 2019

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From left, Greyston Bakery lead supervisor Dion Drew, CEO Mike Brady and account manager Sunitha Malieckal in the bakery’s kitchen

Just Desserts Greyston Bakery’s ‘open hiring’ benefits society—and business

BY S.A. SWANSON

I

“

Photos by Richard Freeda

’ll get back to you.” Dion Drew heard that line a lot in 2008, when he interviewed for more than 20 positions. Some employers gave a him a more candid response: They didn’t hire workers with criminal records. That meant a dead end for Drew. At the time, he was 31 and had just served four years for selling drugs to an undercover police officer. He says he had been in and out of jail since age 17.

This time, Drew was determined to make money legally.

Then came nine months of job-search rejection. “I was angry, upset, and to be honest, I was ready to go back to selling drugs,” he says. That changed when Drew got a call from Greyston Bakery, asking if he’d like a job.

Greyston skips background checks, drug checks and reference checks. The company doesn’t even conduct job interviews. Under its recruiting model, called Open Hiring, all applicants need to do is enter Greyston Bakery and add their name to the job list. Unlike the companies who never got back to Drew, Greyston calls everyone on that list.

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Ten years and several promotions later, Drew still works at Greyston, now as lead supervisor. He is one of about 190 current employees who applied through the bakery’s Open Hiring program. Mike Brady, the company’s president and CEO, estimates about 60 percent of them have criminal records. Greyston employs others who’ve struggled to find work and many who never completed high school—among them, refugees, immigrants and veterans.

Those workers help the company bake 6.5 million pounds of brownies annually for customers such as Ben & Jerry’s, Whole Foods and Delta Air Lines. By generating more than $20 million in revenue last year, Greyston is demonstrating that its hiring approach isn’t just good for society, it’s good for business. Other companies competing for workers in a tight labor market have taken note.

“Employers are looking to grow, but they’ve got antiquated human capital models that are filtering all these people out of their workforce,” Brady says. Increasingly, he’s hearing from companies ready to cast a wider net. “They’re saying, ‘You guys seem to have a really progressive model. Can you help me find new team members?’”

PEOPLE-FIRST PHILOSOPHY

“EMPLOYERS ARE LOOKING TO GROW, BUT THEY’VE GOT ANTIQUATED HUMAN CAPITAL MODELS THAT ARE FILTERING ALL THESE PEOPLE OUT OF THEIR WORKFORCE.” MIKE BRADY President and CEO, Greyston Bakery

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Greyston was co-founded in 1982 by a Zen Buddhist teacher, Bernard “Bernie” Glassman, and his wife, Sandra Jishu Holmes. The company’s Open Hiring embodies a central tenet of Buddhism: Strive to be non-judgmental. For Greyston, that means not judging applicants’ past behavior.

After founding the company to employ his Buddhism students, Glassman realized the bakery could serve a larger purpose by hiring workers in south Yonkers, New York, where the business is currently based. Many residents in the area live below the poverty line and face employment roadblocks like criminal records or lack of education. The bakery’s Open Hiring policy means it will train and hire anyone who wants to work. “They will have a job if they can meet some basic requirements, like showing up to work on time,” Brady says.

GREYSTON BAKERY Business: Brownie supplier to Ben & Jerry’s, Whole Foods and Delta Air Lines

A position at Greyston, a certified B Corporation, begins with a 10-month paid apprenticeship.

Applicants are usually trained in groups of 10 through a program with three basic components: “worker readiness skills,” which include effective communication with colleagues and managers; industry-specific skills, such as food safety; and skills specific to Greyston, like mastering the ability to mix flour, sugar and cocoa for an 800pound bowl of brownie batter. About 40 percent of apprentices complete the training and join as full-time Greyston employees in the Local 53 union, part of the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union.

With a total of 250 employees, Greyston believes businesses that want a great product should focus on helping the people who make it. Its philosophy permeates weekly planning meetings, which address more than production schedules and sales projections. “There’s always a heavy people focus,” says Sunitha Malieckal,

Greyston’s account manFounders: Zen Buddhist teacher ager for Ben and Jerry’s Bernard “Bernie” Glassman and and the ice cream-makSandra Jishu Holmes er’s owner, Unilever. “We Location: Yonkers, New York ask, ‘Is there anything going on with anybody in Annual Revenue: $20 million particular?’” Before firing Hiring Criteria: Greyston will an employee who starts train and hire anyone who wants showing up late—or not at to work—no questions asked all—supervisors will first consider if an underlying problem can be fixed. To make Open Hiring work, their roles extend beyond the traditional hierarchy of manufacturing floors. “We are there as coaches and support staff,” Malieckal says.

To help employees flourish, Greyston cultivates partnerships with local community groups that provide social services, so the bakery can readily guide workers toward resources for child care, housing and other needs. The company

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H Greyson’s social justice story helps differentiate the company

“WE FOUND OVER TIME THAT WHILE THIS SOUNDS LIKE A VERY HUMANISTIC MODEL—AND IT IS—IT’S ALSO A GOOD BUSINESS MODEL.” MIKE BRADY President and CEO, Greyston Bakery

pays for a staff member from a large community service organization to be on-site at the bakery to have confidential discussions with employees and help them meet basic needs.

Malieckal recalls one couple working at the bakery who started having attendance problems.

It turned out they had been living on the street after a recent eviction. She says the community service representative was able to quickly find them emergency shelter and, ultimately, longterm housing.

‘ENLIGHTENED SELF-INTEREST’ “We found over time that while this sounds like a very humanistic model—and it is—it’s also a good business model,” Brady says. “Our recruiting costs are zero.” According to a Society for Human Resource Management survey for fiscal

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year 2016, the average recruiting cost per hire was $3,232 for U.S. manufacturing companies with fewer than 500 full-time employees. That figure excludes training costs for new hires, but it does include expenses associated with background checks, job fairs, online job boards and talent-acquisition software.

Companies use background checks as a way to find good employees by screening out the “bad” ones, but Brady questions whether that’s necessary. That outlook is shared by Victor Dickson, president and CEO of Safer Foundation, a Chicagobased nonprofit that provides training and jobplacement assistance for those who’ve served prison time. Between 2013–17, participants working to earn industry credentials using Safer’s programs had a re-arrest rate of about 10 percent, well below the national rate of roughly 40 percent.

Dickson sees the U.S. labor shortage affecting employers’ hiring attitudes in recent years, in industries such as manufacturing, transportation and health care. Some organizations, such as private equity-backed MOD Pizza and Johns Hopkins Health System, publicly discuss adding employees who’ve served jail time. In fact, Johns

Hopkins Health System conducted a five-year study of nearly 500 of its ex-offender employees and found that, compared with non-offenders, they were more likely to stay in their jobs for more than three years.

Not all businesses are forthcoming about employing former inmates. “Some of the companies were secretly hiring people with records and they’ve been doing it for quite a while,” Dickson says. “One owner of a local manufacturing company told me, ‘It’s enlightened self-interest … I really didn’t want my competitors to know where I was getting my talent.’ Because they are fighting for talent.”

Like any business, Greyston needs to deliver a quality product at a competitive price, but its humane approach to hiring helps the company stand out. “I lead with it any time I go into any customer meeting,” Brady says. “The differentiation of being a social justice story in their supply chain and us being able to make a positive impact in the community and being proud of that—it’s a tremendous differentiator for Greyston and our customers that we work with.”

Yet some people think Greyston’s approach sounds like a half-baked hiring plan. Brady says he’s heard from skeptics who wrongly assume the bakery contends with criminal behavior that comes at a high cost. “Our insurance rates are no different than any other bakery. Our worker comp rates are no different than any other bakery,” he says. “We’re not dealing with a whole bunch of craziness as a result of our model. If you walked into our facility, it would look like any other.”

Another frequent comment he hears: “I don’t really want to work next to a thief.” Brady responds to that by asking, “How do you know you’re not working next to one now?”

SWEET PARTNERSHIP For more than 25 years, Greyston has baked brownies for Ben & Jerry’s products. It’s the company’s largest brownie supplier, delivering about 3.5 million pounds of brownies annually used in ice cream flavors like Half Baked and Chocolate Fudge Brownie.

Three years ago, the companies added

“THERE IS A HEAVY FOCUS ON MAKING SURE THAT THE WHOLE STAFF REALLY UNDERSTANDS THAT WE ARE THERE AS COACHES AND SUPPORT STAFF, IN ADDITION TO BEING YOUR TRADITIONAL HIERARCHY MANAGING A MANUFACTURING FLOOR.” SUNITHA MALIECKAL Account Manager, Greyston Bakery

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“Ben & Jerry’s has always been inspired by Greyston’s Open Hiring process,” says Rob Bellezza, Ben & Jerry’s factory director. Over the past three years, the ice cream-maker developed a program it calls “values-led hiring.” Although it doesn’t duplicate the Open Hiring method, it’s meant to reflect Greyston’s inclusive approach.

Ben & Jerry’s now works with community organizations to help identify candidates who would often be overlooked in traditional hiring processes. They include youths who have aged out of the foster system, recovering addicts and women trying to re-enter the workforce.

Although the company doesn’t currently work with groups designed to support ex-offenders, Ben & Jerry’s did change its job application forms by removing check boxes that ask about criminal records.

“Part of the wonderful collaboration that we had with Mike [Brady] and the team at Greyston was that their model doesn’t have to be our model, and that Open Hiring may not work for everybody,” says Bellezza, who notes Ben & Jerry’s hiring program is still in its infancy. “But we also want to look at people for who they can be and not who they were.”

LIFE-CHANGING WORK

E Greyston employees bake 6.5 million pounds of brownies each year

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something new to their business relationship: an annual employee swap. For about a week, five Ben & Jerry’s employees work on the production floor at Greyston and participate in Greyston employee volunteer programs that support the surrounding community. Meanwhile, Greyston sends several of its employees to Ben & Jerry’s for the same purpose. “It’s something you would not see in many companies: a willingness to bring your customer onto your production floor to work with you,” Malieckal says.

middlemarketgrowth.org

At its Center for Opening Hiring—part of notfor-profit Greyston Foundation Inc., the bakery’s parent company—Greyston provides best practices and consulting services to help other organizations apply its hiring model. Brady expects Greyston’s employment philosophy to spread as consumers pressure companies to operate in more socially conscious ways. He also encourages business leaders to view Open Hiring as a way to attract millennial workers who prefer progressive employers. “Purpose-driven employees are looking for a reason to believe your company is different,” he says.

For workers at Greyston, “different” means life-changing. Since he started at the bakery 10 years ago, Drew bought a three-bedroom duplex and, for the first time, he purchased a car with money he earned legally. He believes that without this job, he’d be in jail or dead. That’s what

“ALL OF THE GOOD THINGS IN LIFE THAT I WANTED AND I THOUGHT I’D BE GETTING FROM SELLING DRUGS, I GOT FROM WORKING.” DION DREW Lead Supervisor, Greyston Bakery

life dealt more than half of his friends, he says.

“Or they are still in the street selling drugs.

Those are still the consequences.”

He’s been able to help 10 friends get jobs at Greyston. Some have criminal records, others don’t. “We all have problems,” he says. “Whatever problem you have, we are willing to work with you, and that’s what I love so much.”

Drew knows firsthand how crucial secondchances can be—and how mixing enormous bags of flour, cocoa and sugar creates more than brownie batter. “All of the good things in life that I wanted and I thought I’d be getting from selling drugs, I got from working.” // S.A. Swanson is a business writer based in the Chicago area.

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Mapping a New Career Benefit How companies are touting their location to attract talent

BY TAM HARBERT

T

he great Amazon beauty pageant, in which over 200 cities competed to become the site of the corporation’s second headquarters, spotlighted the role geography plays in a company’s growth plans. Location—especially a region’s quality of life and cost of living—has become an increasingly important factor in a company’s ability to attract and retain talent in a tight labor market.

In some cases, large urban centers are alluring, in spite of their high costs. Amazon proved this with its initial selection of the Crystal City neighborhood near Washington, D.C., and Long Island City outside of New York City. (In mid-February, it announced it was canceling plans to build the New York headquarters.) But increasingly, smaller, less-expensive markets are drawing talent. Some private equity firms have taken note and are using midsize cities to their advantage.

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“IF YOU’RE A MILLENNIAL AND YOU STAYED IN DETROIT AND RODE IT OUT, YOU’RE IN A REALLY GOOD POSITION NOW.” DAN ELLIS Director, Townsend Search Group

“There is a growing subset [of job candidates] that prefer secondary or tertiary markets because the cost of living and quality of life can be better,” says Keith Giarman, managing partner of the private equity practice at global executive search firm DHR International. He recruits executives for middle-market private equity firms, family offices and pension funds in North America. Some of his most recent searches were for positions in Wichita, Kansas, Salt Lake City, Detroit and Birmingham, Alabama.

LOW COST, HIGH APPEAL Private equity firms are finding more and more investment opportunities in smaller markets, notes Giarman, which is driving demand for qualified employees. That’s particularly true of software companies, he says, which are emerging in particular niches like logistics or just-in-time manufacturing. Often they prefer to be closer to their markets and may not require an army of engineers on-site. “These companies don’t have to be in Silicon Valley,” he says.

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The high cost of living in large coastal urban centers is starting to strain even healthy budgets. According to a 2017 survey of San Francisco-area residents by the Bay Area Council, a business-backed advocacy group, some 40 percent of all respondents and 46 percent of millennials said they were considering moving because of a lack of affordable housing, growing traffic congestion and generally high living costs. The San Francisco Chronicle reported in late 2018 that the median price of a house in the city is now $1.62 million, double what it was five years ago.

Only 18 percent of Bay Area residents can afford that price, according to the article.

In Boston, more than 67 percent of human resources professionals reported that home prices and rental costs affect their ability to recruit qualified candidates, according to a 2017 survey by Northeastern University and the Massachusetts Housing Partnership.

Giarman, who is based in San Francisco, has noticed that people are leaving the Bay Area. He cites Salt Lake City as a city that “is on fire right now,” especially in tech: “It’s really remarkable what’s happened there over the last five years.”

Phoenix is another area attracting San Francisco transplants, he notes.

Giarman is seeing reluctance among some job-seekers to move to high-cost areas. One candidate for the CEO spot at a private equity portfolio company in Los Angeles wanted to know early in the process whether the company could pay him a salary high enough to offset the higher living expenses compared with those in Houston, where he was currently living. That

differential was estimated at 30 to 40 percent.

The candidate wouldn’t proceed with discussions “unless we could assure him right up front that we would be in the ballpark,” Giarman says.

The firm couldn’t offer a high enough figure and talks ended.

Like the prospective CEO, many are finding the cost of living in Texas attractive, and that’s fueling a wave of migration into the state. Some 250,000 people are moving out of California each year, and 25 percent of them are going to Texas, says Matt Regan, senior vice president of public policy at the Bay Area Council, citing U.S. census data.

Individuals aren’t the only ones moving.

Companies are relocating or expanding to Texas from California and other high-cost states.

Their ranks include Toyota, Liberty Mutual and JPMorgan Chase. Tech companies Google, Facebook, Amazon, Dropbox and Oracle have opened offices or facilities in Austin. Apple said in December it was expanding its presence in Austin by building a billion-dollar corporate campus and creating up to 15,000 new jobs. And in November, McKesson Corp., the nation’s largest pharmaceutical distributor, announced it would move its headquarters from San Francisco to Irving, Texas.

Not all private equity firms are seeing a decline in the appeal of urban centers. Jon Lemelman, a partner with Riverside Partners in Boston, says the firm has no trouble hiring employees there. It often recruits from investment banking training programs and business schools. Because candidates tend to be young and single, they aren’t as concerned with costs of living. They want and expect to relocate to a big city, because that’s where the best jobs are, he says. “They have generally narrowed it down to Boston or New York City.”

As for hiring for portfolio companies, which are often in smaller metropolitan areas, Riverside often finds executive talent in major cities, and it can be a challenge convincing them to uproot their family and relocate to a smaller city, he says. “The cost of living for these people is less of a concern.”

“THERE IS A GROWING SUBSET [OF JOB CANDIDATES] THAT PREFER SECONDARY OR TERTIARY MARKETS BECAUSE THE COST OF LIVING AND QUALITY OF LIFE CAN BE BETTER.” KEITH GIARMAN Managing Partner, DHR International

WHAT’S OLD IS NEW AGAIN Many older industrial cities have refurbished and reinvigorated their downtowns to become more attractive to businesses and job seekers.

Detroit experienced a large influx of educated young adults: The 60 percent increase from 2012 to 2016 was the biggest gain in the country, according to City Observatory, a think tank.

Detroit was followed by Hartford, Connecticut, which had a 58 percent increase, and Orlando, Florida, with an increase of 56 percent.

Detroit’s revival has been led by high-networth individuals as well as community development groups with deep-pocketed corporate members. Dan Gilbert, founder of Quicken Loans, moved his company’s headquarters to Detroit in 2010 and has invested billions in downtown properties. (Among his many businesses is private equity firm Rockbridge Growth Equity.) Former Microsoft CEO and Detroit native Steve Ballmer is giving millions of dollars in grants to various nonprofits in the city.

But Detroit’s appeal isn’t based solely on lower costs, says Dan Ellis, a director at Townsend Search Group, which recruits executives for midmarket private equity firms and their portfolio companies, with a specialty in finance and accounting. Its culture and the new job opportunities add to the city’s attractiveness. Detroit has Midwestern character, which appeals to people who grew up in the middle

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NOT ALL PRIVATE EQUITY FIRMS ARE SEEING A DECLINE IN URBAN CENTERS. FOR SOME, CONVINCING AN EXECUTIVE TO MOVE TO A SMALL CITY IS THE CHALLENGE.

of the country, Ellis says. The pace can be less hectic, the commutes more convenient, and the work-life balance more sane.

As for opportunity, Detroit lost a lot of talent during the years following the financial crisis.

(The city filed for bankruptcy in 2013.) As a result, demand for qualified employees has outstripped supply. That means there are plum jobs for so-called “up and comers”—job-seekers who in the past may have been considered too young for an executive position like CFO. Ellis looks for such people, who may be in their late 30s or early 40s with solid experience and good track records. “If you’re a millennial and you stayed in Detroit and rode it out, you’re in a really good position now,” he says.

For Detroit natives who have since moved away, Ellis conducts research to find their ties to the city and then reaches out to say, “Hey, how would you like to come home?”

Family often becomes more important as millennials marry and settle down, and that can be a draw for young professionals. “Maybe they just had their first child, and the grandparents are in Detroit,” he says.

Often candidates are excited about the resurgence of the city. “To be a part of that—it’s almost a different aspect of fulfillment,” Ellis adds. “It’s about being a part of something that’s bigger than yourself.” // Tam Harbert is a freelance journalist based in the Washington, D.C., area.

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POLICY POINTS

A Lens into SEC Enforcement Agency stresses quality over quantity in compliance efforts

F

MARIA WOLVIN Vice President and Senior Counsel, Public Policy, ACG Global

MORE ONLINE Find updates and insight on policy issues at middlemarketgrowth.org.

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or entities regulated by the Securities and Exchange Commission, understanding enforcement priorities provides transparency for how enforcement decisions will be made. As a result, it is critical to pay attention not just to enforcement actions, but to how SEC leadership characterizes the agency’s enforcement efforts.

Recently, the SEC’s Division of Enforcement released its second annual report highlighting several significant actions and initiatives that took place in fiscal year 2018. According to the report, the SEC’s enforcement work is guided by focusing on the Main Street investor and individual accountability, keeping pace with technological change, offering solutions that improve enforcement goals, and assessing resource allocation.

The report demonstrates how these principles led to the SEC’s primary focus on protecting Main Street investors from bad actors and fraudulent conduct in 2018. The report also imparts another important message from the co-directors of the SEC’s enforcement division: Success should not be solely measured by the sheer number of cases brought or the number of fines imposed. Instead,

they believe assessing the quality and impact of the SEC’s enforcement actions is a better measuring stick of success. “Are we deterring future harm by bringing meaningful cases that send clear and important messages to market participants?” the report asked.

Around the same time the report was published, SEC Commissioner Hester Peirce gave a speech that echoed the same theme of quality over quantity when it comes to SEC enforcement. She stated that the SEC must concentrate on serious violations of securities laws rather than spending vital resources pursuing perpetrators of minor infractions. Peirce argued that the SEC should resist the temptation to focus on quantitative metrics alone and instead concentrate its resources in areas in where it can make a real difference—namely on rigorously protecting investors and maintaining the integrity of the capital markets.

While the message coming from the SEC should help quell fears of entities who employ robust compliance programs, it nevertheless remains critical to maintain such programs to avoid being the subject of a future SEC enforcement action. //

“IT IS CRITICAL TO PAY ATTENTION NOT JUST TO ENFORCEMENT ACTIONS, BUT TO HOW SEC LEADERSHIP CHARACTERIZES THE AGENCY’S ENFORCEMENT EFFORTS.”

SEC Small Business Forum Focuses on Midwest and Minority-Owned Business Hurdles

D

espite robust lending and record levels of private equity dry powder, capital is still hard to come by for many small and medium-sized businesses looking to expand.

For businesses located in Midwestern states or those with minority owners, there are even steeper disadvantages when it comes to raising capital, participants told senior members of the Securities and Exchange Commission at the SEC’s 37th Government-Business Forum on Small Business Capital Formation.

“There’s tons of water and there are people who are thirsty,” says Thomas Stewart, the executive director of the National Center for the Middle Market at Ohio State University, which hosted the forum on Dec. 12.

During two panel discussions and multiple interactive breakout sessions, around 200 forum participants from the business, legal and government community around the Midwest developed recommendations for government action to improve the regulatory landscape for small businesses.

Participants included CEOs, lawyers, business development groups, state capital markets regulators, economic development groups, scholars, private equity firms and trade associations who voiced concerns to SEC Chairman Jay Clayton. Also in attendance were commissioners Robert Jackson, Hester Peirce, and Elad Roisman, along with members of their senior staff.

The forum’s panelists discussed

E Dr. Anil Makhija, dean of Ohio State’s Fisher College of Business

challenges faced by small and midsize companies in their search for capital.

Chairman Clayton said investors and entrepreneurs have an appetite for small business investment, but much of the investment activity remains highly concentrated on the East, West and Gulf coasts, an assertion supported by data. Of the nearly 5,000 private equity and more than 11,000 venture capital deals in 2018, the majority of activity was concentrated in New York, California, Texas and Florida, according to PitchBook.

That isn’t great news for Midwestern startups and scaleups working in areas like AI and industrial design that often go overlooked, Stewart says. “I heard someone say that on the West Coast there is no doubt somebody is working on an app to deliver avocados by drone. Investors might

see an opportunity there, but they might be blind to opportunities here in industrial cities.”

Panelists said regulators could help expand access to capital by revising the definition of an accredited investor. Currently, only individuals with incomes of $200,000 or higher, or a net worth of more than $1 million, are permitted to invest in private equity funds. Yet those dollar amounts come with very different purchasing power for an individual in San Francisco compared with someone in Boise, Idaho, making those criteria imperfect proxies for wealth.

Rather than basing accredited investor status on income, panelists suggested a shift to experience-based qualifications, such as education level or professional expertise in finance. A similar modification was proposed in

MIDDLE MARKET GROWTH // MAR/APR 2019

35

POLICY POINTS

E SEC officials at the Government-Business Forum on Small Business Capital Formation

the JOBS and Investor Confidence Act of 2018, a bill passed by both the U.S. House of Representatives and Senate.

The bill died after the two chambers failed to resolve the differences in their respective versions of the legislation.

During a second panel at the forum

“I THINK THIS IS THE OPENING OPPORTUNITY TO BEGIN TO HAVE A CONVERSATION THAT STARTS TO IDENTIFY WHAT THE MIDSIZE BUSINESS CAPITAL FORMATION LANDSCAPE IS LIKE.” THOMAS STEWART Executive Director, National Center for the Middle Market

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that explored capital formation for businesses, panelists agreed the complex process of raising capital intimidates entrepreneurs, leading to a lack of access to capital markets.

They suggested further education is needed to help founders looking for growth capital. Falon Donahue, CEO of entrepreneur-focused nonprofit VentureOhio, added that the Volcker Rule, which restricts banks’ ability to invest in private equity and venture capital funds, has created a bottleneck for venture capital investment in underdeveloped communities.

During the sessions, participants narrowed their list of recommendations to be submitted to the SEC, which the agency must respond to and may use to inform policymaking.

“From my point of view, I think this is the opening opportunity to begin to have a conversation that starts to identify what the midsize business capital formation landscape is like,”

Stewart says. “I think we’ve barely begun to scratch the surface on that topic. But the topic is on the table.”

The annual forum was established by congressional mandate in 1982 to provide a platform to draw attention to the difficulties small businesses face when trying to raise capital. For the forum’s first 35 years, it was held in Washington, D.C., but in 2017, it moved outside the capital for the first time to the University of Texas at Austin.

According to statute, the SEC must respond this year to recommendations made by business leaders. A report summarizing the discussion is typically published four to six months after the forum. It will include a recap of the proceedings and a list of the participants’ recommendations to the agency. // –Benjamin Glick

GROWTH ECONOMY

VERMONT // 1998–2017 Over the past two decades, private equity-backed businesses in Vermont grew jobs at more than three times the rate of the broader business community. Sales fared even better. Revenue from private equity-backed companies grew at more than 10 times the rate of other businesses in the state since 1998. While M&A activity has remained light in recent years, Vermont was the site of a notably large deal in 2016: the $15 billion buyout of Keurig Green Mountain.

The bulk of private capital-backed companies are located in and around Burlington.

JOB GROWTH % BY SEGMENT

SALES

0% 22.9% 0% 77% 0%

197.4%

SALES GROWTH IN PE-BACKED BUSINESSES

SALES GROWTH % BY SEGMENT 2.3% 85.8% 0%

18.6%

12% 0%

SALES GROWTH IN ALL BUSINESSES

Small: Less than $10M in sales MM Seg 1: $10-50M in sales MM Seg 2: $50-100M in sales MM Seg 3: $100M-1B in sales Large: More than $1B in sales

JOBS

GROWTH IN PE-BACKED BUSINESSES

GROWTH IN ALL BUSINESSES

JOBS CREATED

BY PE-BACKED BUSINESSES

75.6%

21.5%

1,467

MORE ONLINE See the impact of middlemarket private equity on your state at GrowthEconomy.org.

All stats are from PitchBook and the Business Dynamics Research Consortium at the University of Wisconsin-Extension.

MIDDLE MARKET GROWTH // MAR/APR 2019

37

THE PORTFOLIO

Is Your Process Sabotaging Your Search?

SOUND DECISIONS // Don’t let skilled talent slip through the cracks

G Jill Chapman Senior Performance Consultant, Insperity

reat employees can catapult you to even greater business success, but when your focus isn’t on the value of human capital, your productivity, bottom line and investor appeal may suffer.

Have you ever found the right employee for a job, but before you make an offer, that promising candidate accepts a job with one of your competitors? If this happens often, you could be losing candidates to your own process. It may require taking a stroll in their shoes to learn how to improve the hiring experience. Here are some tips: Craft a Brand Experience Whether you realize it or not, job seekers view your organization through a consumer lens. A favorable, positive impression of your brand and your company is likely to be shared with peers, on social media and beyond. Even ­candidates you don’t hire can become great brand ambassadors.

Streamline Employment Screening What seems like due diligence to you may seem unnecessarily long and frustrating to your ­candidates. To eliminate hold-ups in your screening process: Have signed disclosures and consent forms for third-party background checks.

It’s the law. Depending on jurisdiction, you may not be able to conduct criminal background checks until after a conditional offer of employment.

Provide your vendor correct information.

Lots of people have the same or similar names.

Confirm the name, spelling and Social Security number of your candidate before sending it to your vendor. It’s a turn-off when candidates are contacted for verification.

Create and use a consistent written policy.

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This ensures all candidates are treated the same and helps you determine unnecessary checks that can be eliminated.

Provide adverse results in a timely manner.

Again, it’s the law. Candidates must be given the opportunity to challenge the report. Don’t sit on negative results because you don’t want to hurt any feelings or you’ve disqualified a candidate.

Use Talent Assessments Thoughtfully Talent assessments can help you guide employment development, but they can sometimes feel negative and cumbersome and can result in candidate drop-offs, so choose them wisely.

Communicate Consistently with Job Candidates Engagement on a regular basis is essential to keep talented candidates interested. Tell promising candidates what screening checks you’ll perform and how long they should take.

Engage with candidates consistently and periodically and be sure to communicate even if you don’t hire a candidate. They may have the skills you need at a later date or might refer your next star employee. You don’t want to risk leaving a bad impression.

Focusing on your hiring process can pay big dividends in the human capital game. By finding top talent and ensuring they become top employees, you can make your company as attractive as possible to potential investors. // Jill Chapman is a senior performance consultant for Insperity Traditional Employment Solutions, where she is responsible for talent attraction methods and technologies. To learn more, visit insperity.com/acg.

Content Provided by ACG Partners and Featured Firms

THE PORTFOLIO

Managing Human Capital Abroad GLOBAL VIEWS // Three rules to follow when expanding internationally

F Rob Wellner Senior Vice President of Sales,

or companies embarking on international growth, the most immediate concerns tend to be financial, strategic and regulatory. But an organization’s human capital— not just the “hard” business topics mentioned above—can be the linchpin of any expansion.

There are three key rules that apply to almost any international expansion that’ll help you manage the human aspect of your growth and, in the process, secure the business outcomes for which you’re accountable.

Velocity Global

Develop Your Soft Skills Guiding a company into international markets requires skills and priorities that many leaders might think of as “soft.” Have you created a culture that can thrive on change? Have you reckoned with cultural difference and the need to be flexible? What about defining a human-

IN A SUCCESSFUL EXPANSION, YOU’LL NEED TO ATTRACT AND RETAIN A GROUP OF SPIRITED AND ABLE ADVOCATES WHO ARE WILLING TO PUT THEIR NECKS ON THE LINE FOR YOUR SUCCESS. focused mission that not only reminds your employees why they come to work each day, but also draws in new ones for something other than a paycheck?

In a successful expansion, you’ll need to attract and retain a group of spirited and able advocates who are willing to put their necks on the line for your success. They won’t do that if you treat them like automatons, so build up your company culture at the same time that you’re addressing the “hard” aspects of business strategy, financials, etc.

Content Provided by ACG Partners and Featured Firms

Don’t Do It Alone Although drastic change makes it tempting to double down on insular, controlled management of processes, this is actually the time to resist such an urge.

Why? Sheer practicality. If you’re like most, you can’t manage every aspect of an expansion by yourself. This is why your choice of partners can be so critical. You’ll likely need help with transactions, regulatory environments, finance and more. Enlist a strategic partner to manage those factors for you, and then you can move on to tasks that are a better use of your time and effort.

Also, trust your own people, not just your consultancy. The most successful organizations are ones that allow their people to exert their talents in an unfettered way.

Change to Be Permanent The value of an idea lies not in its constancy but in its adaptability. Likewise, the ongoing value of your company—to your customers, shareholders, and to the world—depends on whether you will be nimble enough to live out your guiding principles in fresh, new ways.

The only viable view of human capital and talent is a holistic one, so inventory your human assets, have faith in them, bring on new allies to help you make sense of it all, and remind yourself that your business is about, above all else, people. // Rob Wellner, Velocity Global’s senior vice president of sales, draws on 12 years of experience in capital markets to help organizations expand internationally, including using Velocity Global’s International PEO service to overcome challenges associated with global M&A. For more information, visit velocityglobal.com/acg.

MIDDLE MARKET GROWTH // MAR/APR 2019

39

ACG@WORK

H ACG DALLAS/FORT WORTH The 2018 ACG Dallas Fort Worth Dealmakers Charity Golf Tournament was held at the Cowboys Golf Club, where 144 golfers helped raise a record $10,000 for the First Tee of Dallas, a youth development organization that introduces young people to golf. This was the chapter’s 13th annual tournament, and it drew representatives from 80 companies in the DFW area.

GREAT LAKES ACG CAPITAL CONNECTION F The 10th annual Great Lakes ACG Capital Connection was held in Indianapolis with more than 1,100 attendees. The conference program included a panel session titled “Avoiding an Integration Trainwreck.” Its panelists (pictured) included Kip Irle of Hylant, Cam Hitchcock of XLerate Group, Cheryl Strom of The Riverside Company, Matt Fortunak of Owens Corning, and Jeff Jackson of BlueWater Partners.

H FLORIDA ACG CAPITAL CONNECTION ACG’s Orlando, South Florida, North Florida and Tampa Bay chapters hosted their 17th annual Florida ACG Capital Connection with more than 600 attendees—a record for the event. This year’s conference in St. Petersburg featured Steve Forbes, chairman and editor-in-chief of Forbes Media, as the keynote speaker. The event also featured ACG Capital Connection (pictured) and a women’s lunch, a new addition to the conference.

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H ACG TORONTO ACG Toronto hosted its 16th annual ACG Capital Connection, which serves the mid-market investment sector in Canada. This year the conference drew more than 600 attendees, and featured over 60 speakers and more than 50 sponsoring firms.

Its sessions included a panel focused on cannabis investment. Pictured from left are panel moderator Wendy Hulton of Dickinson Wright LLP, Graham Marr of Bridging Finance, Dr. Terry Lake of HEXO Corp., Jeannette Harkin of GrowForce, and Insue Kim of Tsunami Partners LP.

G ACG TORONTO ACG Toronto kicked off its ACG Capital Connection conference at The Rec Room Roundhouse, where attendees—including Sandy Thompson of SLR Consulting, John Colleymore of Olive Ltd and Richard Barnowski of Cancor Debt Agency (pictured)—had the opportunity to network while a Beatles cover band played.

E ACG ATLANTA The 2018 Atlanta Deals of the Year event brought together 225 attendees to honor (from left) Ben Jackson of Intercontinental Exchange, Ed Croft of Croft & Bender, Shyam Reddy of BlueLinx Holdings, and David Zalik of GreenSky. Intercontinental Exchange was awarded the title Dealmaker of the Year. Economist and actor Ben Stein gave the event’s keynote address.

MIDDLE MARKET GROWTH // MAR/APR 2019

41

ACG@WORK

G ACG DETROIT ACG Detroit’s annual Mingle Bells event raised over $50,000 for charity organizations in Southeast Michigan, and in 2018, the chapter launched a program to extend its involvement with the 2017 Mingle Bells charity, HAVEN, a program for victims of domestic violence and sexual assault. Pictured from left are ACG Detroit Cares committee members Christopher Letts, Tracy Arceci, Andrew Dickow, Jennifer Jennings and Doug LaLone at this year’s Mingle Bells event. (Photo by Patrick Gloria for DBusiness.)

E ACG BOSTON The ACG Northeast Industry Tour: Healthcare Conference held its last leg of the tour in Boston.

This collaborative new series also made stops in other cities to leverage the larger ACG community.

The tour visited Philadelphia, where the focus was SaaS, and New York, with the focus of industrial manufacturing. More than 140 deal-makers heard from keynote speakers and participated in one-­on-one meetings to better understand the health care sector.

H ACG DETROIT ACG Detroit hosted a quarterly lunch and learn as part of its Driving Business Value series. The November session, “Uncovering the Blindspots of the M&A Deal Journey,” was hosted by the chapter’s Women’s Forum group at the Birmingham Country Club with 115 attendees. Pictured from left are the event’s featured speakers: Jennifer Fondrevay of Day1 Ready, Dan Ellis of Townsend Search Group, Emily Murto of Stratford-Cambridge Group, and Ellen Clark of Greenwich Capital Group.

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ACG RALEIGH DURHAM F ACG Raleigh Durham hosted its inaugural event in Greensboro, North Carolina, featuring a local business owner who spoke about his experience selling his company to a private equity-backed strategic buyer. The event drew 86 attendees and was hosted by executive recruiting firm Charles Aris and sponsored by the law firm Fox Rothschild.

G ACG PHILADELPHIA The Women in Dealmaking panel took place at ACG Philadelphia’s M&A East Conference as part of the Round Table series. Attendees gathered to hear boardroom insights from Kristy DelMuto of LLR Partners; Denise L. Devine of RTM Vital Signs LLC, AgroFresh Inc. and Fulton Financial Corporation; Christine Jones of Blue Highway Capital; Aliya Khaydarova of Inverness Graham Investments; and Jennifer Mantini of PwC and Forum of Executive Women.

MIDDLE MARKET GROWTH // MAR/APR 2019

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ACG@WORK

E ACG NEW YORK ACG New York hosted its 16th Annual Private Equity Wine Tasting Gala. Seven hundred people gathered from leading middle-market private equity firms to network while sampling wines. This event was held as part of the chapter’s Middle Market Week.

ACG NEW JERSEY F ACG New Jersey’s Advancing Leadership Influence group hosted a networking hatchet-throwing event.

Known as ALI, the group is made up of individuals who are working to elevate their careers and bolster their professional network through the development of peer relationships. Pictured from left are Marisa Tuch of Nick Day Law, Jemi Lucey of Greenbaum, Rowe, Smith & Davis, and ACG New Jersey Board Member Cheryl Moss of Friend Skoler & Co.

CONTACT Want to share photos from your recent chapter event? Email us at editor@acg.org.

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THE LADDER

Corporate Valuation Advisors Inc. announced FRANCIS (FRANK) MARCUCCI JR. has joined the firm as national director, business development. Marcucci will focus on leading and expanding the firm’s valuation services practice in New York, the Northeast corridor and the Midwest. Previously, Marcucci was national director for EAC Valuations.

RSM US LLP announced that DAN PELTZ has been promoted to partner in the firm’s Transaction Advisory Services practice. Peltz provides buy- and sell-side financial due diligence to private equity investors and corporate acquirers. Since relocating to South Florida in 2014, Peltz has been critical in achieving significant growth for the firm in the Southeast.

TIM KOCH joined Frazier & Deeter, a nationally ranked public accounting and advisory firm, as partner. Koch will lead the firm’s Transaction Advisory practice. He brings experience of middle-market buyside and sell-side transactions for private equity and corporate clients.

CLAUDINE COHEN was named Northeast market leader for CohnReznick’s Transactional Advisory Services practice, which she has played a leading role in growing since she joined the advisory, assurance and tax firm four years ago. She previously served as co-leader of CohnReznick’s Financial Sponsors Industry practice.

Duane Morris partners MICHAEL C. HARDY and NANETTE C. HEIDE were named co-chairs of the firm’s Private Equity Group. Hardy is based in Duane Morris’ Baltimore and Washington, D.C., offices and serves on ACG Maryland’s board of directors and executive committee.

Heide, based in the firm’s New York office, has served as a member of ACG New York’s board of directors and co-founded its committee for women’s programs and formerly chaired its women of leadership committee.

DANIELA MESSINA joined Avante Capital Partners in Boston as director of business development and investor relations. Messina began her career in investor relations and later served as deputy general counsel for the Massachusetts Office of Consumer Affairs and Business Regulation. For nearly a decade, she was director of business development for Nixon Peabody’s private equity and family office practice.

DEBORAH ENEA has been elected to the partnership of Pepper Hamilton LLP, where she focuses her practice on leveraged finance transactions. Prior to practicing law, Enea spent 10 years working in commercial lending on the business side.

MORE CAREER INFO Watch for more career information in The Ladder monthly e-newsletter.

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D E A LS

W IT H O U T

B O R D E R S .

R E G IS T R AT IO N IS

NO W

11– 12

O P E N.

J U NE

H I LT O N

2019

L O ND O N

B A NK SI D E L O ND O N,

U K

E U R O G R O W T H .O R G

© 2019 Association for Corporate Growth. All Rights Reserved.

IT’S THE SMALL THINGS

TRENDS IN HUMAN CAPITAL // America’s got talent

1

‘Alexa, Find My Next Hire’ As the U.S. unemployment rate remains below 4%,

5

The Gig Is Up Tech companies like Uber brought newfound

employers are increasingly turning to software

attention to independent workers that make up the

companies to match workers and jobs. Using

so-called gig economy, although there’s been no

sophisticated algorithms, these services may soon

growth in the share of gig workers since the mid-

give employers access to a wide range of prospec-

90s, according to the Bureau of Labor Statistics.

tive workers they might not have found otherwise.

Today, gig labor makes up only 1% of employment

—The New York Times

in the U.S., stymied by a tight labor market, slower outsourcing and public policies encouraging tradi-

2

Culture Is King

tional work arrangements. —The Conference Board

Money isn’t enough to lure a job-seeker into a toxic job environment, according to research from LinkedIn. In a survey of 3,000 Americans, 70% of

6

Arrested Development Near-record unemployment rates are opening

respondents said they would turn down a job offer

doors for the roughly 8% of working adults with fel-

with a lousy work culture, and a large majority said

ony records. Minnesota is among the states where

better pay would not persuade them. —Quartz

organizations are helping to retrain the formerly incarcerated, and counties in the state are organiz-

3

Soft Skills, Hard Data

ing job fairs that are drawing a growing number of

Losing good employees can be costly, so manag-

companies looking to recruit them.

ers are turning to software products that examine

—Minnesota Public Radio News

“people data” to help prevent turnover. The tools analyze employee performance and help managers understand how their leadership style is working. In some applications, software can even give tailored suggestions on what actions managers should take to make improvements. —Entrepreneur

4

Baby Steps More companies are encouraging men to take parental leave, which can level the playing field for women. Companies like EY and American Express offer generous paid-leave policies for both parents, reflecting their belief that by encouraging fathers to take time off, they can help improve the leadership pipeline for women and increase employee loyalty and retention overall. —Fast Company

—Benjamin Glick

SEE WHO’S STEPPING UP TO THE PLATE…

© 2019 Association for Corporate Growth. All Rights Reserved.

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