Friday Letter: Good for family business

KKR’s changes to its family-related benefits, revealed this month, include a basic amendment. It extends paid leave for new parents from the US industry norm of 12 weeks to 16, giving parents more time at home with their newborns. The firm follows in the footsteps of Blackstone, which announced a similar tweak to its maternity policy in April.

KKR’s offer has been extended to employees who adopt or use a surrogate, the last a nod from one of the best-known firms in the business to more modern family structures. Non-primary caregivers now benefit from 10 days paid leave, up from five. And the firm introduced a “transition support” programme to help new parents return to work.

The changes include a further sweetener. The firm has made it a matter of policy that it will pay for employees to bring their baby and its caregiver with them on business trips, footing the cost of the nanny, the travel, hotel and food bills. The perk reportedly spans the gap between an employee returning to work from parental leave and the child’s first birthday. It is the only buyout firm to offer such a benefit.

KKR deserves the applause heaped on it from industry watchers for putting its money where its mouth is. Through its benefit scheme, the firm has proved that talk about changing its ways to attract more women was not just lip service.

By acknowledging the needs of working parents, particularly mothers, and their families, the firm is following through on its pledge to make itself more attractive to a more diverse group of talent.

But it doesn’t go far enough.

For an industry that prides itself on innovation, it is still way behind the curve on gender balance. Firms need to do much more to persuade talented women that private equity is a place they want and can put their skills to work. Although more female faces are found in investor relations roles and environmental, social and governance policy positions, women dealmakers and managers are still all too rare a find.

According to Bloomberg, which first revealed the KKR changes to its parental policy, across the 10 biggest US buyout firms, only one in 10 senior managers is female. This is a paltry number.

At KKR, 12 of its 93 senior managers are women, equivalent to about 12 percent of senior management, up from just four out of 71 in 2012. It an improvement but from an almost standing start.

KKR is bettered by Blackstone, which has 58 female senior professions compared to 312 men, equivalent to about 16 percent of its senior staff, up from 36 women to 256 men, equivalent to 12 percent, in 2012. Carlyle beats them both with 37 women in senior roles compared to 228 men, equivalent to 14 percent. But the total, according to Bloomberg’s data, actually marks a slight decline in the representation of women in senior positions, which stood at 14.4 percent in 2012.

The industry must think creatively about how to recruit and retain female expertise. It could start by more firms offering more extended and flexible parental leave and more family friendly working hours. 

After all, to paraphrase KKR’s George Roberts: Diversity = creativity. And that can only be good for performance.

PS:
In early December, Private Equity International will hold its Women in Private Equity Forum 2015 in London. For details, click here.