November 12, 2025
Nine leading-edge private investment firms demonstrate the industry’s potential to drive economic advancement for millions of workers, but impact at scale proves challenging for a variety of reasons.
With more than 13 million people employed across the country, private equity (PE) is currently the second largest employer in the United States, second only to the federal government. In addition, it’s an industry sector that’s expected to nearly triple in global market size over the next 10 years. Given that scale of reach across the workforce, PE has the potential to increase job quality for the 60% of workers who do not have one and achieve Jobs for the Future’s North Star goal: By 2033, 75 million Americans facing barriers to economic advancement will work in quality jobs.
But while PE has a reputation for eliminating jobs, rather than creating or improving jobs, there’s a group of industry leaders with a growing appreciation for the role employees play in driving value creation at the companies in their portfolios, and they’re exploring a variety of approaches for embedding responsible talent management practices into each stage of the investment life cycle.
In the spring of 2025, with generous support from The Families & Workers Fund, JFF launched the PE Job Quality Initiative to start a conversation among leading-edge private investment firms about the link between talent management and value creation. This effort expands on the perspectives JFF shared in two groundbreaking 2024 reports that highlighted private equity’s potential to generate millions of quality jobs and drive economic mobility at unprecedented scale. The initiative sought to dig deeper into specific strategies and practices being implemented at PE-backed businesses to generate and measure growth and financial returns through people-focused value-creation models in tandem with well-established cost-focused value-creation models.
The American Job Quality Study finds that employees without quality jobs tend to report lower job satisfaction — an indicator linked by previous research to lower engagement, reduced productivity and higher turnover. In short, job quality can affect workers’ organizational performance, and responsible talent management practices can contribute to quality jobs.
Our goal was to explore what’s needed to expand adoption of these practices. We aimed to identify effective approaches that could be broadly implemented while finding ways to fulfill critical needs and overcome barriers that firms and employers might encounter as they pursue these initiatives.
In partnership with CapEQ, a private-sector advisory firm with deep knowledge of and expertise in private equity, we aimed to achieve the following objectives:
The work was made up of two complementary engagements that occurred simultaneously and included nine private equity and debt management firms. Six firms participated in group discussions as part of a community of action, and representatives of five firms met with CapEQ researchers for deep-dive one-on-one interviews to explore data use in quality jobs initiatives. Two firms, including one that didn’t participate in either the community of action or the deep-dive discussions, agreed to be the subjects of profiles offering a more in-depth look at their operations and strategies.
JFF and CapEQ recruited firms based on our knowledge of their existing practices and their willingness to participate.
Over the course of five months, six PE firms participated in facilitated group discussions to explore industry trends, successful approaches, and implementation challenges while engaging in a variety of peer learning activities.
Participating Firms:
Representatives of five PE firms met one-on-one with CapEQ researchers to engage in deep-dive discussions exploring quantitative and qualitative aspects of data practices, definitions, policies, outcomes, and approaches to measuring financial returns on practices that improve the quality of jobs.
Participating Firms:
Apis & Heritage Capital Partners
A private equity firm that specializes in converting profitable lower- and middle-market businesses into 100% employee-owned companies through its Employee-Led Buyout (ELBO) approach. Focusing on companies whose workforces are largely people of color, A&H says its mission is to address the racial wealth gap and promote economic equity by empowering workers to build wealth. A&H was awarded the 2025 Skoll Award for Social Innovation.
Blackstone
Blackstone is a global investment firm and one of the world's largest alternative asset managers, with $1.2 trillion in assets under management. Marcus Felder, Managing Partner and Head of Career Pathways at Blackstone, says “The Career Pathways program aims to broaden the high-quality talent networks from which the portfolio companies recruit, develop, and advance talent from communities that are historically untapped in quality jobs, including people without a four-year college degree, people with disabilities, and veterans.” Blackstone says the program is designed to improve hiring practices and create workplaces where opportunities for advancement are accessible to employees of all backgrounds.
Building Industry Partners
BIP is a leading investment firm that focuses on the U.S. building industry. Established in 2008, BIP has implemented broad-based employee equity and other human capital management programs at its portfolio companies, which are designed to accelerate performance by aligning each company’s “employee value proposition” with equity value creation strategies.
Future of Work Partners
FoW Partners is a private investment firm focused on the evolving landscape of work, specifically investing in middle market and growth equity opportunities within the “future of work” sector. The firm says it aims to build high-impact businesses by empowering forward-thinking teams and fostering long-term success through workforce innovation and technology. In collaboration with PwC, FoW Partners designed the Good Job Score, an assessment tool that links what workers care about—job quality—to what investors and corporate leaders value—business outcomes.
HCAP Partners
HCAP Partners describes itself as a firm that specializes in providing mezzanine debt and private equity for lower middle-market U.S. health care, software, services, and manufacturing companies that are underserved by mainstream institutions. Since 2008, HCAP has invested over $560 million in over 65 companies supporting over 13,000 workers during this period through active engagement and value creation partnership with the portfolio company teams. HCAP has a strong history as an impact fund, having been recognized by the Impact Assets 50 as one of the top 50 impact funds worldwide for eleven years in a row. HCAP was a founding member of the Global Impact Investing Network in 2012 and also a founding member of Impact Capital Managers in 2018. HCAP is one of the few private Impact funds with significant experience in making investments in growth stage, lower middle market companies, and with an explicit focus on creating quality jobs through its Gainful Jobs Approach. HCAP recognizes that too few workers are employed in jobs that provide the economic security and advancement opportunities they need to provide for themselves and their families. Through its Gainful Jobs Approach, the firm works to facilitate a positive impact on businesses, employees, and communities.
Jacmel Partners
Jacmel Partners describes itself as a minority-owned alternative investment firm focused on infrastructure and private equity. It was founded in 2015 and is based in New York City. The firm’s Office of Impact, developed in collaboration with CapEQ, provides a range of services designed to expand access to economic advancement opportunities among employees of its portfolio companies, including skill development programs, wealth-creation protocols, and expanded access to educational opportunities. After making any investment, Jacmel evaluates impact initiatives geared toward improving the well-being of each portfolio company or asset and its employees and their families and the people the company serves.
LLR Partners
LLR is a Philadelphia-based lower middle-market private equity firm that provides growth capital to technology, education, and health care companies. With an investment approach that prioritizes partnership, LLR collaborates with the management teams at its portfolio companies to help them achieve long-term value through initiatives focused on growth and strategic development.
Trident
Trident is a private equity firm that primarily invests in small and medium-size U.S. businesses. The firm takes a data-driven approach, using technology to identify and invest in companies with strong track records, particularly in the consumer, health care, and industrial sectors. Trident also embraces a “doing well while doing good” philosophy, focusing on positive community outcomes and improving access to opportunity among employees of its portfolio companies. In 2023, Trident launched the first cohort of its American Dreams Fellowship, which aims to widen the field of independent sponsors and operating partners who are members of populations that have been overlooked by the investment community.
Worker Solutions
Worker Solutions drives better results for portfolio companies by identifying challenges workers face, curating tailored solutions to solve them, and providing ongoing hands-on support. The platform was designed and launched by Lafayette Square, a private credit firm that provides capital to “growing middle-market companies in working class places.”
The talent management strategies being implemented at PE firms’ portfolio companies varies based on several factors. A firm’s investment theses, industry standards and benchmarks, and the physical location of the company may influence the specific practices or policies PE firms choose to pursue. Some firms assess companies’ existing practices, values, and job quality metrics during the sourcing and due diligence stages of the investment life cycle. Others—particularly firms with majority ownership of companies—may wait until after an acquisition is complete to conduct deeper analysis and make changes to C-suite leadership where needed to ensure that talent growth and development are embedded in the value creation strategy for the company. For the most part, the practices being implemented by the firms that participated in the Private Equity Job Quality Initiative fall into four strategic categories: total rewards, employee ownership, pathways to advancement, and worker voice.
Partnering with portfolio company leadership and brokering agreements with preferred providers to develop comprehensive compensation and benefits packages with an array of attractive offerings, including transparent and equitable pay models, health care coverage, flexible scheduling options and generous paid leave, retirement savings plans, and access to emergency funds. Three in 10 U.S employees report struggling financially. Focusing on total rewards can help address one dimension of work that contributes to a quality job – Financial Well Being. This dimension of job quality includes fair pay, stable employment, and benefits for workers.
Benefits to Workers:
Empowering employees to build personal wealth, take on shared accountability for company performance, and embrace ownership influence over company decision-making through the creation of employee stock ownership plans (ESOP) or other flexible stock option models.
Benefits to Workers:
Implementing low-to-no-cost skills training initiatives that support worker advancement and economic mobility within a company or across an industry. Job training and development are linked to higher satisfaction at work. Yet one in four employees report having no opportunities for promotion or advancement and only just over half of all U.S. employees have participated in on-the-job-training in the past 12 months.
Benefits to Workers:
Empowering workers to feel a greater sense of ownership and autonomy in the company’s operations and an increased sense of responsibility in their individual roles by creating supportive environments in which they feel safe voicing their concerns and opinions and by providing tools they can use to share ideas for improvement or help co-create solutions to complex workplace challenges. Worker agency and voice play a crucial role in shaping job quality. Large “voice gaps” – the difference between how much influence workers have and how much they expect to have – are linked to lower jobs satisfaction, higher burnout, and increased intention to leave the organization. Nearly half of employees say they lack the influence they should have about working conditions.
Benefits to Workers:
A key goal of the PE Job Quality Initiative was to better understand why measuring ROI of job-quality-related practices remains so difficult for PE firms. One factor is the wide variety of approaches and methods for defining metrics and gathering data across firms. Nearly all participating firms focus their investments exclusively on lower middle-market companies. Therefore, the findings below and in subsequent sections are assumed to be specific to the unique contexts and needs of small to midsize businesses.
Defining a Quality Job: The majority of PE firms that engaged in this effort have not adopted a formal definition or set of criteria for a quality job, and none currently have plans to do so. Some noted the importance of working collaboratively with their portfolio companies to envision desired goals and targets for improvements in job quality. However, several reported that they have explored models that identify the core characteristics of quality jobs—as JFF’s quality jobs initiative does—and have found that the definition varies based on factors such as the company’s location, the industry it’s in, and the nature of specific occupations.
Best Practice:
HCAP Partners identified specific elements of quality jobs and used those findings to develop a framework for collaborating with its portfolio companies to design and implement initiatives that create quality jobs. Known as the Gainful Jobs Approach, the framework serves as the basis for efforts to improve job quality across six key attributes: Broad-Based Participation, Opportunities for Advancement, Sustainable Livelihood, Belonging, Paid Time Off, and Wellness Initiatives. The specificity of the Gainful Jobs Approach makes it possible to pinpoint key people-focused metrics that enable HCAP and its portfolio companies to measure improvements and impact over time.
Approaches to Measuring Impact: More than half of all portfolio companies held by the participating PE firms are small-to-midsize businesses, which makes robust ROI measurement challenging. Smaller employers often lack the HR capacity, data infrastructure, and data expertise required to calculate the ROI of their job quality practices—a process that’s difficult to begin with because it requires controlling for many external variables that can affect perceptions of job quality. Determining causal relationships between changes in talent management practices and increases in value or profitability is a daunting task. Participating PE firms that are measuring and reporting the impact of people-focused initiatives are taking the following approaches:
Best Practice: Building Industry Partners has made it a priority across all of its holdings to work with small and midsize businesses to implement HR software, improve data hygiene, and invest in staff expertise to enable more consistent and comprehensive data collection and analysis. Key data is reviewed at people-focused management discussion and analysis meetings that include both portfolio company and PE firm leaders.
Best Practice: In the fall of 2024, Blackstone began piloting its new tool, the Impact Measurement Framework, which is designed to help Blackstone’s portfolio companies pick and set metrics that align to their unique talent management goals and performance targets. These metrics translate into tangible ROI data that Blackstone portfolio companies can use in their skills-first hiring approaches.
Metrics Being Measured: While the people-focused metrics that PE firms gather vary widely based on their specific investment theses and value creation strategies, all of the participating firms said they track the following data points, which serve as key indicators of job satisfaction, cost efficiency, and the overall health of companies:
Some firms are also collecting and analyzing qualitative metrics such as these, which they see as important drivers of employee satisfaction and retention:
Given the wide variety of approaches and perspectives represented in this initiative, our conversations revealed numerous beliefs, practices, and strategies that could help other PE firms implement targeted talent management practices to increase returns for investors. We broke the Keys to Success into two categories: Those that support efforts to increase buy-in and adoption and those that could help scale implementation and measure impact.
Prioritizing policies and practices designed to improve jobs generates firm-level buy-in and appeals to general partners and limited partners by directly connecting responsible talent practices to returns those investments generate.
Key messaging focused on promoting job quality practices should be tailored to the unique priorities of the various stakeholders engaged across the entire investment life cycle.
The full support of a company’s executive leadership team ensures that people-focused values will be prioritized alongside operational values as part of a company’s culture and foundational ways of working.
Using a standard but adaptable set of guideposts to drive efforts makes it easier for leaders of portfolio companies to co-create goals and approaches alongside private equity professionals.
When employees have opportunities to share feedback and suggest solutions to challenges, they can gain a stronger sense of ownership in the company’s success, and they may offer qualitative insights that put statistical data into a more human context.
All stakeholders should remain cognizant of the language they use and the opinions they convey when they talk about the need to improve job quality. They should choose their words carefully, so they don’t sound as though they’re blaming or casting judgment on others, which could make them appear elitist and sow division between PE firms, companies, and workers. Adopting and adapting language from a framework that is aligned to the organizations’ job quality initiative can contribute to a common understanding. The American Job Quality Study framework includes five dimensions of job quality with versatile language that can be used by most organization types.
Introducing the idea that job quality is key to value creation during the deal sourcing and due diligence stages of the investment life cycle helps establish priorities and expectations from the outset.
Tools such as HRBench staff analytics and engagement software or the UpMetrics impact measurement platform make it easier to collect, standardize, and analyze ROI indicators across multiple investments.
Best Practice: Future of Work Partners uses HRBench to administer its Good Jobs Score assessment tool, enabling a consistent and standardized delivery mechanism that streamlines data collection and analysis across a variety of investments.
While seeking opportunities for early wins to show that they’re committed to helping portfolio companies succeed, PE firms must tailor their approaches to each company’s unique circumstances, acknowledging that every organization faces its own industry-specific challenges and may have limited resources and expertise in areas such as IT and HR.
Best Practice: HCAP Partners works with portfolio companies to create a Gainful Jobs Approach Strategic Road Map as a condition of investment close. The roadmap includes annual job quality goals that guide job quality initiatives and is reflective of each individual portfolio company’s context and needs. The road map is a key engagement tool that HCAP reviews quarterly with company management and updates to reflect progress and company priorities.
It’s important for PE firms to use resources that support efficient and consistent implementation of practices across portfolio companies while also allowing them to adjust their approaches as needed.
Best Practice: Building Industry Partners sourced a common technology stack for its portfolio companies to use to help reduce software costs and ensure that key metrics were being defined and calculated consistently across all of its holdings.
Extending job quality priorities and initiatives to partners in a company’s supply chain magnifies impact and promotes broader regional economic development.
Workforce development organizations can be valuable partners who can inform and support implementation of job quality initiatives.
Across community of action conversations and the data deep-dive interviews, the factors described below were repeatedly identified as challenges or barriers firms encounter when seeking to measure the impacts of their investments in job quality practices:
Lack of sufficient HR expertise and resources makes it difficult for company leaders to implement policies and practices designed to improve job quality, share messaging about these policies and practices, or collect and analyze data illustrating the impact of job quality initiatives.
Job quality initiatives can take a significant amount of time to design and implement and years longer to generate returns, so private equity firms that sell portfolio companies within a short period of time after the initial investment have limited ability to demonstrate the financial impacts of those initiatives.
Small and midsize businesses generally don’t have the data frameworks or systems necessary to conclusively demonstrate that talent-focused value creation strategies achieve higher returns than cost-focused strategies.
PE firms may have limited ability to implement new policies or promote cultural changes at portfolio companies in which they have smaller investments.
Despite public perception that all PE firms have an abundance of resources, many smaller firms have limited capacity to invest in tools, technologies, and people to support these initiatives because, as lean operations, they must focus primarily on deal flow.
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Participants in our community of action and deep-dive discussions had several suggestions about how future efforts to spur conversations about job quality among PE firms should be structured and what their goals should be. Among other things, they offered ideas for encouraging deeper industry engagement in job quality initiatives and addressing key needs in order to broaden adoption of these practices among PE firms.
The deep-dive and community of action conversations revealed that, while many private investment firms are doing well financially while also taking steps to do right by the employees of their portfolio companies, their commitments to improving job quality are primarily driven by the personal values and philosophical beliefs of executives in their C-suites, not by conclusive evidence that job quality practices lead to better business outcomes. The leaders of PE firms have ingrained job quality priorities into their company cultures and into operating models designed to promote business growth through thriving workforces and encourage sustainability through responsible exit processes.
The firms featured here are powerful examples of the potential for PE to be a key driver of economic mobility while also achieving investor expectations for growth and valuation. However, there are still several key questions that must be addressed before private equity can scale practices that promote economic advancement for workers industrywide:
Future innovation and progress will require PE firms to make a deeper commitment to being rigorous, focused, and intentional in their efforts to not only implement impactful strategies but also measure their outcomes in ways that demonstrate the link between talent management practices and investment returns. Coordinating efforts alongside researchers, community partners, philanthropy, and business and industry advisors could provide the spark needed to ignite a broader movement that enables private equity to transform the lives of the millions of Americans facing challenges in their efforts to build wealth and get ahead in today’s economy.
Firms interested in continuing the work of advancing job quality across their portfolios, please contact CapEQ: info@capeqimpact.com
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