Talent Shift: Culture, Leadership Style, and Flexibility Take Center Stage

May 14, 2025 – What’s the biggest shift you’ve seen in PE clients’ expectations when it comes to executive hiring over the past year?

Woodhead: The most significant shift in private equity clients’ expectations for executive hiring has been a pronounced movement back toward in-office presence requirements. Before COVID, about 80 percent of my searches required people to be in the office full-time. After the pandemic hit, everything went remote. But over the past year, there’s been this crawl back to expecting executives to be at least hybrid, with a much stronger emphasis on in-office leadership and culture building. This shift reflects a growing recognition that in-person leadership is critical for building and sustaining company culture. Many organizations have struggled with distributed executive teams. I don’t think culture is necessarily more important than before but distributed executive teams just haven’t cracked the nut on how to drive engagement and motivation in remote settings. The challenge is that while hiring managers are pushing for more in-office presence, strong candidates still have numerous opportunities where they can work entirely or mostly remotely, creating a disconnect between employer expectations and candidate preferences.

Sobhani: I’m seeing much more focus on how leaders lead and whether they’re good at building culture. Culture seems even more important now than it was several years ago. Another notable change stems from the slowdown in PE transactions and deal flow. With the decline in transactions and deal flow, hold times are extending. This means fewer strong candidates are available to explore opportunities. With extended hold times becoming more common, this has created a significant supply-demand imbalance: searches are being launched (often to replace underperforming incumbents mid-hold), but the strongest potential candidates remain unavailable because they’re seeing their current investments through to completion. This tight market for top talent is particularly pronounced for critical roles like CFOs, who are often the window
into an organization’s health for PE investors and frequently replaced upon acquisition. With fewer strong candidates available, we’re having to get more creative in our recruiting approaches, including considering promising ‘step-up’ candidates who haven’t previously held the exact role but show real potential and hunger to succeed.

How are you advising clients to evaluate leadership potential in candidates beyond the resume?

Woodhead: We advise private equity clients to look beyond the resume and focus on a candidate’s leadership potential with decision making as a primary lens. I’ve been coaching clients to really consider how a person’s decision-making style aligns with the company environment. It’s not just about finding a good executive generically—it’s about finding the right executive for this specific company and its objectives. This approach is supported by meaningful research. Kingsley Gate studies show that 73 percent of senior executives within PE/VC firms have either resigned (33 percent) or considered resigning (40 percent) from positions where they weren’t sufficiently empowered to make decisions. Understanding how candidates process information, solve problems, and handle ambiguity provides crucial insights into their potential effectiveness in specific company environments. You want to understand how a person makes decisions. Does the candidate require extensive information before making decisions? How comfortable are they with ambiguity? Do they thrive in hierarchical structures or flatter organizations? These factors determine not only cultural fit but how effective they’ll be in achieving objectives.

What about those taking on a role with a PE firm for the first time?

Woodhead: For step-up candidates—those taking on a role for the first time—thorough vetting through references and deep assessment of readiness becomes essential. While traditionally private equity has been risk-averse, the current talent market demands more openness to first-time executives. Instead of automatically going for the safer choice, I’ve been aggressively coaching clients to seriously consider number twos who are ready for that next step. The strongest candidates are often those hungry first-timers who have something to prove. They’re typically more likely to roll up their sleeves and work harder than established executives who’ve already had multiple exits, and they may be more amenable to relocation or hybrid arrangements since these opportunities are career-defining for them. References remain a crucial evaluation tool when properly leveraged. References are incredibly valuable if you know how to conduct them well. Third-party perspectives can validate the scope of a candidate’s role and provide unbiased assessment of their leadership abilities, since self-perception doesn’t always align with reality.

Sobhani: I tell my clients to get to know candidates as people. Spend time with them outside formal interviews—have lunch or coffee together. When you get that informal time, it makes a huge difference in seeing if they’ll gel with the team. This informal evaluation helps assess the interpersonal chemistry that’s vital when building a senior leadership team. By expanding evaluation to include decision-making approaches and leadership style, PE firms can make more successful executive placements even in a challenging talent market.

In today’s high-stakes deal environment, what’s one way search firms can create more value for their PE partners?

Woodhead: In today’s high-stakes private equity environment, executive search firms are uniquely positioned to create exceptional value beyond traditional recruiting services. Executive search firms have their finger on the pulse of what’s happening in the market more than most other service providers. This advantage stems from their continuous engagement with executives across industries, providing unparalleled access to ground-level intelligence about market conditions, company performance, and industry trends. PE-focused recruiters develop deeper market insights than almost any other professional service partner through extensive conversations with dozens of executives during each search process. This intelligence becomes increasingly valuable when search partners develop sector specializations, allowing them to provide nuanced perspectives that can validate or challenge assumptions about potential portfolio companies. We can provide insights that help inform investment decisions beyond just filling positions. When we truly understand a client’s investment thesis, we can offer market intelligence that influences diligence processes, valuation considerations, and post-acquisition strategies.

Sobhani: Search firms also add significant value through opportunistic talent connections. If we see strong executives leaving companies, even if we don’t have an active search, we’ll connect them with PE firms we work with. These introductions can lead to executives who might drive new deals or advise on potential platforms—creating value that transcends current assignments. The relationship management aspect cannot be overlooked. I meet with talent partners monthly just to discuss what we’re seeing in the market. By maintaining regular contact about market conditions and compensation trends, recruiters help PE firms anticipate talent issues before they become problems. The most successful PE-search firm relationships evolve beyond transactional search assignments into strategic partnerships. Search firms function as trusted advisors who understand not just how to fill open positions, but how executive talent drives value creation in the PE model.