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Talent Trends in Private Equity: Acquisition, Retention & Building Culture in Today’s Market
In the current market, the labor dynamic is ever-changing, and organizations with the best talent strategies win. The Healthcare Technology team at Direct Recruiters, Inc. had the opportunity to interview several leaders within the Private Equity Healthcare investment space to discuss their perspectives. Industry leaders shared knowledge and helpful insight on acquisition, retention and building culture for today’s hiring landscape.
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DRI’s Healthcare Technology team recently had the opportunity to interview Virgil Bretz, CEO of MacroHealth. Offering helpful insight, Virgil shared thoughts on company culture, leadership, hiring, and the overall outlook of the healthcare IT landscape.
Founded in 2017, MacroHealth is on a mission to modernize healthcare, making purchasing and selling healthcare services simple and powerful for the healthcare finance professionals who are dedicated to guiding members and patients to the best care, at the best price, for the best outcomes. Through their innovative MacroHealth Intelligent ExchangeTM (MiX) platform, they enable health plans, self-insured employers, network organizations and providers to transparently collaborate on a single platform.
A first-of-its-kind SaaS platform, MiX leverages data science and industry standard interoperability to create an Intelligent Health Market™- a transparent digital healthcare ecosystem where all players able to easily leverage key data to make informed business decisions and collaborate with best-in-class partners, enabling them to win.
Virgil Bretz, CEO
MacroHealth
Talk about your company culture and what makes MacroHealth unique.
MacroHealth is a healthcare IT company creating an intelligent, SaaS solution to bring desperately needed optimization and connectivity in the U.S. healthcare industry. What’s unique about MacroHealth is that our team is located across the United States and Canada, and is a mash-up of people with deep healthcare and deep technology experience. We have had to work hard to bring all of these people together and align our mindsets to create one of our core values, which is “One Team:”
- We act as one team with our fellow MacroMates, customers and partners
- We value humility, low ego, and collaboration
- We are All for One, and One for All
We are proud that earlier this year, we were recognized as a 'Best Employer' for both the Province of BC, where most of our product engineering team resides, and nationally in Canada. MacroHealth tends to attract people for a couple of reasons: In MacroHealth’s stage of development, we are not an early start-up, as we have blue chip clients and GTM fit, but we are still in the start-up stage, and it is a very exciting time for our team. Professionals who don’t want to work in a huge company get the best of a start-up and a stable employer. In addition, MacroHealth attracts those who want to make a difference in healthcare. Our team’s work measurably improves healthcare access, reduces costs, and in the future will improve healthcare quality.
What are the main traits/experience you look for in leaders?
MacroHealth looks for people who can demonstrate the ability to be confident, strong-willed collaborators. These individuals have strong opinions but work well with a team for the benefit of the team first, always. In addition, we look for leaders with a track record of delivering on promises, with a sense of urgency. We have a term called ‘Macro Thinking,’ within our team which is keeping a growth mindset, and connecting the dots between their work, the work of our organization, working with our clients, and ultimately our responsibility to make healthcare better for everyone.
What is the biggest issue on your plate in regard to hiring?
Finding and earning great talent is a huge challenge! The broad acceptance of remote work has expanded the geographical market for where we can hire most of our roles. This increases the chances of fantastic two-way fits, where we can find the best possible person for MacroHealth while being the best possible job and team for our ideal candidates. On the other hand, with increased remote work, the team needs to work hard to understand who the new hire is, their style, and how effective they will be without working together in person. On another front, hiring was extremely competitive over the past two years, but this competitive pressure is easing slightly as we continue to hire while many organizations are holding or shrinking their teams.
What are the biggest trends you're seeing in healthcare technology?
Healthcare is driven by exploding costs, an aging population, incredible advances in medical science, and of course, a global pandemic. This is a time of incredible change in our industry. Focusing on healthcare information technology in particular, there are a few current trends to highlight.
- Consumer Experience: The recent announcement of Amazon buying One Medical is one more headline illustrating what most of us think: the healthcare consumer experience has a lot of room for improvement. Challenges to finding providers, scheduling, long wait times before, during, and after treatment, and unpredictable pricing are just some of the factors. It can often feel like consumers are working for the current healthcare system and not the other way around. Over the past year I have heard most of our clients and partners talking about IT solutions to improve customer experience and the member journey.
- Interoperability: Our industry still works on a pre-internet, pre-API, non-real time architecture. EDI and X.12 are decades old, and this is inhibiting real-time customer experiences. For example, imagine if you called an Uber, and its data updated once a day! That second-by-second, real-time experience would be impossible in most of the healthcare industry today, so a huge trend is transitioning to modern interoperability standards.
- Transparency: There is a bi-partisan, government-driven push to increase the transparency of contractual pricing between Payers and Providers. Consumers, but also even employers and other health plan sponsors, have far too little information about how much healthcare will cost before, during, or even shortly after a medical event.
Healthcare IT can make an incredible, positive difference on all of these issues.
What do you look for in a partnership with an executive search firm?
MacroHealth looks for an executive search firm to invest time to understand us and our team. We look for a high EQ on understanding cultural fit. In addition, our partners need to have a proven ability to find and earn trust with passive candidates, which is hard. We look for them to focus on timely delivery and completion.
Christian Kurth, Vice President
JMI Equity
Christian Kurth, Vice PresidentWhat are the main traits/experience you look for in leaders?
We look for leaders with a strong track record of success in their prior work experience. That is goal #1. An added benefit is if that individual has domain expertise – we love finding leaders that have grown up in an industry or have “lived experience” in a particular space or sector. This allows them to clearly articulate and anticipate the trends, dynamics, challenges, and opportunities of that particular industry better than we as outside investors could. Executives need to do many things, including setting strong goals and a vision for their company and effectively leading people, but to me, the most important trait is self-awareness. No one is a superstar in every aspect of their job – leaders that identify where they excel and where they need to lean on the strengths of their team are the most effective in my experience.
What is the biggest issue on your plate in regard to hiring?
Speed. We are coming out of the most competitive labor market in recent history (maybe ever) where demand for talent has outweighed supply and employee fluidity has been at an all-time high. It is increasingly difficult to, 1.) hire well, and 2.) do so quickly. We work with our portfolio companies on building efficient and repeatable recruiting and interviewing processes so they can extend offers to candidates swiftly and with conviction. This is a critical component of scaling growth stage companies, as organizations with best-in-class talent lifecycles outgrow their competition.
How are you helping employees avoid burnout?
Unfortunately, there is no silver bullet answer to this question. That said, I’ve been incredibly impressed with the creativity exhibited by our portfolio companies around this topic. Some unique ideas include, picking a day for no internal meetings (i.e., no Zoom meetings on Fridays) or shortening internal meetings all together (i.e., doing 45-minutes vs. an hour to give people time to recharge in between meetings). It’s also critically important to have a robust benefits program available to employees, including a defined employee mental health strategy and resources that are actively promoted and easily accessible. Finally, it’s essential that leaders, and especially front-line managers, exhibit empathy and ensure flexibility for their teams. The traditional 9 to 5 is becoming a somewhat antiquated practice, so exhibiting flexibility and empowering employees to take control of their daily work schedule can go a long way in reducing burnout.
What do you think is going to be the next big innovation in healthcare technology?
I’m not sure if this is as much an innovation vs. a trend, but I believe there will be a renewed focus on clinical efficacy and quality as the digital health market matures. The pandemic spurred a tidal wave of innovation as virtual-first care took off to meet the needs of patients and members who were isolated or unable to access traditional care modalities – mental / behavioral health being probably the best example. While the growth in virtual care has greatly expanded access to care, I believe the conversation will shift from focusing on access to focusing on clinical efficacy and outcomes. The digital health vendors that can consistently deliver superior care quality and outcomes will rise to the top and achieve lasting market leadership.
Gordon Crenshaw, Principal
Blue Heron Capital
What are the main traits/experience you look for in leaders?
As a baseline, we look for leaders with a track record of success in their prior work experience. A history of promotions and extended periods of time within the same organization are key. We orient ourselves to references more than anything, both from managers as well as the individuals that a leader managed. We like both top-down references as well as bottom-up references. Ultimately, we look for executives as leaders of people, so experience and track record of how a leader manages people and how he or she manages up is extremely important.
What are your onboarding best practices to ease the transition between companies?
We hope the new leaders of our companies get inundated with as much information as early and often as possible, participating in meetings on day 1 and integrating them into the workflow of a business. With that being said, we want that period of time to be reserved for listening and learning; a little bit of walk before you run. It is difficult not to fall into the trap with a new leader of sprinting towards some company objective or goal, but if you are hiring talented leaders, you want them to be able to weigh in on if we are even running in the right direction in the first place.
What do you think is the greatest cause for turnover?
We think the greatest causes of turnover, especially in new hires, are not some of the most obvious, like compensation or culture clashes. What we see as the greatest cause is not being crystal clear on expectations of the job requirement. It’s critical that the preparation for a new hire includes spending a significant amount of time on the job req, roles and responsibilities, as well as making sure the board and leadership team are rowing in the same direction in terms of what will be asked of a new leader or employee. We find that it is this misalignment of what a candidate believes the job is versus what it actually is that is the biggest cause of turnover.
What do you look for when partnering with an executive search firm?
The key word in the question is ‘partner.’ You have to take the viewpoint that your executive search firm is not just a service provider but someone that will work collaboratively with you to build the best organization possible from a talent perspective. At the stage we invest in (early stage, growth stage businesses), many of our leadership teams don’t have significant experience working with an executive search firm, so it is a learning process. We don’t just want our executive search firm to identify great candidates and get to an offer as quickly as possible. We want help with that initial leg work of designing and implementing an effective process. The key for us is a partnership mentality with a great executive search firm.
What is the biggest issue on your plate in regard to hiring?
Given the incredibly tight labor market we’ve been in for the past several years, access to great candidates has been a challenge, but it always will be. We live in a competitive world. For our early-stage businesses, speed is the most challenging aspect of the hiring process. Given the way we like our companies to hire, the importance of culture, the importance of clearly defining expectations of the job, and making sure we don’t miss on a new hire, it has been difficult to keep up with the pace with which people will meet a candidate and lob in an offer. Ultimately, we’re in the people business, and you win or lose based on talent. So, for us right now, speed is the most challenging aspect of the hiring market.
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