This article was written for the August 2021 edition of  Real Deals, Private Equity Magazine.

Adam Carter, managing director at Carter Schwartz,  Rory Pope, partner at Apposite Capital, and Mark Seekings, chairman at Riverdale Healthcare, discuss the benefits of looking outside of the box when it comes to recruitment.

How would you describe the current recruitment landscape in the healthcare market?

Adam Carter: The market is very challenging across healthcare. There is a dearth of talent, due largely to the fact that the market’s pace of growth has outstripped the capability and skillset of many of those working in the sector. There is often a lack of external market reference points that can bring a fresh insight beyond what people already know. Naturally, this fuels the ongoing debate within the healthcare market about whether you should be recruiting for competence from any marketplace or following those within the healthcare niche.

Recruiters and clients often impose these ‘artificial borders’ or limitations where they won’t look externally outside of the sector. We’re the polar opposite, with a ‘whole market’ approach to sourcing talent. As a trusted advisor, my role is to challenge people’s perceptions and show them something slightly different. This is exactly what we achieved while working with Apposite and Riverdale during their recruitment of a CEO.

What was Riverdale hoping to achieve in working with Carter Schwartz? What did the recruitment process involve?

Rory Pope: Apposite started working with Riverdale in 2017, completing the initial investment in late 2018. The group’s story revolves around investing in high-quality dental groups that have the right geographical positioning and the right management team behind them. Having increased to almost 30 practices, Riverdale had a very ambitious growth plan and a very dynamic management team, so it was always our plan to start looking for a CEO in late 2019 to enable Mark to step back to non-executive chairman.

Covid-19 then hit and a lot of companies put a freeze on recruiting, but we decided to continue. We were lucky that Adam’s process was very slick and he’d already compiled a list of candidates before Christmas, which we were able to narrow down very quickly to five. The whole recruitment process was incredibly smooth. Adam immediately understood that we were looking for someone perhaps a little above and outside the norm with more than just healthcare experience.

Mark Seekings: We eventually hired our CEO, Emma Barnes, who came from a veterinary, dental and retail background. Emma’s experience in retail was a huge advantage because she understood that dentistry is more than just a healthcare service. This increasing consumerization in dentistry — seeing people as customers as well as patients — is part of this wider trend we’re seeing in the healthcare sector, so it was important that we found someone who understood that. Most importantly, she was the right fit culturally and, having worked for several private equity-backed companies before, she understood these market dynamics well.

Why is it important for PE firms and portfolio companies to challenge traditional recruitment processes?

Carter: It’s really about being courageous, recruiting to the core requirements of the role and bringing a varied and expansive shortlist. The benefit being that if you’ve got a much broader access point, you’re opening yourself up to an entire market and to all sectors. By definition, you have more people to choose from. If you take Emma, she’s a retailer by profession, but also has a little bit of dental experience and most importantly, buy-and-build experience, so she brings a very specific set of skills and knowledge to the role. That’s why this hiring like-for-like doesn’t always work, and that’s why you should break from traditional recruitment.

Seekings: Given the fact that I was recruiting someone to fill the role that I had been doing, it was really about finding someone with the right fit culturally. The fact that Emma had been in dentistry in the past was perfect because she had the same views as I did about how to run a dental practice. Emma had also worked in PE twice before and had overseen a very successful buy-and-build strategy in the veterinary sector— a very similar industry to dentistry. This knowledge was more important to me than anything else. Other candidates for the role had more CEO experience and some were experts in the field of dentistry, but Emma felt like the perfect cultural fit for Riverdale.

What are PE firms looking for in a recruiter? Has this changed over time?

Pope: When hiring for a PE-backed company, market intelligence is absolutely key. Adam is particularly strong here and often knows about potential deal opportunities before we do. He not only understood the role, but he understood the dynamics of us, the investor, and the business. You often see recruitment agents fail to understand how private equity works, which means you tend to get a more generic talent pool.

Carter: Recruitment used to just be about introducing people to companies, but it’s not anymore; it’s about knowledge and market intelligence, particularly in the investor space. Investors need up-to-date intel on what’s happening and unsurprisingly we’re often aware of deals long before PE firms. We’re constantly tracking the market and management teams so we know when teams might exit or perhaps seek assistance on new investment partners. Again this goes back to knowledge and an expectation of adding value beyond the mere placing of people. In my opinion, the days of the generalist recruiters are gone.