Private equity firms are positive for employee relations, a new study conducted by Centre for Management Buy-Out Reseach concluded.
The sector has been accused of asset stripping the firms they buy into, leaving employees on poorer job terms.
The European Private Equity and Capital Venture Association, known as EVCA, commissioned a study that found the sector had a positive effect on employee relations compared to before private equity involvement in a company.
Furthermore the study indicated that employee commitment best practices increased, with regular team briefings up by 19% of cases.
“While company managers, rather than private equity professionals, are normally responsible for operational decisions relating to employees, this study suggests that private equity investments can be a trigger for improvements in employee relations” said Javier Echarri, secretary general of EVCA.
“As we enter a downturn, the strengthened employee relations afforded by private equity ownership put those businesses in a stronger position to confront the difficult trading conditions across Europe,” said Echarri.
The study, undertaken by the Centre for Management Buy-Out Research based at Britain’s University of Nottingham, said the number of companies unionised after a buyout remained static at 71 percent. Real earnings of non-managerial staff rose in just over half of cases, with 47 percent seeing no change.
