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Occupational psychologists in private equity

Role call: occupational psychologist

by Krystal Scanlon18 July 2022

Private equity has always been a people business. However, attention is increasingly turning to the minds behind the investment returns. If those individuals can consistently perform at the top of their game, it will equate to better deals and stronger business performance overall.

Against this emerging backdrop, some GPs have hired an occupational psychologist to understand the minds of PE practitioners and what makes them tick. But what is an occupational psychologist and where should it sit within the firm? What does a typical occupational psychologist role actually entail, and more importantly, where can you find one?

According to the British Psychological Society (BPS), an occupational psychologist helps organisations to “get the best from their workforce and improve employee job satisfaction”. This includes learning how to better motivate staff, improve recruitment practices, upskill current employees and help them to cope with stress. They might also use psychometric tests to measure candidates’ suitability for roles, such as Hogan assessments.

With the increased importance of inclusion and diversity, which supports the ability to retain employees, Nikita Mikhailov, a psychometrician
who is launching an occupational psychology talent recruitment agency, believes the role shouldn’t be an afterthought for GPs. After all, a firm’s biggest asset is its people. “An occupational psychologist has an in-depth understanding, based on scientific rigour, of how people function in an occupational setting.”

While the role focuses on people, Mikhailov believes it should remain separate from HR. “This could provide them with more scope to add value across different divisions, such as learning & development, diversity & inclusion, HR and so on.”

Role model

One example is Rachel Frost, who joined C5 Capital as an operating partner in 2019. She’s the firm’s first BPS and health and care professions
council (HCPC)-accredited occupational psychologist and executive coach. As an integral part of the team, she works with C5 on leader and staff selection and development. Additionally, Frost helps C5 assess leadership potential of the founders and their team within portfolio companies, as part of due diligence.

The role came about following a discussion with C5’s founder and CEO André Pienaar, who’d been inspired by the American television show Billions. “André was attracted by the role of the in-house psychologist as an integral part of an investment firm and he wanted me to do that role for C5,” she explains.

Mind map

Everything Frost does starts with building profiles of individuals to gauge who they are, character traits and personality fit for the business. This is determined through three sections: interpersonalintellectual and personal qualities.

Interpersonal details the communication between the individual and colleagues across all levels. “I decipher what they’re like networking and influencing others, what they’re like as a colleague and manager as well as how they like to be managed.”

Intellectual highlights the individual’s decision-making style, which is backed up by further ability tests. “I want to understand whether they think big or small picture, if they’re detailed, how intuitive they are, their risk appetite and whether they get distracted easily or they’re likely to see a task through to the end.”

Personal qualities is the final piece to the profile puzzle, which identifies the individual’s key drivers, values and motivators. For example,
for potential job candidates at C5 or a portfolio business, Frost identifies what appeals to them about the job and their reservations. “I then
consider how they handle pressure, what causes them to feel stressed, anxious, bored and angry, as well as how people around them would identify those issues,” she adds.

Diving deeper, Frost considers the individual’s wellbeing and what support they have in place. “I want to understand how self aware they are and what coping mechanisms stop them from switching into “fight or flight” mode, if they’re under immense pressure.”

Confidential support

As a chartered coaching psychologist, Frost also provides one-on-one coaching sessions for C5. The aim is to maximise individuals’ strengths, while addressing development areas that might hinder progress. “We look at what currently is and isn’t working for the individual, what strengths they can play to and equally what personality characteristics they might want to adapt,” she says. “For example, an introvert who needs to give a presentation will need to learn how to appear as an extrovert in front of an audience.”

Coaching has been especially welcomed in recent months in a bid to support C5 and its portfolio through post-covid transitions. “It started with wellbeing support during the pandemic where we conducted resilience check-ins for individuals and groups. Now the focus is on those same individuals adapting to the new hybrid models.”

Ultimately everything Frost does with C5’s team and its portfolio is built on trust. “It took a long time to build that rapport with the teams, but everything we discuss is confidential,” she says. “People will always be hesitant to start with, but that’s not just in PE. That’s any company which uses an occupational psychologist or coach of sorts.”

Search mission

Currently, it’s rare for private equity firms to hire an occupational psychologist in-house. Gail McManus, founder and managing director of PER believes the role is usually sought as and when a firm needs one.

YSC Consulting, for example, has specific PE services which provide clients with data-driven insights to make better talent decisions. The firm has been used by the likes of 3i, Actis, Apax Partners and Bain Capital. A similar business, OE Cam, has been used by Coller Capital to maximise both individual and team effectiveness by geography and function.

Alternatively, GPs can hire an individual consultant. In these cases, Mikhailov advises firms to check they have sufficient psychology-related
qualifications, their chartership and registration status with local professional governing bodies. BPS-accreditation, for example, is legally
recognised and reflects the highest standard of psychological knowledge and expertise.

Frost is one example of an occupational psychologist whose role straddles across enhancing teams as well as individual coaching. But not every occupational psychologist will be BPS-accredited or a chartered coach, and not every GP will need both skills at the same time. Before considering hiring this role, GPs must have a solid understanding of what they need and how long for. “It’s important GPs have a clear understanding of what they want to address and achieve,” says Mikkailov. “That will influence what qualifications, experience and competencies they search for.

“Occupational psychology is just one branch of psychology,” he adds. “If they decide they need someone to primarily enhance and support the mental health of them and their staff, for example, a chartered clinical psychologist and / or qualified therapist might be better suited.”

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Psychologist currently working in PE

Name: Rachel Frost
Firm: C5 Capital and its portfolio companies
In-house or consultant: Operating partner / long-term retainer contract.
Qualifications / accreditations: BA in psychology, MSc in occupational psychology, BPS-accredited occupational psychologist, chartered coaching
Focuses: Individuals and executive teams across C5 and its portfolio businesses.



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