Katrina Stewart, Eton Bridge Partners on why private equity firms are now championing Chief People Officers.

The landscape for investment has changed considerably in the past few years. With challenging market conditions, increased costs, consolidation, acquisition, the pace of exit has decreased. This has understandably changed the focus for private equity (PE) firms.

Whilst the role of Chief People Officer (CPO) was always seen as valuable, it was not viewed through the same strategic lens that it now is, and private equity certainly didn’t have it at the top of their list when looking at C-suite appointments to prioritise and interrogate.

At Eton Bridge, we are seeing increasingly that private equity is looking for people leaders that will contribute to building value and revenue and seeing this role as a pivotal value creator that sits alongside the CFO and CTO in the hierarchy. This has inevitably changed the profile of appointees and made for some interesting new trends in CPO hiring within PE-backed businesses.

Our recent CPO Pathways report shows a role that is gaining strategic importance and as a result, the profile and experience of the people being appointed is also changing.

Private Equity CPO Appointments Up

Perhaps the most interesting trend uncovered by our report looking into nearly 15,000 global CPO appointments between 2023 and 2025, was that 40% of all CPO appointments happened in PE backed businesses – up from a third two years ago. The highest proportion of PE hires were found in the UK, US, France and Germany, where PE-backed organisations are driving strong demand for senior people leaders.

At Eton Bridge, we’re seeing this shift first-hand, as we’re increasingly working in partnership with both the fund and its portfolio companies to identify the right people capability for the business. PE firms are seeing the role as a key strategic driver for their portfolio businesses and a commercial lever it is essential to have in place.

Shifting Expectations

As a result of a more tumultuous and lengthy investment process, focus from PE firms has shifted from quick growth to building a business that can deliver growth but also has the resilience to respond to market changes, including the ability to adapt dynamically, or change direction when required. It’s this change in focus where the CPO role comes into its own: it’s no longer merely a culture builder but a commercial lever and vital tool for equipping workforces in an ever changing landscape.

Once viewed primarily as the executive responsible for supporting recruitment and culture during periods of expansion, today’s CPO is expected to help reshape organisations for greater productivity, lead workforce transformation, build leadership capability and ensure businesses have the talent needed to deliver their investment roadmap.

Transformation, productivity, execution and resilience are increasingly CPO remit

PE firms are increasingly feeling they need someone who knows what the end of the roadmap looks like – who has been in a business which has undergone lots of M&A, integrated AI and navigated change. They’re looking for broader perspectives and someone who has experienced the pain points this comes with, understands the size the business needs to reach and ultimately can prepare them for exit. For many businesses and their PE funders this means looking outside the organisation.

Our report reflects this shift, and shows that well over two-thirds of (71%) of hires between 2023 – 2025 were appointed from outside the business, rather than as a result of internal promotion.

Same Sector Experience

Though these new CPOs might not be from within the same organisation, they do tend to have directly transferable background, with more than four in five (82%) of appointments now coming from the same sector – suggesting organisations are prioritising highly specific experience.

The CPOs who are most valuable are able to drive value creation not just support team growth.”

Many modern day PE valuation creation plans are now looking for growth through acquisition. Integrating 450 new team members is a very different proposition to recruiting them and that sort of scaling up requires a different skillset to HRs who have been focused on recruitment and payroll.

Bringing teams together, often across continents and making a cohesive business requires a CPO with experience in bigger businesses, and ideally exposure to acquisitions and mergers – hence why external hires are proving so popular.

How AI is changing the skills PE firms expect from people leaders

As with most roles, AI has also had an impact on the CPO role. Not only do CPOs need to be involved with reshaping workforces according to changed capacity and demand, they also need to redesign jobs, manage change and ensure organisations are adopting AI effectively.

Where organisations are trying to navigate how AI and people compliment each other and often looking at removing certain roles and replacing them with AI, CPOs will need to begin considering who the business’s future leaders are and how best to create an effective talent pipeline.

This is where external experience can prove beneficial. Leaders who have worked in large organisations with substantial AI investment can bring valuable experience and new approaches to HR into smaller, PE-backed businesses. They are often better equipped to navigate the workforce implications of AI, understanding which roles may be replaced or enhanced by technology, how people can be reskilled or redeployed, and where AI could fundamentally reshape parts of a business.

From HR leader to value creation partner

The changing role of the CPO reflects a wider change in what PE firms need from the leadership teams in the businesses in their portfolio. People strategy can no longer sit separately from the commercial strategy of the business. Decisions around organisational structure, leadership, talent and workforce costs can have a direct impact on growth, profitability and ultimately exit value.

For PE firms, this means the strongest CPOs are increasingly those who can demonstrate how their work is contributing to the wider business. That could mean restructuring an organisation following an acquisition, improving productivity, removing unnecessary layers, building a stronger leadership team or making sure the business has the right skills to deliver its growth plans.

The result is a CPO who looks increasingly different from the traditional HR leader.”

There is also a different pace to working in a PE-backed business. CPOs are often working against a defined growth plan and a clear investment timeline, which means there is less time to spend on long-term HR programmes that don’t have a clear business outcome. They need to be comfortable making decisions quickly, managing change and working with the CEO and CFO to deliver against the wider plan – which means working to instate KPIs, and focusing on data driven metrics and margins.

The result is a CPO who looks increasingly different from the traditional HR leader. They are expected to understand the numbers, challenge the CEO, influence the board and work alongside the wider leadership team to deliver the investment case.

Essentially, today’s CPO is expected to speak the language of investors and CFOs. Success in this role is now often measured through productivity, operational performance and readiness for exit – not just engagement scores or culture metrics.

AI, tough market conditions and an ever changing workforce requirement mean the CPOs who are most valuable are able to drive value creation not just support team growth.

Amidst the challenges of rapid change, there is opportunity for firms and their potential CPOs. Those prioritising sector knowledge, commercial acumen and the ability to deliver effective change against this tumultuous backdrop are most likely to succeed.