Wall Street’s Gilded Maternity Perk: Nannies Fly Free
KKR & Co., one of the oldest private equity firms, is rolling out a new perk in the struggle to hire and retain talent: flying nannies.
Billionaire co-founders Henry Kravis and George Roberts in May extended the company’s leave time for new parents and added a benefit allowing them to bring a new child and caregiver on business trips, paid for by KKR. It’s the only major private equity firm, and one of the few U.S. companies, to offer the travel policy, according to the Families and Work Institute.
Big private equity firms are vying to add women and minorities to their male-dominated workplaces as they expand beyond buyouts into larger, multifaceted money managers. While diversity has long been considered a corporate asset, the industry has made little progress in placing women in high-level posts, lagging behind other financial companies.
“Too many same people means too much same thinking,” Roberts, 71, said in an interview. “We found that people were hiring people like themselves. If you want to stifle innovation, if you want to stifle diverse thinking, if you want to stifle creativity, then just keep hiring people like yourself.”
Across the 10 biggest buyout shops, 9 out of 10 senior managers are men, according to data Bloomberg compiled in April. Twelve of KKR’s 93 senior professionals are women, the data showed, compared with 4 out of 71 three years ago.
In investment banking, women hold about 16 percent of senior positions, according to the nonprofit group Catalyst. In venture capital, the number is about 15 percent, according to research firm Preqin.
KKR, founded in 1976, started an inclusion and diversity council this year to explore policy changes that would boost the firm’s appeal to women, minorities, gays and lesbians, who traditionally haven’t entered asset management in large numbers. The firm has about 1,200 employees.
Led by KKR partner Michael Michelson, the committee meets every other week and includes senior executives such as Suzanne Donohoe, Scott Nuttall, Joseph Bae and Johannes Huth.
“The best and the brightest of the future don’t look like the best and the brightest of the past,” said Ken Mehlman, a KKR partner and former chairman of the Republican National Committee. “This is a necessary first step. I hope the whole industry improves and we all learn together.”
Brittany Bagley, a member of KKR’s technology deals team in Menlo Park, California, was one of the first to take advantage of the firm’s new travel benefit. Many parents face a “moment of guilt” when they prepare to go back to work after having a child, said Bagley. So when the 32-year-old returned from maternity leave last week and immediately needed to travel, Bagley was relieved to bring her 4-month-old son and a caretaker with her across the country.
“Do I do a good job at work, or do I spend time with my child? One of those questions is now off the table,” said Bagley, who traveled to New York for two portfolio company board meetings.
KKR will fly a child and caretaker, provide a hotel room and pay for meals on business trips until the baby’s first birthday, Kravis and Roberts wrote to employees. The firm also increased paid leave for primary caregivers -- including employees who adopt or use a surrogate -- to 16 weeks from 12 weeks, extended paid leave for non-primary caregivers to 10 days from five, and started a “transition support” program to reintegrate new parents returning from leave.
“It’s a very unique policy,” Ellen Galinsky, president of the Families and Work Institute, a New York-based nonprofit, said about KKR’s child-care travel offering. “I hope that other companies follow suit. To see the light, you have to feel the heat.”
Firms have to be careful to present such a benefit as an option that doesn’t make employees feel they are required to travel immediately after having children, said Galinsky. Companies should also make resources available for parents to learn which countries aren’t safe for travel with young children, she said.
Other private equity firms are also taking steps to boost their appeal to young women and mothers. Blackstone Group LP, where women fill 16 percent of senior roles, in April extended its maternity leave to 16 weeks from 12 weeks. Carlyle Group LP, where women comprise 14 percent of senior managers, has increased efforts to recruit young women, who will represent 40 percent of its analyst class that starts next year.
The U.S. is the only developed nation that doesn’t mandate maternity leave with pay. Only 12 percent of U.S. private-sector employees have access to any paid family leave through their jobs, according to the U.S. Department of Labor.
U.S. technology companies -- with which private equity firms increasingly compete for young talent -- have made larger strides. Netflix Inc. last week said new parents can take as much as a year of paid time off, after which Microsoft Corp. and Adobe Systems Inc. extended their parental leave policies.
Facebook Inc. allows new parents four months of paid leave, plus $4,000 in “baby cash,” and Google Inc. provides as much as 18 weeks of paid leave.
“We don’t make anything -- it all comes from the work that our people do,” said Roberts, whose KKR manages $102 billion in private equity, credit, energy assets, real estate and hedge funds. “To be able to attract and keep the highest performers that we can find is what’s going to give us a competitive advantage.”