When private equity invests in businesses, their workers benefit – seeing robust wages and opportunities for long-term career growth

• Private equity’s support for workers is undeniable, providing strong wages, professional development opportunities, and safer workplaces – all while investing in underrepresented talent.

• Employee wealth-building initiatives like Ownership Works encourage private equity firms to give portfolio company employees a direct stake in their employer’s success – impacting nearly 112,000 employees and generating over $130 million in payouts to low- and moderate-income workers since 2021.

• Despite what critics may claim, the truth is clear: American businesses, their workers, and the economy as a whole benefit from private equity’s strategic investments of capital and expertise.

Generating job opportunities, encouraging career growth, and supporting better wages are just a few ways that private equity supports American workers’ livelihoods. Get the facts on these valuable contributions and learn how private equity is empowering hardworking individuals across the economy:

1. Private equity-backed businesses provide robust wages that benefit millions of American workers and bolster the economy.

 Across the country, private equity enables healthy wages for the 12 million workers directly employed by the industry. In fact, in 2022 the average U.S. private equity sector worker, both full- and part-time, earned around $80,000 in wages and benefits – the equivalent of about $41 per hour for a full-time worker. Generating over $1 trillion of U.S. GDP in 2022, the private equity sector not only directly supports the livelihoods of American workers but also contributes to a strong U.S. economy.

 What’s more, these investments are particularly impactful for the small businesses that make up the overwhelming majority of private equity-backed companies – ensuring that American entrepreneurs are able to hire and maintain an employee base. According to a recent report from Ernst & Young LLP (EY) and the American Investment Council (AIC), private equity-backed small businesses, their suppliers, and related consumer spending supported 4.4 million workers earning $360 billion of wages and benefits and $615 billion of GDP in 2022 – driving economic growth and fostering entrepreneurship.

Read more: Private Equity Investment: Helping America’s Small Businesses Weather Any Storm

 2. Private equity investments open career growth opportunities for portfolio company employees.

 Beyond providing strong wages and benefits, private equity investments also help strengthen skills development and overall career outlook for portfolio company employees.

As industries increasingly face workforce skill obsolescence as technologies advance, private equity’s operational improvements help create professional development opportunities for workers that advance skills and enhance future job prospects. As a study from The Review of Financial Studies found:

“[M]any employees of companies acquired by PE investors gain transferable, IT-complementary human capital. Our estimates indicate that these workers experience increases in both long-run employability and wages relative to what they would have realized in the absence of PE investment.”

Other private equity players are working to address opportunity gaps head-on. For example, Blackstone’s Career Pathways program is devoted to working with portfolio companies to “increase access” and “enable advancement” for diverse and historically underrepresented potential hires – leading to 6,000 hires across 50 of its portfolio companies who would’ve been untapped talent without the program. From building talent pipelines with non-profit organizations focused on historically Black colleges and universities (HBCUs) to investing in mentorship and sponsorship programs, Career Pathways prioritizes elevating underutilized talent with a commitment to longer-term professional growth.

 3. Through shared ownership models, private equity-backed companies are able to invest and empower their workers.

For other private equity firms, encouraging employee engagement and buy-in at portfolio companies has been key to driving success.

Through shared ownership models deployed as part of Ownership Works – a nonprofit initiative, of which Kohlberg Kravis Roberts & Co.’s (KKR) was a founding partner, focused on building employee wealth through value sharing – private equity firms equip employees in industries across the economy to advocate for necessary business and workplace improvements and directly benefit from the company’s success. Since its founding in 2021, Ownership Works has impacted nearly 112,000 employees across the country, generating over $130 million in payouts to low- and moderate-income workers.

Take KKR’s investment in Michigan-based garage door manufacturer C.H.I. Overhead Doors (C.H.I.) as an example. With a focus on employee engagement, KKR enacted an ownership program that made all 800 of C.H.I.’s employees partial owners of the company. By creating a “culture of ownership,” C.H.I.’s workforce was empowered to not only voice their ideas for improving operations but feel that they too have a stake in the business’ commercial success. As a result, the company’s employees saw both the organizational culture benefits of this change but also the financial benefits – receiving a payout on equity that averaged $175,000 on top of their regular salary, as well as approximately $9,000 in dividends since 2015.

4. Private equity investments help improve workplace safety – reducing risk and creating a more secure work environment.

 On top of improvements to company culture and employee compensation, private equity investments help facilitate safer workplaces for employees, which help protect workers and improve operational efficiency across portfolio companies.

Researchers from the Bureau of Labor Statistics, University of Georgia, and University of Texas at Austin found that public companies bought by private equity experienced “a large, sustained decline” in workplace injury rates – indicating that private equity helps “improve workplace safety.” In fact, researchers found that annual injuries per employee fall by an average of 0.74 to 1.00 percentage points from the 4 years before to 4 years after a company is bought by private equity – amounting to about 650,000 to 880,000 fewer workplace injuries per year.

The bottom line

While critics may seek to claim private equity ownership doesn’t pay off for workers, the reality is indisputable: private equity’s investments support safe, sustainable, long-term career growth for American workers – all while advancing U.S. economic vitality.