Beyond the C-Suite: How Smart PE Firms Build Championship Teams Through Mid-Level Talent Strategy

The Evolution of Talent Strategy in Private Equity

Traditional Focus on C-Suite Hiring

The private equity playbook has long centered on a simple premise: hire the right CEO and CFO, and everything else will fall into place. As Kevin Mitchell, founder of Redcloud Capital, explains, "Private equity tends to focus heavily on CEO and CFO hires... our mindset has always been if you can just improve a couple positions at the top that those are the levers that unlock everything" ^[1] .

This top-heavy approach made sense in an era when PE firms could rely on financial engineering and operational improvements at the executive level to drive returns. However, as the industry has matured and competition has intensified, this strategy is showing its limitations. The reality is that even the most talented C-suite executives need strong teams beneath them to execute their vision effectively.

"Every PE firm usually realizes they need to upgrade the CFO position. It's all these other positions that they generally won't even try and recruit for" ^[2]

The traditional mindset has created a significant blind spot in talent strategy. While PE firms have become sophisticated in their approach to executive search, they've largely ignored the critical layer of management that actually implements strategic initiatives and drives day-to-day operations.

The Hidden Value of Mid-Level Talent

The overlooked opportunity in private equity talent strategy lies in what industry professionals call the L2/L3 layer – the mid-level managers and directors who translate executive vision into operational reality. These positions, typically earning between $75,000 and $225,000 annually, represent the execution engine of any organization.

John Graham, co-founder and CRO of TriSearch, emphasizes this point with a sports analogy: "You can't just have the best coach and a star player like that's not going to win you the championship... you need everybody involved. You need the people that are going to grind. You need the people that are going to execute the coach's vision" ^[3] .

The data supports this perspective. When PE firms invest in upgrading mid-level talent across key functional areas – supply chain, IT, sales management, and operations – they often see immediate improvements in:

• Operational efficiency and process optimization
• Speed of strategic initiative implementation
• Quality of customer service and retention
• Overall organizational capacity for growth

Mitchell notes that this realization often comes too late: "I've been doing this for 25 years. I mean there's many many portfolio companies where we focused on what the CEO... or the founder wanted us to focus on when we could have been scrutinizing and upgrading some of the people that were running a division or running a location" ^[4] .

How Rapid Growth Reveals Talent Gaps

One of the most revealing aspects of talent gaps emerges during periods of rapid growth. Mitchell shares a crucial insight about how growth acts as a stress test for organizational talent: "When companies are growing really slowly people can hide out... In a high growth company you'll start to see people max out a lot faster" ^[5] .

This phenomenon, which Mitchell calls "revealing their ceiling," becomes particularly acute in portfolio companies experiencing 20-30% or higher annual growth rates. The symptoms are predictable:

• Processes that worked at smaller scale begin breaking down
• Customer complaints increase despite revenue growth
• Key initiatives stall due to execution bottlenecks
• Employee turnover rises as teams struggle to keep pace

The challenge is that by the time these issues become apparent, the company is already suffering from the talent gap. As Mitchell explains, "You can focus on strategy all you want but it always comes down to people. Anytime you're struggling with something... usually it is happening because there's some kind of a people issue there" ^[6] .

Case Study: Redcloud's Portfolio Transformation

The partnership between Redcloud Capital and TriSearch provides a compelling case study in the power of comprehensive mid-level talent transformation. The story begins with a portfolio company experiencing significant growth after bringing in a professional CEO.

Mitchell recounts the challenge: "The CEO confided with me he was struggling to fill some of these positions. And I was concerned because he wanted to fill like 13 positions in about 12 months" ^[7] . The traditional approach of engaging multiple single-search firms for each position was proving unwieldy and ineffective.

The solution came through a comprehensive partnership with TriSearch. Rather than treating each hire as an isolated transaction, they approached talent acquisition as a strategic initiative. The results were impressive:

• All 13 positions filled within 12 months
• Significant improvement in operational metrics
• Enhanced team cohesion through consistent hiring approach
• Reduced time-to-productivity for new hires

Graham adds context to the approach: "We actually invested the time to go out and meet the entire team out in Charleston... we took a trip when you were going as well but I think that somewhat speaks to our mentality... we're looking for this to be a recruitment partnership" ^[8] .

Building Championship Teams Beyond the C-Suite

The Sports Analogy: More Than Stars and Coaches

The championship team analogy resonates deeply in the private equity world, yet many firms still operate as if having a star player and great coach guarantees success. Graham, drawing from his team sports background, challenges this notion: "This isn't rocket science but it's you can't just have the best coach and a star player like that's not going to win you the championship" ^[9] .

Consider the parallels between successful sports franchises and high-performing portfolio companies. Championship teams are built on:

• Role players who execute specific functions flawlessly – Similar to heads of supply chain or IT who ensure operational excellence
• Depth across all positions – Having capable backup and succession planning at mid-levels
• Team chemistry and culture – Created through consistent hiring standards and shared values
• Continuous improvement mindset – Upgrading talent proactively rather than reactively

This approach requires a fundamental shift in how PE firms think about value creation. Instead of betting everything on a few key hires, successful firms are building comprehensive talent strategies that strengthen the entire organization.

Critical Mid-Level Roles That Drive Execution

Understanding which mid-level roles have the greatest impact on value creation is crucial for PE firms looking to optimize their talent investments. Based on TriSearch's experience across hundreds of portfolio companies, certain positions consistently emerge as critical leverage points.

Graham highlights the breadth of impactful roles: "We've got numerous tools... that allow us to go and hire a VP of supply chain and a head of IT and a head of sales or just sales managers or GMs across different locations" ^[10] .

Key positions that drive disproportionate value include:

• VP of Supply Chain – In manufacturing and distribution businesses, this role can unlock millions in cost savings and efficiency gains
• Head of IT/Technology – Critical for digital transformation and scaling technology infrastructure
• Regional Sales Managers – Essential for geographic expansion and market penetration
• General Managers for satellite locations – Key to successful multi-site operations
• Director of Customer Success – Vital for SaaS and service businesses focused on retention

Mitchell adds an important perspective on timing: "You don't want to wait two years to experience it. You want to get ahead of it" ^[11] . This proactive approach to mid-level talent acquisition can accelerate value creation timelines significantly.

The L2/L3 Layer's Impact on EBITDA

The financial impact of investing in mid-level talent often surprises PE professionals accustomed to focusing solely on C-suite compensation packages. When you examine the mathematics of L2/L3 investment versus potential EBITDA improvement, the ROI becomes compelling.

Graham breaks down the economics: "These mid-level roles that we're talking about are kind of that 75 to you know 200, 225 roughly... when you look at it at least just from a cost perspective there's definitely some value there" ^[12] .

Consider a typical scenario:

• Investment: 10 mid-level hires at average $150,000 salary = $1.5M annual payroll increase
• Recruiting costs at 20% of first-year compensation = $300,000 one-time investment
• Typical EBITDA impact: 2-3x payroll investment through improved operations
• Additional benefits: Reduced turnover, faster growth enablement, improved culture

Mitchell emphasizes the multiplier effect: "If you're paying whatever the cost is... and they're able to provide you know million dollars in return I mean it really is a no-brainer" ^[13] .

Breaking the Single-Search Mindset

Perhaps the biggest barrier to comprehensive mid-level talent strategy is the ingrained single-search mindset that dominates private equity thinking. Mitchell captures this challenge perfectly: "Part of why they don't do it is they haven't quite seen it happen in one of their companies although it's there... they're overwhelmed by the idea of hiring 10 different search firms" ^[14] .

The traditional approach creates multiple pain points:

• Coordination complexity – Managing relationships with multiple search firms
• Inconsistent messaging – Different recruiters telling different stories about the company
• Quality variation – Disparate standards and processes across firms
• Higher costs – Missing economies of scale in volume hiring

Graham explains how TriSearch addresses this challenge: "We're talking to thousands and thousands of people either through outreach and conversations and interviews... being able to get a correct message across is something that can drive some value" ^[15] .

The solution lies in treating talent acquisition as a strategic program rather than a series of isolated transactions. This shift in mindset opens the door to more efficient, effective, and economical hiring at scale.

The TriSearch Partnership Model

Moving Beyond Transactional Recruiting

The fundamental difference between traditional recruiting and the partnership model lies in the depth of engagement and commitment to outcomes. Mitchell draws a clear distinction: "There's a lot less I think investment in the relationship and the outcome basically" ^[16] when describing typical contingent recruitment approaches.

The partnership model transforms recruiting from a vendor relationship to a strategic alliance. Key differentiators include:

• Deep cultural understanding – Recruiters invest time to understand company values, not just job requirements
• Consistent candidate experience – Every candidate receives the same high-quality interaction
• Proactive talent mapping – Identifying future needs before they become urgent
• Integrated onboarding support – Ensuring successful transitions, not just placements

Graham emphasizes the commitment aspect: "We're committing to filling roles. That's a partnership when we're not going to stop until those roles are filled" ^[17] . This guarantee fundamentally changes the dynamic from hopeful effort to assured outcome.

Weekly Engagement and Radical Transparency

The cadence and quality of communication distinguishes true partnership from transactional recruiting. Mitchell describes the TriSearch approach: "It's very relationship driven and it's very engaged... it's a weekly commitment to regular conversations about everything going on" ^[18] .

This level of engagement delivers multiple benefits:

• Real-time strategy adjustments – Course corrections happen immediately, not after weeks of wrong-direction searching
• Stakeholder alignment – PE sponsors, CEOs, and hiring managers stay synchronized
• Market intelligence – Continuous feedback on talent availability and compensation trends
• Relationship building – Trust develops through consistent, transparent communication

Graham adds: "We do weekly update calls and really understanding the culture of what you guys are looking to do... being able to invest that time is just with this live example on the product design" ^[19] . This iterative approach allows for refinement of search parameters based on real candidate interactions.

Dedicated Teams vs. Solo Recruiters

The structural difference in how TriSearch approaches mid-level recruiting reflects a fundamental rethinking of the recruitment process. Rather than relying on individual recruiters juggling multiple searches, TriSearch employs specialized teams.

Graham details the team structure: "We break things out... we have account managers that really run the day-to-day... we have recruiters and senior recruiters. Their job is talking to the candidates on a daily basis... recruiting coordinators who handle all the administrative side... our sourcing team" ^[20] .

This division of labor creates significant advantages:

• Specialization efficiency – Each team member focuses on their core competency
• Scalability – Can handle multiple searches without quality degradation
• Consistent process – Standardized approaches ensure predictable outcomes
• Knowledge retention – Team structure preserves institutional knowledge about clients

The impact is measurable. Graham notes: "Even if we're working on a couple two three searches at a time... there's a team of at least three or four individuals that are working on this" ^[21] . This team approach enables handling of complex, multi-position engagements that would overwhelm traditional single-recruiter models.

Metrics-Driven Approach to Mid-Level Hiring

What sets modern recruitment partnerships apart is the emphasis on data and metrics throughout the hiring process. Graham explains: "We have top-notch metrics data reporting tools that help us go after those passive individuals" ^[22] .

The metrics-driven approach encompasses:

• Pipeline analytics – Tracking conversion rates at each stage of the recruitment funnel
• Time-to-fill metrics – Monitoring and optimizing search velocity
• Quality of hire indicators – Measuring retention and performance post-placement
• Market mapping data – Understanding talent density and compensation benchmarks by geography and function

This analytical approach brings private equity-style rigor to talent acquisition. Mitchell appreciates this alignment: "Those weekly meetings are critical. And Diego said to me time and time again our CEO that you guys truly took the time to understand not only our strategy and our culture" ^[23] .

The transparency extends to sharing these metrics with clients, creating a true partnership where both parties can identify bottlenecks and optimize the process continuously.

Economics and ROI of Mid-Level Investment

Cost Comparison: C-Suite vs. Mid-Level Searches

The economics of mid-level recruiting present a compelling case for PE firms accustomed to paying premium prices for executive search. Graham breaks down the stark contrast: "PE firms are used to $100,000 minimum fees... for a C-suite... TriSearch is typically at that kind of 20% of estimated first year's cash compensation for these mid-level hires" ^[24] .

Let's examine the mathematics:

• Traditional C-suite search: $350,000 salary at 33% fee = $115,500 minimum
• Mid-level search through TriSearch: $150,000 salary at 20% fee = $30,000
• Cost per hire reduction: 74% lower than traditional executive search
• Volume pricing benefits: Additional discounts for multiple positions

Mitchell puts this in perspective: "They're used to 350 $400,000 hires at 30%. And now you're looking at something a lot less against a smaller salary. It's a whole different mindset" ^[25] .

The value proposition becomes even more compelling when considering the collective impact of multiple mid-level hires versus a single executive placement.

The Add-Back Advantage for PE Firms

One of the most overlooked financial benefits of mid-level talent investment is the treatment of recruiting fees in exit valuations. Mitchell highlights this crucial point: "Sponsors need to remember that these are one-time investments... you get the opportunity that we all love as sponsors to get add-backs for these search expenses" ^[26] .

The add-back mechanism works as follows:

• Recruiting fees are treated as one-time, non-recurring expenses
• These costs are added back to EBITDA during exit valuation
• At typical 10-12x EBITDA multiples, every $100K in recruiting fees can add $1M+ to exit value
• The talent remains with the company, enhancing operational performance

Mitchell emphasizes the importance: "Yes it takes cash but it doesn't hurt your earnings. And that's an important thing for sponsors to remember. We all love our add-backs when we go to exit businesses" ^[27] .

This financial treatment essentially makes mid-level talent investment self-funding when considered across the investment horizon.

Economies of Scale in Volume Hiring

The traditional single-search model fails to capture the efficiencies available in comprehensive talent programs. Mitchell notes: "When you do these broader searches like TriSearch can do there's economies of scale... There's economies of scale we haven't talked about that" ^[28] .

These economies manifest in multiple ways:

• Shared sourcing efforts – Candidates identified for one role may fit another
• Streamlined processes – Single onboarding and communication framework
• Volume pricing – Reduced fees for multiple positions
• Learning curve benefits – Faster ramp-up for subsequent searches

Graham illustrates the efficiency: "We're able to partner with them and kind of go through them and then be dispersed across entire the entire portfolio just because we have the bandwidth... we're 65ish individuals" ^[29] .

For a typical PE firm with 10-20 portfolio companies, each needing 5-15 mid-level hires, the economies of scale can reduce total talent acquisition costs by 30-40% compared to traditional approaches.

Guarantee Structures and Risk Mitigation

The guarantee structure for mid-level placements provides another economic advantage often overlooked by PE firms. Graham details: "That comes with six months to one year guarantees. Sometimes we go up to two years depending on the role. And if anything happens to our candidate we're going to replace them for no additional cost" ^[30] .

This guarantee structure fundamentally changes the risk profile:

• Traditional contingent recruiting: 30-60 day guarantees, limited recourse
• TriSearch partnership model: 6-24 month guarantees, full replacement
• Risk transfer benefit: Recruiting partner bears the cost of mis-hires
• Quality incentive alignment: Long guarantees ensure focus on fit, not just fill

Graham emphasizes the confidence behind these guarantees: "We believe in our process. So if something unforeseen happens you know we're going to go ahead and replace that individual for no additional fee" ^[31] .

From an ROI perspective, these extended guarantees effectively reduce the total cost of talent acquisition by eliminating the hidden costs of turnover and replacement.

Future-Proofing Your Talent Strategy

PE Firms Adding Heads of Talent

The private equity industry's evolution toward professionalizing talent acquisition is evident in the emergence of dedicated talent roles within PE firms. Graham observes: "At the mid-market and up you're starting to see heads of talent acquisition or head of search or head of people that are across entire portfolio companies within PE companies" ^[32] .

This trend reflects several market realities:

• Scale requirements – Managing talent needs across 10-20 portfolio companies requires dedicated resources
• Competitive advantage – Firms with strong talent capabilities win deals and create more value
• Operational expertise – Talent leaders bring specialized knowledge to portfolio company challenges
• Network effects – Centralized talent functions can move key players between portfolio companies

However, even with internal talent leaders, the challenge remains substantial. Graham notes: "Within their 15 20 portfolio companies there's 2 three four five 10 mid-level hires at each company. And for one individual that's just you're not going to be able to recruit 100 people at a time" ^[33] .

Using Talent as a Competitive Differentiator

Forward-thinking PE firms are discovering that talent strategy can be a powerful differentiator in competitive deal processes. Mitchell shares a compelling example: "We've had two deals we've been pursuing recently... in our pitch materials... we've laid it out as something that we prioritize in helping to scale these businesses" ^[34] .

The differentiation strategy includes:

• Proactive talent assessment – Evaluating organizational capabilities during due diligence
• Value creation planning – Including specific talent initiatives in 100-day plans
• Seller reassurance – Demonstrating commitment to building, not just cutting
• Management alignment – Showing founders their teams will be strengthened, not replaced wholesale

Mitchell provides a specific example: "One of them happens to have multiple locations but one strong location and they're struggling to build out these satellite locations. So we highlighted in our pitch that we're going to help you build out the teams in those satellite locations" ^[35] .

This approach resonates particularly well with founder-owned businesses where loyalty to existing employees is high, but the need for professionalization is evident.

Advice for New Board Members and Operators

For operating partners and board members new to private equity-backed companies, Mitchell offers specific guidance based on a recent conversation with a friend joining his first PE board: "I recommended to him that he get very smart on talent acquisition and talent development and assessing like bring that to the table" ^[36] .

Key strategies for new board members include:

• Carve out talent as your domain – Become the board's go-to resource on people matters
• Push for comprehensive assessment – Advocate for looking beyond C-suite to L2/L3 layers
• Champion proactive upgrading – Don't wait for problems to manifest
• Connect talent to strategy – Link people investments to specific value creation initiatives

Mitchell emphasizes the passion factor: "It turned out he was already passionate about this because of... what their priorities were in his own business. But I recommended to him they really push this sponsor to take a closer look on those level two and level three employees" ^[37] .

This advice recognizes that many PE firms haven't fully embraced comprehensive talent strategy, creating an opportunity for board members to add unique value.

Making Talent Acquisition a Strategic Priority

The transformation of talent acquisition from administrative function to strategic priority requires both mindset shifts and practical changes. Mitchell captures the essential realization: "There's more value to be earned in these businesses by asking the question over and over again is this person the right person to help us double or triple the size of the business in every single position" ^[38] .

Converting this realization into action requires:

• Regular talent reviews – Quarterly assessments of organizational capability versus growth requirements
• Proactive succession planning – Identifying future gaps before they become critical
• Investment committee buy-in – Making talent a standard part of value creation discussions
• Portfolio-wide initiatives – Leveraging learnings and resources across companies

Graham emphasizes the importance of awareness: "It's almost just awareness right it's awareness for private equity firms around it's not daunting if you have the right partner. You can treat it as a single search because we're able to bring everything under one umbrella" ^[39] .

The firms that embrace this strategic view of talent are positioning themselves for superior returns in an increasingly competitive private equity landscape. As the industry continues to mature, the ability to build and scale high-performing teams at all levels will separate the top-quartile performers from the rest.