The Chief People Officer Is the New Value Architect in PE
In today’s private equity landscape, the Chief People Officer (CPO) is a powerful force in the boardroom. It is one of the most decisive value levers in the portfolio, with HR leadership proven to differentiate outcomes. The market reflects this: Talent Strategy Group reports that CPO turnover rose to 15% in 2024, a 36% year-over-year increase, while only 53% of new CPOs were promoted internally. As Shelton Guinn, Chief Administration and Human Resources Officer at Innova Solutions and Board Advisor to L.Maxwell Global, notes, much of this turnover isn’t about underperformance; it happens when the role is constrained to administration rather than empowered to create value.
A CPO’s impact compounds when the role is integrated into the same planning conversations as the CFO and CEO. The goal is not to mirror finance, but to make people strategy inseparable from investment and operating plans. For PE sponsors, choosing the right CPO can be the difference between scaling at speed and stalling at the starting line. As Guinn puts it, “The best companies make sure the CPO and CFO support one another and align their strategies to drive outcomes.”
Four capabilities define a boardroom-level CPO:
Architect of Change Readiness
CPOs must engineer change-ready organizations, ready to adapt as investment strategies evolve. Deloitte’s 2024 Global Human Capital Trends found that 72% of business leaders expect HR to orchestrate the broader work ecosystem, not just employment functions. This places direct accountability on the CPO to steward the enterprise and ensure readiness aligns with the value-creation plan. Sponsors should expect the CPO to surface risks early and align leadership.
Anticipator of Talent Gaps
Scaling stalls fastest where talent gaps go unnoticed. Nearly 70% of C-level executives report their organizations already operate with significant skills gaps, according to Springboard’s 2024 Workforce Skills Gap Trends Report. A high-impact CPO identifies critical roles early, stages succession, and aligns recruiting capacity to the growth plan. Sponsors & boards should see regular reporting on time-to-fill for revenue-critical roles and succession coverage for top performers. Talent gaps compound faster than capital gaps.
Translator of Strategy into Capability
The modern CPO connects human capital to enterprise outcomes. In PE-backed environments, this means ensuring investment and operating plans translate into organizational capacity. Yet only 44% of organizations believe their talent strategies align with overall business goals. A high-impact CPO converts board mandates into workforce action and tracks KPIs. Firms should set a review cadence in partnership with finance, ensuring talent decisions stay tied to investment goals.
Builder of Cultural Alpha
Culture isn’t just an add-on, it’s the operating system for execution. A 2024 Gallup poll reported that global employee engagement dropped to just 21%, costing the economy an estimated $438 billion in lost productivity. The CPO must serve as the spearpoint of cultural enforcement, driving a unified mindset and turning leaders into exemplars of the company’s ideals. Culture cannot be assumed, it must be designed and embodied by the organization. Guinn observes that “culture without accountability is often just branding.”
How Sponsors Turn the CPO into a Value Lever
For PE firms looking to differentiate themselves, the CPO must be a board-level operator and the enterprise risk manager of human capital. In hold periods defined by performance and value creation, their impact shows up directly in valuation. The CPO should have a place at the table to drive people strategy alongside investment strategy in major decisions.
For investors, the math is simple: undervalue the CPO, and you are not mismanaging HR. You are mispricing your investment.