When launching a new fund, you’ll face a series of people-related decisions, including which roles to keep in-house vs. outsource, how to structure competitive compensation and benefits, and how to stay compliant with labor laws. These choices, both tactical and strategic, form the foundation of a strong HR action plan.
As outlined in our HR Toolkit for Emerging Fund Managers, the right HR strategies can help you attract top talent and scale your fund efficiently and profitably. Here are five HR strategies you should prioritize to build a high-performing fund and workforce:
1. Build Tactical HR Infrastructure Early
For emerging fund managers, one of the most critical early steps is establishing the infrastructure to manage day-to-day HR operations, including payroll, benefits, compliance, and overall HR management.
But it’s not just about choosing any HR service provider. You’ll need a partner who understands the unique HR needs of emerging fund managers and can offer:
- PE/VC expertise, including by fund size
- Access to Fortune 500-level benefits
- Experience operating across multiple states
- Direct access to knowledgeable HR professionals
- A scalable HR tech stack that grows with your fund
As LP expectations around compliance continue to grow, outsourcing HR operations to a PEO like Aspen HR can help ensure your fund has the right HR policies, training, and infrastructure in place. In addition to our experience working with fund managers, we’re also the only PEO with an in-house employment attorney available to provide expert guidance on employment law compliance and due diligence.
2. Plan HR Expenses Strategically
While talent management is one of the largest fixed costs for any organization, it also offers some of the highest potential returns. According to McKinsey, companies that strategically invest in talent consistently outperform their peers, achieving higher long-term profitability and a stronger competitive edge. For emerging fund managers, achieving these results begins with careful budgeting and planning.
To start, forecast HR-related expenses across the life of the fund, including base salaries, bonuses, carried interest, benefits, and outsourced HR support. Then, model those expenses against your management fee and expense ratio. Your PEO can help you establish a solid plan for people investments, so you can avoid overextending your fund’s resources or underinvesting in the talent needed to execute your strategy.
3. Practice Smart Compensation and Benefits Benchmarking
Given the complexity and competitiveness of total compensation offers, thorough benchmarking is essential to attracting and retaining top talent. Since you’re unlikely to start out with an internal team of compensation analysts, you can gain access to rich market data and insights by partnering with an experienced outsourced HR provider. Outsourced PEO services can help you structure competitive offers that align with industry standards without overpaying or misaligning incentives.
One study found that companies using compensation benchmarking tools were twice as likely to offer candidates the “right” salary—one that was neither too high to be wasteful nor too low to risk losing top talent.
Similarly, it’s critical to benchmark benefits offerings, including health plans, 401k plans, and voluntary benefits. Not only will it help you compete more effectively with institutional firms, but it can also support your ability to maintain cost control amid ever-rising benefits costs.
4. Align Hiring with Growth
Hiring the right mix of employees and outsourced partners is a strategic decision that will shape your fund’s budget, operational efficiency, and ability to scale. In fact, each hiring decision carries multiple considerations, including:
- Which functions to outsource based on your fund’s size and cost structure
- Which roles to prioritize now vs. which can be phased in as the fund grows
- How you’ll source talent, manage headhunters, and keep track of candidates
- How you’ll onboard and train new hires
A PEO like Aspen HR can streamline the entire talent management process by helping you define hiring priorities, manage recruiting workflows, and give each new hire an impactful onboarding experience.
5. Strengthen Culture as You Scale
As your fund grows, your people strategy should evolve to support and sustain a strong culture. That evolution includes clearly defining your mission, vision, and values, and making sure they’re reflected in how you lead, communicate, and develop your team.
A Gallup survey found that only 27% of employees strongly believe in their company’s values, and less than half understand what their organization stands for. A PEO partner can help embed your values into your culture so your team stays aligned and engaged while you focus on scaling the fund.
Turn HR into a Growth Advantage
Getting HR right will unlock the full potential of your emerging fund. It positions you to hire and attract the best talent, manage people expenses, and build a great culture from day one.
Aspen HR’s PEO services expertly support emerging fund managers, offering the expertise, tools, and insights to help you stay competitive and focused on growth. Connect with our team to discuss how we can help you scale your fund.
Learn more by downloading the HR Toolkit for Emerging Fund Managers.
