When it comes to evaluating performance in the private equity-backed environment, metrics are essential. As EBITDA is the most commonly cited metric, many KPIs are oriented towards EBITDA optimization. And while growth and profit margins are the main markers of success, there are other metrics that also need consideration but may be less commonly used. To capture maximum value for your business, be sure that you are tracking and evaluating performance based on the following key metrics.
“In a private equity-backed environment, you may not have as much leeway to make mistakes, so it’s all the more important that you have great performance management.”— Scott Peters, multi-exited private equity-backed CEO
Employee Retention and Engagement Metrics
Employee retention metrics have surged in importance within the past year given the rate at which employees continue to resign and change jobs. In fact, disengaged employees can result in major profit losses. To this end, attracting top talent and ensuring that employees stay engaged, (once a lower priority than more pressing matters like EBITDA and financial margins), is now of critical concern. Sponsors are increasingly concerned with turnover rates as they evaluate overall business health and leadership performance.