ADDRESSING LABOR RISKS IN PRIVATE EQUITY

The document highlights the systemic labor risks associated with private equity, noting that portfolio companies employ 13 million US workers and face higher bankruptcy risks. It advocates for the adoption of Responsible Workforce Management policies by state pension funds to improve company performance and avoid operational disruptions, citing a $3.7 trillion backlog of portfolio companies and lagging returns as reasons for increased investor-led oversight.

• Private equity firms have a significant impact on the US labor market, owning at least 31,000 companies and employing 13 million workers, which represents nearly 10 percent of the private sector workforce, with high concentrations in low-wage sectors such as retail and hospitality.
• Poor workforce management in private equity portfolios can lead to material financial and operational harms, including bankruptcy, layoffs, litigation, fines, and work stoppages, whereas proactive management of wages, benefits, and health and safety can enhance performance and investor returns.
• Several US state pension funds managing over a trillion dollars in combined assets—including CalPERS and funds from New York State Common, Maryland, Massachusetts, and Illinois—have implemented Responsible Workforce Management policies to manage risk through manager selection, due diligence, and monitoring.
• The private equity industry is currently experiencing economic challenges, including lagging returns and an unprecedented $3.7 trillion backlog of portfolio companies, occurring alongside a climate of reduced regulatory oversight of worker protections.

APA

Private Equity Stakeholder Project (n.d.). ADDRESSING LABOR RISKS IN PRIVATE EQUITY. https://pestakeholder.org/wp-content/uploads/2026/03/PESP_OnePager_LaborPrinciples_Feb2026.pdf

Chicago

Private Equity Stakeholder Project. ADDRESSING LABOR RISKS IN PRIVATE EQUITY. n.d. https://pestakeholder.org/wp-content/uploads/2026/03/PESP_OnePager_LaborPrinciples_Feb2026.pdf.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=ADDRESSING LABOR RISKS IN PRIVATE EQUITY |url=https://pestakeholder.org/wp-content/uploads/2026/03/PESP_OnePager_LaborPrinciples_Feb2026.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderprojectndaddressing, author = {{Private Equity Stakeholder Project}}, title = {{ADDRESSING LABOR RISKS IN PRIVATE EQUITY}}, institution = {Private Equity Stakeholder Project}, url = {https://pestakeholder.org/wp-content/uploads/2026/03/PESP_OnePager_LaborPrinciples_Feb2026.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }