MESSAGE FROM OUR CEO’S DESK

I can’t stop talking about the Charter Employer Brand Summit from last month, but that’s because I keep pulling nuggets of wisdom out of my notes! We heard from Pete Stavros, the Co-Head of Global Private Equity at the private equity firm KKR. PE firms are known for being ruthlessly committed to the bottom line, and yet his firm puts its portfolio company CEOs through empathy training.

Here's why: KKR found that CEO empathy scores correlate with quit rates and engagement more strongly than almost anything else they measure, and about 70% of their portfolio companies see a significant drop in turnover when leadership empathy goes up. KKR recognizes that turnover and disengagement ARE direct costs, including higher recruiting, training and ramp costs, and more quality and safety issues. So they teamed up with a Stanford psychologist to build an empathy training for CEOs that focuses on active listening drills, community immersion trips, and frontline work.

The irony is not lost on me. Too often, we treat empathy like a nice-to-have, a soft skill for HR to worry about. Meanwhile, here’s a private equity firm treating it like the high-return lever it is.

As an HR leader, the better part of my career was spent trying to get CEOs and leaders to see the perspectives of their teams. Now I’m on the other side as a CEO who still deeply believes in understanding their team’s lived experiences and building the best possible organization for them to thrive in. Because I know that’s how we’ll all win, and how validating it is to see a PE firm espousing those same principles and values!

Here’s how I would advise CEOs and leaders start building their empathy muscle:

• Get closer to the work. Sit in on your newest hire for a week. Not to supervise, but to remember what it feels like to be in their seat.

• Share your real engagement survey results. And publicly commit to fixing two or three items people flagged.

• Actually come back and tell people what changed. Silence after a survey is so much worse than never asking.

• Get regular feedback. Ask "how does this feel from where you sit" in your next 1:1, and then stop talking.

• Consider how you would want to be treated. The more you do the above, the more you can put yourself into the shoes of your team, understand their perspective, and build an organization and company they can be proud to work at. 

Empathy doesn't replace a good P&L. But the leaders who build lasting companies aren't the ones who compartmentalize the two either!

THE HR BRIEFING 🗞️

THE LATEST NEWS TO KNOW

HR headlines and stories, curated with our perspective. 🤝

A survey of U.S. managers who use AI at work revealed that 25% frequently rely on AI to guide layoff decisions, directing the technology to evaluate factors like performance (80%), attendance (57%), salary (42%), medical leave (31%), and age (14%).

• ↪️ PFunc’s Perspective: Use AI to inform decisions, but never to make the final call. Automating and AI-ifying HR decisions leads to confusion and lawsuits - Meta learned that the hard way!

A 25-year decline in labor force participation holds steady as discouraged job seekers opt out of the workforce altogether, citing mass layoffs, mental well-being, and returning to school.

• ↪️ PFunc’s Perspective: This should ring serious alarm bells for executives that traditional retention and well-being playbooks are broken and need to be rewritten. Though, here at PFunc we believe in the portfolio career, so we’re not surprised by this stat!

A couple of other trending stories we think you’ll like:

• The Conference Board: Report finds AI adoption is soaring, but less than half of employees feel properly trained.

• Bloomberg Law: The Trump administration is shifting federal employee appeals from an independent board to direct executive control.

COMPLIANCE CHECK

Watch out for these HR compliances going into effect (or hitting deadlines) this month.

• Colorado (eff. 8/12) – HB 1207 will require private employers with 100+ workers to submit EEO-1 workforce demographic data to the Secretary of State starting July 1, 2027, even if the federal reporting mandate is repealed.

• Missouri (eff. 8/28) – Servicemembers Civil Relief Act protections, including the right to sue for violations, will soon extend to Missouri and out-of-state National Guard members called to active duty for over 30 consecutive days.

• New Hampshire (eff. 8/31) –  Independent contractors can voluntarily participate in portable benefits plans funded by optional hiring party contributions without jeopardizing their contractor status.

THE PEOPLE PULSE

There are exciting changes happening at People Function! Our first CFO, Morgan Rodd, officially joined the team this week. A work partnership a long time in the making, he and Emma first met when she worked with him at Canvs in 2017, and most recently, his latest full-time role was as the CFO at Signpost, one of PFunc’s first clients! Morgan brings a wealth of experience as a finance leader and operator, and we can’t wait to see how he takes PFunc to the next level.

Join us in welcoming Morgan to the team! 👏

CHRONICALLY ONLINE📱

For the true HR nerds out there: a few baby names inspired by the job! 🤭🍼

Join 100,000+ followers across PFunc’s Instagram, TikTok, and LinkedIn, hailed as “one of the best HR accounts online today.” 😉

STAY IN TOUCH 💌

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Join the Talent Network here (it’s free!). Whether you’re actively exploring new opportunities or happily employed but open to the right fit, becoming part of our network boosts your profile when roles align with your experience, skills, and career goals.💡

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Every Tuesday, The PFunc Pulse delivers the HR news and compliance shifts you actually need to know about, without all the corporate fluff. Emma brings her unfiltered take on the trends keeping CEOs awake at night, served with the gritty, practical wisdom of a founder who’s seen it all. Real talk for better people decisions, week by week. (P.S. Do your work bestie a favor and forward this— friends don't let friends do old school HR. 🫢)