The diminishing returns of an 80hr work week: how overwork impacts returns 

May 6th

by Andrés Ramos, Content Marketing Specialist – eVestment Private Markets

For private markets professionals, long hours come with the territory. When a deal is on the line or client makes an ASAP request for data, the day ends when the work is complete, not when the clock hits the proverbial “quitting time.”  

In their research to understand what it “feels like” to work in private equity, Prof. Richard Taffler and Dr. David Cooper note that, “the private equity industry exists on a fundraising treadmill, with all parties being continuously barraged in different ways, so there is always something that needs doing.”  

To handle the seemingly endless work, private markets professionals simply bear down and log more hours until the job is done. The Work-Life Report found that in a normal 5-day work week, over half of private markets employees surveyed regularly work over 9.6 hours a day, and that excludes any evening or weekend time spent working. With 1 in 5 survey respondents reporting that they work on their commutes and 13% describing work as their key evening activity, it’s not difficult to see how the private markets became synonymous with an 80 hour work week and an “always on” approach to work.  

For some, the 80 hour work week is viewed as a point of pride, or a rite of passage in the industry. But as the private markets evolve and grow increasingly competitive, it is worth asking, is working longer and “harder” really the best option? 

Overwork is a contributor to stress, which had a direct negative impact on both individuals and firms. As Charlene Cowen, Head of People and Wellbeing at MJ Hudson notes, [When employees are stressed,] you tend to get far higher levels of both absenteeism and presenteeism. They may be at their desks, but their productivity is vastly diminished. They miss deadlines; it’s not good for anyone.” 

Another area that can be negatively affected by overwork is decision-makingIn their research, Taffler and Cooper go on to highlight the importance that instinct and intuition make in decisionmaking.  

It is important to say, here, that to really tap into instinct and intuition, one has to find time to stop and reflect, but nearly two thirds of our respondents said it was hard to find time to stop and think. This points to the risk that too much ‘busyness’ and skewed work-life balance may impair important decisions by depriving practitioners of thinking time. This could ultimately compromise returns.

As workers charge forward to meet deadlines and execute on various responsibilities, time spent to slow down, reflect, and challenge assumptions may be overlooked. This lack of review and critical thinking can sometimes result in poor investment decisions. A prime example of this is the over-eagerness of some private markets investors to throw money at over-hyped and overvalued companies only to see them crash and burn 

The private markets industry continues to evolve and the idea of “business as usual” is changing faster than ever. Firms would do well to re-evaluate everything about how they work, including the time they spend working – or not, as the case may be.

Explore deeper insights

The Work-Life Balance Report, by eVestment Private Markets and MJ Hudson offers a look into a wide range of topics related to working in the private markets and is based on the survey responses of over 300 industry employees. Download the report here to gain insights on among other topics, how overwork can negatively affect your team and your firm’s bottom line.  

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