Private equity (PE) sponsors today face unprecedented challenges due to global economic uncertainty, slow market activity, and tight credit conditions. As the pressure mounts to optimize existing investments and maximize value creation, one critical area often overlooked in the due diligence process is Human Resources (HR).

 

Research from Harvard Business Review shows that leadership and workforce management account for a 10-15% impact on financial performance and a 25-30% impact on market valuation. Talent management has become a key value driver in private equity, yet many PE firms lack the internal resources to conduct specialized HR pre-acquisition due diligence. This gap often leads to missed risks and lost opportunities for operational improvement.  

 

Method HR offers comprehensive pre-acquisition HR diligence to help PE sponsors mitigate risks, ensure compliance, and position portfolio companies (portcos) for scalable growth. Resource allocation can impede HR diligence.  Method HR may help navigate employee risks in an acquisition.  We point out risks that PE may not be aware of.

 

Post-acquisition, Method HR acts as the Professional Employer Organization (PEO) of record, managing day-to-day HR functions while providing strategic value through workforce optimization, talent retention, and leadership continuity.