HR Due Dilligence

HR Due Dilligence.jpg

HR has a critical role in due diligence - both from the benefits and compensation side and the cultural side. Ultimately, many mergers fail because of human resources-related issues, such as culture clash. A company that embarks on a merger or acquisition without early and direct input from HR is living extremely dangerously.


Successful companies examine leadership models, recruiting, and what makes the organizations different or similar-as well as specific benefits and legal issues


Our experienced HR professionals are capable of conducting an HR departmental audit that will enable a seamless acquisition by working collaboratively to evaluate human resources policies, procedures and talent.


Here is how we can help you!



Review Confidential Materials


Obtain an employee census from the human resources information systems (HRIS) team. The census will contain the name, position, date of hire, salary and equal employment opportunity (EEO) information for each employee.


Examine confidential files containing employee relations matters and any matters currently in litigation. This will enable an understanding of what the company’s liability may be for alleged actions of the acquired company.


Review all collective bargaining agreements, labor-management memoranda and results of union organizing efforts.



Policies, Procedures and Training


Study the employee handbook to determine differences between that of the acquired company and the handbook, policies and procedures of the new owner. Make recommendations to combine the handbooks or amend the handbook with new policies that result from the acquisition.


Discuss training programs, new hire orientation and professional development for employee groups. There may be ways to preserve some of the existing training and integrate new training to ease acquisition-related anxiety among employees.



Employment and Departmental File Audit


Review HR department employment files for consistency and completeness. The files should be secured in the HR department and contain work eligibility documentation, emergency contact, work records, attendance, commendations, performance appraisals and any other employment-related information. There should also be a supervisor or departmental file for each employee; ensure the departmental personnel file does not contain information that potentially could be used for discriminatory employment practices. Record-keeping and record retention policies are also an important part of an HR due diligence process.



Communication Between HR Teams and Executives


Confer with the existing HR team to understand its practices, challenges and successes. Learning from the existing team will help maintain consistency throughout the audit as well as the acquisition. Share your audit findings, feedback and input with executive leadership on a regular basis so everyone is kept abreast throughout the acquisition.



There’s a hard side and soft side to mergers, and Stark HR understands both parts of the equation. We can support you create a combined organization that produces financial gains and were cultures are melded together effectively.