People VDD and exit readiness.
What a buyer will discount you for, surfaced and fixed while there is still time to fix it.
The argument
Sellers prepare the numbers. They rehearse the management presentation, they clean the quality of earnings, they get the customer contracts in order, and they arrive at the data room with the commercial story tight. The people position is prepared last or not at all, on the assumption that it is a compliance matter that the buyer's lawyers will work through in the schedules. The buyer's advisers do not treat it that way. They read the management team, the retention exposure, the comp structure and the employment liabilities as evidence about whether the plan they are underwriting is deliverable, and every gap they find becomes a price adjustment, an escrow, a deferred tranche, or a warranty the seller carries for two years after completion.
The seller almost always knows about the problem before the buyer does. What the seller does not have, at the point the buyer raises it, is time. This work moves that conversation twelve to twenty-four months earlier, when the finding is still a decision rather than a discount.
What the buyer's diligence will reach
A management team where two of the four people the plan depends on have no meaningful reason to be there eighteen months after completion, and no contractual reason either.
A founder or owner carrying decisions that were delegated on the org chart three years ago and never in practice, which the buyer reads, correctly, as a business with one point of failure.
A commission scheme written when the business was half the size, still paying against volume, and quietly holding average contract value below the level the forecast assumes.
Contracts of employment issued across four different eras of the business, with restrictive covenants that would not be enforced, no assignment of intellectual property from the contractor population, and a handbook last reviewed in 2019.
An open grievance against a member of the leadership team, or a tribunal claim listed for a date that falls inside the likely exclusivity window.
A prior TUPE transfer where the harmonisation was never completed, leaving two populations on different terms doing the same work, and an unquantified claim sitting behind it.
The assessment
Management team and key-person exposure
The buyer will assess the leadership team against the plan they are being asked to fund, not against the business as it has been run. That assessment covers who is genuinely capable at the next scale, who is retained by something more durable than habit, and where the business would stop if a named individual left in the first year. Where the answer is uncomfortable, there is a difference between a seller who has already strengthened the second tier and a seller explaining, in week three of exclusivity, why the commercial director has no restrictive covenants worth the paper.
Compensation and incentive architecture
Comp structures are read by buyers as a statement of what the business has been paying people to do. Where the scheme rewards an outcome the plan no longer wants, the buyer prices the cost of changing it and the disruption of changing it, and both land in the offer. Where equity, phantom equity or a growth share scheme sits over the cap table, the treatment on a change of control is a negotiation the seller should have concluded with the participants long before it becomes a term in the SPA.
Employment liabilities and the compliance base
Contracts, policies, working time and holiday pay practice, employment status across the contractor population, historic TUPE positions, live and threatened claims, and the disciplinary and grievance record that a buyer's counsel will sample. This is the territory the HR Audit covers, and for sellers it is where the assessment usually starts: the same seven areas, read as diligence exposure and priced accordingly.
Operating model and organisational structure
Spans and layers, decision rights, where capability actually sits as against where the chart says it sits, and whether the structure the business runs today can carry the growth the forecast assumes. A buyer paying a multiple on forecast earnings is buying the organisation that has to produce them. Where the model has stopped fitting, the redesign takes two to three quarters, which is the single strongest argument for starting this work early.
What the assessment surfaces, and what we are then retained to do
The report is the smaller half of the engagement. These are the workstreams that follow from it, scoped once the findings are agreed.
Operating model and organisational design
Spans and layers, decision rights, capability mapping and structural redesign for a business that has outgrown the architecture it is running. Delivered as a design and a sequenced implementation, not a chart.
Compensation and incentive redesign
Rebasing schemes that are paying for the wrong outcome, and resolving the change of control treatment of equity and long-term incentives with the participants before the process opens.
Senior exits and settlements
Board and leadership departures where the individual is a barrier the buyer will price: negotiation strategy, settlement terms, equity treatment, and the communication plan that keeps client relationships intact.
Tribunal and grievance closure
Live matters closed out before the data room opens: case chronology, process gaps, witness preparation, and a commercial judgement on settling against defending when the timetable is set by a transaction rather than by the tribunal.
Contract, policy and records remediation
Contracts of employment brought onto a single defensible footing, covenants that would survive challenge, intellectual property assigned, and the record-keeping a buyer's counsel will sample put in order.
Management team strengthening
Second-tier depth built where the plan depends on people who are not yet there, retention structured around role and mandate rather than cash alone, and succession made real ahead of the buyer testing it.
From the casebook
Four categories of people risk were resolved before the vendor pack reached buyers
A sponsor eighteen months from a planned exit commissioned an assessment of the people position across the portfolio company. Four categories of exposure came out of it: a commercial director whose relationship with the CEO had broken down and whose restrictive covenants had been drafted for a much smaller business; a sales commission scheme paying against volume while the equity story rested on contract value; two open grievances in the operations function; and a contractor population of nineteen people whose employment status had never been tested.
The commercial director exited on negotiated terms nine months before the process opened. The commission scheme was rebased over two quarters with the sales population consulted rather than informed. The grievances were concluded. The contractor population was reviewed, twelve were brought onto employment contracts, and the historic exposure was quantified and provided for.
All four appeared in the vendor pack as resolved matters with dates and documentation. The buyer's diligence raised each of them and closed each of them inside a week. None attached to price, and the escrow was agreed at the level the sponsor had modelled.
The co-founder had become the reason the business could not be sold
A founder-led technology business needed to exit its commercial director, a co-founder who had become a barrier to the next phase and who held a significant equity stake. The relationship had deteriorated to the point where the board could not run a sale process with him in post, and could not obviously run one with him leaving mid-process either.
We managed the whole of it: board strategy, without-prejudice discussions with the individual, and the negotiation of settlement and equity terms together rather than in sequence. The departure completed within six weeks. Client relationships were preserved, and the total cost came in approximately 40 per cent below the opening position taken by the individual's solicitor.
How we engage
The assessment is a fixed fee agreed at briefing, and takes four to six weeks for a single-entity business, longer where there are multiple entities or a prior transaction in the history. The output is a written report and a session with the board or the sponsor to work through it. Remediation is scoped separately, once the findings are agreed and the seller has decided what is worth fixing and what is better disclosed.
The work is principal-led throughout. Where scope requires it, employment counsel, forensic accountants, executive search or communications advisers are drawn from an established network on a defined-scope basis, and they work to the same brief rather than running parallel exercises.
Where this leads
Before market
HR Audit
The structured entry point: seven areas of the employment position, read as diligence exposure.
At execution
M&A Advisory
TUPE and integration once the deal is agreed, on share deals, asset deals and service provision changes.
Who we work with
Founders and owner-managed
One transaction, one outcome, and a multiple that carries everything the owner has built.
Who we work with
Private equity
Exit readiness across the portfolio, and the people chapter of the vendor pack.
The practice is led by Sam Bramhall.
Sam Bramhall is the Principal Consultant at Esbee, with two decades of board-level strategic HR and organisational advisory across telecoms, fintech, professional services, technology, and PE-backed businesses. Engagements are principal-led: you work directly with Sam throughout, not with a junior team managing upward.
About Sam and the firm →Frequently asked questions
- When should a seller start this work?
- Twelve to twenty-four months before the intended process. The constraint is not analysis, which takes weeks; it is remediation, which takes quarters. A comp structure cannot be rebased in a month without the rebase itself becoming a diligence finding. A management team cannot be strengthened between the teaser and the IM. A three-year pattern of inconsistent disciplinary practice cannot be reversed retrospectively. Sellers who commission this six weeks before the data room opens get a list of things they no longer have time to fix, which is worse than not knowing.
- How does this differ from vendor due diligence prepared by an accountancy firm?
- Financial VDD establishes the quality of earnings. It does not establish whether the people who generate those earnings intend to stay, whether the management team would survive a buyer's assessment, or whether the employment liabilities sitting in the workforce have been quantified. Those questions are asked in every commercial diligence process and answered, in most sales, by the buyer rather than the seller. People VDD answers them first, on the seller's terms, with the remediation already underway.
- What does the output actually look like?
- A written report structured the way a buyer's diligence questions arrive: each finding stated, quantified where quantification is possible, rated for the likelihood that a buyer will find it and the likely effect on price or structure if they do, with a remediation route and a realistic timeline. The report is written to be readable by a board, an adviser, and a sponsor. Where a finding cannot be remediated before the process, the report sets out how it should be disclosed and framed, because a disclosed and explained issue costs materially less than a discovered one.
- Do you do the remediation as well, or only the diagnosis?
- Both, and the diagnosis is usually the smaller part. The named workstreams that follow are the ones the report has identified: operating model and structural redesign where the business has outgrown its architecture, comp and incentive redesign where the structure is rewarding the wrong outcomes, senior exits and settlements where an individual is a barrier the buyer will price, contract and policy remediation, and the tribunal or grievance matters that need to be closed rather than carried into the process.
- What if a senior person needs to leave before the sale?
- That is one of the more common findings and one of the most time-sensitive. A senior departure managed properly, with the negotiation conducted before the process rather than during it, is a line in the disclosure schedule. The same departure attempted during exclusivity is a live employment dispute in the middle of a transaction, visible to the buyer, at the point where the individual has most to gain from delay. The sequencing is the whole of the commercial argument.
- How is the work scoped and priced?
- The assessment phase is fixed fee, scoped at briefing against the size of the workforce, the number of entities, and whether the business has had a prior transaction. Remediation is scoped separately once the findings are agreed, either as defined projects with fixed outputs or as a retained arrangement across the run-up to the process. Sellers frequently commission the assessment alone and hand it to their own team.
Last reviewed: July 2026
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