People due diligence.
What you are buying, what it is worth, and what it should cost you.
Scope
Management team quality and depth; retention and key-person risk; compensation and incentive architecture; culture and integration risk; employment liabilities and TUPE exposure.
Deliverable
Written report structured for the investment committee: findings, quantification where quantification is possible, effect on the model, and the conditions worth taking into the agreement.
Timeline
Two to three weeks from data room access, with an interim read at the end of week one on anything affecting price or structure. Scoped to fit the exclusivity window.
Fee basis
Fixed fee, quoted at briefing. No hourly component, no charge for the read-out with the deal team.
The argument
Commercial diligence tests the market. Financial diligence tests the earnings. Legal diligence tests the title and the contracts. The workstream that tests whether the people who produce those earnings will still be producing them in two years is either absent or delegated to a paragraph in the legal report about employment claims. The model, meanwhile, is built on a management team delivering a plan they have not yet been asked to commit to, and on an organisation continuing to function through a change of ownership it has not been told about.
The findings that move a deal are rarely the ones in the schedules. A finance director who has already decided to leave, a sales incentive structure that will collapse the pipeline mix the moment it is aligned to the acquirer's, an operating model that cannot absorb the volume the synergy case assumes, a TUPE position on a prior outsourcing that nobody has quantified: each of these is knowable before signing, each changes the price or the structure, and each becomes considerably more expensive to discover in the first hundred days.
What the diligence covers
Management team quality and depth
Structured assessment of the leadership team against the plan being underwritten rather than against the business as it has been run. Who has operated at the scale the plan requires and who has not; where the second tier is thin enough that a single resignation stops a workstream; which incumbent is competent in the current model and would struggle in the one the value creation plan implies. The output names people and states a view, because a report that declines to do so is of no use to an investment committee.
Retention and key-person risk
Who is actually retained, by what, and for how long. Notice periods, restrictive covenants and their enforceability, earn-out and rollover exposure, and the difference between a person who is contractually tied and a person who has no reason to go. The assessment quantifies what a retention pool needs to be, sized against the individuals the plan depends on rather than spread evenly across a leadership team for the sake of appearing fair.
Compensation and incentive architecture
What the target has been paying people to do, which is not always what its management says it rewards. Commission and bonus mechanics tested against the pipeline they produce, equity and phantom schemes and their change-of-control treatment, pay structures that will not survive alignment to the acquirer's grades, and the cost of the harmonisation that alignment implies. Where a scheme is driving the wrong behaviour, the cost of changing it belongs in the model before signing.
Culture and integration risk
How the target makes decisions, where authority genuinely sits, and what happens to that when it is placed inside the acquirer's governance. This is where the synergy case is most often wrong: not because the numbers were miscalculated but because the model assumed an organisation that would accept being run differently. The assessment identifies which elements of the acquirer's operating model can be imposed, which cannot, and what the sequence should be.
Employment liabilities and TUPE exposure
Live and threatened claims, holiday pay and working time practice, employment status across contractor and gig populations, collective consultation history, pension and auto-enrolment position, and the historic TUPE transfers whose harmonisation was never completed. Each is quantified where it can be, and where it cannot, the report says so and sets out what protection to seek instead of implying a precision that is not available.
What it costs to run in year one
The integration and people cost the model has usually not carried: the retention pool, the harmonisation of terms, the consultation timetable and its effect on the synergy phasing, the roles that will need to be recruited because the acquired team will not all stay. Deals are frequently underwritten with a synergy number and no view of the expenditure required to reach it.
From the casebook
The deal had been modelled on the assumption that the management team would stay
A mid-market sponsor was three weeks into exclusivity on a services business where the investment case rested on the incumbent management team executing a buy-and-build. The financial diligence was clean. The commercial diligence supported the growth thesis. Nobody had established whether the management team intended to be there for it.
We ran structured interviews with the leadership team against the plan rather than against the business as it stood. Two of the five were committed and capable at the scale intended. One was competent and had already begun a conversation elsewhere. One had been running a function that the buy-and-build would restructure out from under him, and knew it. The finance director, on whom the integration capability entirely depended, had no restrictive covenants of any substance and a notice period of one month.
The retention pool was resized and redirected to the three individuals the plan actually required. The finance director's terms were renegotiated as a condition of completion. A hiring plan for the fourth role was priced into the first-year budget rather than discovered in month four. The deal completed at a price reduced by the quantified cost of the gap.
A prior outsourcing had left an unharmonised population and an unpriced claim
A trade buyer was acquiring a facilities business that had itself absorbed a contract under TUPE four years earlier. The legal diligence recorded the transfer and confirmed it had happened. What it had not established was that the transferred population remained on materially better terms than the employees doing identical work alongside them, that an attempt at harmonisation eighteen months after the transfer had been abandoned without being unwound, and that two of the transferred employees had raised grievances about pay parity.
We quantified the exposure across the affected population, modelled the cost of harmonising properly against the cost of leaving the position as it stood, and set out why the earlier attempt had been void. The buyer took an indemnity against the historic exposure and carried the harmonisation cost into the integration budget with a legally viable route to achieving it.
How we engage
Briefing takes an hour and establishes the plan being underwritten, the timetable, and where access will be constrained. Work begins on data room access. An interim read goes to the deal team at the end of week one covering anything that bears on price or structure, because a finding delivered with the final report and no time to act on it has cost the buyer the value of knowing it. The full report follows in week two or three, with a session for the deal team and, where useful, the investment committee.
The work is principal-led. Where the target spans multiple jurisdictions or the scope requires employment counsel or actuarial input, those specialists are drawn from an established network on a defined-scope basis and work to the same brief. Where the deal proceeds, the same understanding of the target carries into the integration rather than being rebuilt from the report by a team that has never met the management.
Where this leads
At execution
M&A Advisory
TUPE and integration once the deal is agreed: the work that decides whether the diligence findings were acted on.
Who we work with
Private equity
Sponsors and portfolio companies across the deal lifecycle, from diligence through to exit.
For advisers
Introduce a client
Corporate finance and legal advisers with a people question sitting between the deal and the plan.
Before market
People VDD and exit readiness
The same questions asked from the other side of the table, twelve to twenty-four months earlier.
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
- Can this be delivered inside an exclusivity window?
- Yes, and it is scoped on that assumption. Standard turnaround is two to three weeks from data room access to written report, with an interim read at the end of week one covering anything that bears on price or structure. Where exclusivity is shorter, the scope narrows to management assessment and employment liability, which is where the money usually is. The timetable is agreed before the engagement starts and the report lands on the date it was promised.
- What does the fee cover, and how is it structured?
- Fixed fee, quoted at briefing against the size of the target workforce, the number of entities and jurisdictions, and the depth of management assessment required. It covers data room review, management interviews, the written report, and a session with the deal team and the investment committee where that is useful. There is no hourly component and no charge for the read-out.
- How does this differ from what the employment lawyers do?
- Employment counsel establish what the target is legally exposed to and draft the protection into the agreement. That is necessary and it is not the same question. The commercial question is whether the management team can deliver the plan, what it will cost to keep them, whether the comp structure is paying for the behaviour the plan needs, and what the integration will actually take. Those answers change the model rather than the schedules. The two workstreams run alongside each other and the findings are shared.
- Do you interview the target's management team?
- Where access permits, yes, and it is the single most valuable component. Structured interviews with the leadership team against the value creation plan, not against a competency framework. Where access is restricted, which is common before signing, the assessment is built from the data room, the management presentation, the organisational data, and the market view, with the gaps stated explicitly rather than papered over.
- What happens if the diligence finds something that kills the deal?
- That happens rarely. What happens frequently is that the diligence changes the price, the structure, or the conditions: a retention pool sized against the people who actually matter, an escrow against a quantified employment liability, a condition precedent that a departure is concluded before completion, or a revised view of what the first year will cost to run. A finding that reprices a deal by two turns is worth considerably more than the fee.
- Do you work for the acquirer or for the lender?
- Both. The work is most often commissioned by a private equity house or a corporate acquirer, occasionally by a debt provider who wants an independent read on management capability before committing. The report is written to be readable by an investment committee, and it says what it found rather than what the commissioning party would prefer to hear.
Last reviewed: July 2026
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