Case Study: Pre-Purchase HR Diligence
A growing B2B company had reached a staff size of over 50 employees but lacked an HR strategy and expertise internally. The Board of Directors and CEO recognized the need for HR leadership support and engaged Rising Tide HR to analyze and implement a comprehensive HR function, including the development of a robust people strategy, policies, and procedures.
Problem
The company had set a goal to be acquired within a year or less, which required ensuring compliance with all employment elements and reducing costs before presenting to potential buyers.
Actions Taken
Individual meetings were conducted with all company leaders to gain insights into the current state of the business and its culture. This approach helped establish rapport and gain buy-in from the leaders, fostering a collaborative environment for implementing upcoming changes.
Comprehensive Review & Risk Assessment: A detailed review of all existing HR policies and practices was conducted. Based on this assessment, a comprehensive 6-month plan was formulated to automate and enhance the employee experience and HR systems.
System & Reporting Implementation: An HR Information System (HRIS) was implemented, consolidating multiple existing systems and processes. This new system significantly improved hiring, onboarding, payroll, and company compliance processes. Additionally, headcount reporting was introduced to correlate with the company's return on investment (ROI), allowing the measurement and reporting of employee investment to the board and during pitch presentations.
Leadership Mentorship: Extensive support was provided to all people managers through group and one-on-one coaching and mentorship sessions. This initiative aimed to elevate general management practices and assist in overcoming challenges faced by managers in leading their teams effectively.
Employee Benefits and Experience Enhancement: Over three months, a series of employee benefits and programs were implemented. These unique and customized initiatives were developed in-house or involved adjusting service providers to save costs. The programs included a mentorship program focused on professional development, leadership councils to enhance cross-departmental collaboration, a diversity and inclusion employee resource group, and improved health and retirement benefits. Furthermore, employees were educated on HR practices, empowering them with knowledge, and HR administration was transitioned in-house.
Results
The implemented HR leadership and overhaul resulted in the following outcomes:
Successful Acquisition: The company was acquired without any employee liabilities and was recognized for its exemplary HR practices and positive work culture.
Enhanced Reputation: The company's Glassdoor rating improved, indicating higher employee satisfaction and engagement.
Reduced Turnover: Involuntary attrition decreased within one year, indicating improved employee retention.
Streamlined Systems: The introduction of user-friendly and easy-to-administer HR systems reduced employee friction, eliminating complex processes and multiple touchpoints.
Cost Savings: Automation of onboarding and payroll processes resulted in reduced spending on bookkeeping.
Knowledge Transfer: An existing operational manager was trained on HR practices, enabling the smooth transition of day-to-day HR administration.
Rising Tide HR successfully guided the company's HR overhaul pre-purchase by implementing comprehensive HR strategies, procedures, and programs. This led to significant improvements in employee experience, compliance, and cost reduction, which gave the company a higher valuation at purchase. The company's successful acquisition, improved reputation, and reduced turnover rate indicated the positive impact of the HR leadership and overhaul initiatives. The company was well-positioned for future growth and success by establishing a strong HR foundation.
