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Human Capital Valuation: 
Private Equity/M&A Due Diligence

While Human Capital can be a differentiated value driver, most organizations face challenges in measuring and reporting its impact on the business. HCMI's Human Capital Reporting & Disclosure services set the global standards in leading and educating organizations on what to measure, what it means to the business, and how to report and disclose to meet voluntary and regulatory compliance standards. 

Find out why great companies like these have chosen HCMI

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Human Capital Valuation & ISO Reporting

Human Capital Valuation & ISO Reporting

HCMI's Human Capital Financial Statement (HCF$) is a comprehensive reporting framework that values the business impact of human capital in every stage of the talent management lifecycle and provides the key metrics to meet the ISO Human Capital Reporting Standards.

HCF$ includes three unique statements:

Human Capital Impact Statement

Measures the quarterly or annual impact of human capital on financial performance

Human Capital Asset Statement

Quantifies the total value of the workforce by job category

Human Capital Flow Statement

Traces the flow of human capital showing where and how it is allocated and used

What are the Benefits?

HCF$ details the cost, impact and return on all areas of investment a company makes in its talent. It also meets the ISO Human Capital Reporting Standards. Use HCF$ to answer these questions:

  • How can we model our workforce to optimize cost, profit and productivity?

  • What is driving our Total Cost of Workforce and how is it trending? 

  • What is our workforce productivity? Is it increasing, decreasing or static?

  • What is the differential human capital ROI of different job roles?

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Private Equity/M&A Due Diligence

Private Equity portfolios and targets and are becoming heavily weighted with companies whose economic value is driven primarily by intangible workforce assets (e.g. intellectual property, innovation, leadership).

Yet, most firms don’t measure the impact of the workforce on business results beyond compliance risks and labor costs, which can result in substantial gaps in valuation in the diligence phase and missed opportunities in the growth and operations improvement phases.

HCMI designed its Private Equity Services to provide the resources to support decisions through each stage of the fund life cycle:

Phase

HCMI Resources

Diligence

Company valuation and deal go/no go support to quantify and benchmark material human capital risks and contributions to enterprise value.

Ongoing Operations

Identify and monitor human capital operating improvement opportunities to drive gains in enterprise value.

Exit

Company valuation support to quantify and maximize human capital contributions to enterprise value.

Make better go/no go and valuation decisions, improve ongoing operating gains, and drive higher valuations at exit.

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