Operations Due Diligence: An M&A Guide for Investors and Business

EMPLOYEE STABILITY

Employee stability refers to the ability of the business to retain employees, particularly key employees, who possess critical skills needed for the continued operation and success of the business. High employee turnover can have a significant morale and performance impact as well as a high budget impact. This expense includes the direct costs of finding and training new staff members and the indirect costs of things like the lost intellectual property that walks out the door along with the employees. In highly competitive markets, employee “job hopping” can present a serious risk because it can artificially inflate the cost of labor. Employee retention plans can take on many forms including compensation analysis and employment ...