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Since 2021, my team has done pre-acquisition workforce due diligence for private equity clients. We get a limited HR dataset and a few weeks to tell the deal team what the workforce says about the business. After close, we keep working with many of those HR teams for years, and that's where we learn what sat underneath the findings.

At one field-services company, turnover wasn’t an obvious risk, and standard reporting would have stopped there. When cut by role and tenure, we found that on-demand technicians had 70% first-year turnover, and only 51% made it to month 12. In growth markets outside of the company's two core states, survival was 56% and dropping as hiring ramped. We tagged it HIGH RISK since the company planned to grow by hiring technicians it couldn't keep.

Our reports influence the deal; whether it’s go/no-go or bid size. We picked up three habits under that pressure, and they’ve influenced our work in our direct-to-HR business.

Turnover Analysis: The Finding Rarely Lives in the Headline Number

On one 2024 project, voluntary turnover was below the industry benchmark and trending down, which could easily be seen as low risk. Our team dug further and found something in new hire survival rates. In this industry, turnover usually settles after the first year, but it took over two years at this company. The HR team suspected travel or career paths. We tagged it MEDIUM RISK and recommended digging in after close.

After close, we did a deep dive, and found three issues. The HR team was right on two: travel and lack of promotion created turnover. Our surprise finding was that early increase size didn’t matter, but timing did. More frequent, smaller increases were more effective than one large increase, with no additional cost. This company had the right instinct, they suspected increases were correlative. They looked at pay increase size, did industry comparisons and benchmarks, and everything appeared clean. But they had focused on size, not timing.

For HR reporting, you must dig deeper than the high-level metric. Investigate cuts that can “break” the overall number. In this case, the high-level metric was pay increase size. But the timing of them is what broke the headline. The ROI often lies just beneath the surface, that your standard reporting doesn’t see.

“There’s Something There, But we Don’t Know What it is” is a Valid Answer

On one project, we did some pretty advanced contextual analysis of company reviews and survey data. We were confident that there was an issue with workloads and hours, with some signs of work/life balance problems. However, there wasn’t enough there to target the exact symptom or offer a prescription. Our final read was “there’s a problem here, but we aren’t sure what exactly is going on” (paraphrased).

That restraint paid off. The traditional read of our initial analysis would have been “people work too much”. After close, we tested average hours, weekend hours and consecutive high-workload weeks, and none correlated with turnover. Long hours mattered only above about 67.5 a week, and that was a tiny group. What we did find, and this was the pivotal piece, is that technicians getting fewer than 30 hours for more than four straight weeks had turnover that was triple the expected.

So the primary driver of that negative sentiment around workloads was too few hours, not too many. Without the measured approach, we would have delivered an assumptive, incorrect finding. And that would have hurt our credibility, which is the absolute worst thing that can happen to an analyst, consultant, or HR team.

Whether it’s private equity or an HR team at a corporation, an inconclusive result without an obvious next step still counts. In fact, sometimes it creates a pull effect. The best place you can be as an analyst is having people hungry for more data. So telling leadership “I’ve found a loose correlation between pay and turnover, but I need city-level data to go further” is a perfectly acceptable, if not ideal answer.

How to Structure HR Reporting: Risk, Opportunity, Confidence

We build every page of a presentation the same way:

The Claim, real examples:
- “New Hire Turnover is Highly Correlated with Early-Tenure Increase Frequency”
- “Referred Employees have Higher Productivity and Lower Damage Rates”
Risk Level:
- Low/Medium/High. What business risk are presented.
Opportunity Size, real examples:
- “Changing early-tenure increase cadence could improve 12-month survival rate by 20%, without increasing spend”
- “A referred employee creates $47,000 in value vs. a blind hire over the first six months”
Confidence Level, with data limitations, caveats, open questions

This all lives in the first 1/3 of the first page of each section. We’re analysts, so of course there are pages and pages of analysis, charts, and data to support each finding. But our goal is to tell the story, in full and featuring a call to action, in less than 100 words at the top of the page. Analysts will look at the charts, some HR staff will look at the charts, some private equity partners will. But CEOs, VPHRs, and private equity leaders probably won’t. It’s important for us as the analysts to tell the story without being burdensome or requiring unnecessary time or processing from our stakeholders.

The Same Habits Fit Inside an HR Team's Month

You don't need a deal deadline to use this. Most monthly HR reporting runs on thin data, a short clock and a reader with no time. The habits are cheap, easy, and repeatable. A headline, a risk assessment, a ROI opportunity, and a confidence level. We'd be glad to talk through how they could suit your reporting.

This work also shaped what we’re building at Arbor. You can ask your workforce data a plain-English question and get a consultant-quality answer, a chart and a live dashboard. See how the people analytics platform works. Our answer engine uses the same philosophy as outlined above. Quick, actionable information that makes the next steps clear and obvious.

Brad Hilbert is co-founder of Arbor Analytics (arbor-analytics.biz) and has built workforce analytics practices since 2008, including pre-acquisition diligence for private equity and turnover, compensation and cost-of-turnover work with HR teams.