Private Equity
Due Diligence
Go beyond financial statements and gain critical understanding of the culture and leadership make up of acquisition targets. Puzzle provides a full comprehensive review and analysis of the target company’s HR infrastructure, leadership competencies, historical compliance, and succession plans.
Risk Mitigation
HR-related business risk comes in many forms: Talent, Policy, Compliance, Culture, and Organizational Vitality. Lack of compliance with Federal, State and Local labor laws can be a tedious on business results. Our output identifies HR related business risk and necessary mitigation steps.
Add-on Acquisition Transition Support
Merging entities can be a real challenge. The combination of benefits, policies, procedures, compensation and bonus structures requires research, planning, and a robust communication strategy, and our team will do all the work to ease the transition.
Partner with PuzzleHR to Maximize Investment Returns
You’ve done your diligence and invested. You made that investment because you believe that the people will produce the result upon which you based your thesis.
What if you could deploy a solution across your portfolio investments that would help ensure that company managers have the necessary resources to create and maintain a motivating environment where people want to do the work required to deliver the expected results?
What if you had full dashboard level visibility into the HR function and results across your portfolio of companies?
We leverage our proprietary diagnostic system to provide you with the intelligence necessary to de-risk your investment, decrease costs and increase profitability at the target company.
You've Got the Humans, We've Got the Resources.
Let's Talk.
Need help? We've got you covered.
Below you’ll find answers to the questions we get asked the most about our services and products.
Why Private Equity Firms Put Portfolio Companies on Outsourced HR
Private equity firms outsource HR across portfolio companies to standardize the HR function, remove compliance liability, and protect EBITDA without adding headcount at every portco. A fractional HR model gives each company in the portfolio a full HR department on a subscription, run to one standard the operating partner can see. This page covers what unmanaged HR costs a portfolio, how outsourced HR works across multiple companies, and what it does to exit value.
What HR problems do PE firms face across a portfolio?
Every portfolio company carries HR risk, and most of it stays invisible until diligence. Worker misclassification, unpaid overtime, missing handbooks, mishandled leave, and expired compliance postings sit on the books as unrecorded liabilities. One company's exposure is a nuisance. Fifteen companies' exposure is a pattern that shows up in every exit. The second problem is inconsistency. Each portco runs HR its own way, on its own platform, with its own gaps. The operating partner has no single view of risk, cost, or quality across the portfolio.
How do private equity firms manage HR across portfolio companies?
The three options are build, buy, or outsource. Building means adding an HR hire at every portco, which raises G&A and drags on the multiple. Buying a PEO means co-employment and ripping out payroll systems. Outsourcing to a fractional HR provider keeps each company's systems in place and runs the HR function to one standard across the portfolio. Outsourced HR fits the PE model because it is modular and subscription-based. A portco takes just compliance, just payroll administration, just leave management, or the full department. Coverage scales up during a hiring push and down after a restructure. No new FTEs. No renegotiation.
Is outsourced HR the same as a PEO for portfolio companies?
No. A PEO co-employs the workforce and usually requires moving to its own payroll and benefits platforms. Outsourced HR is a service, not co-employment. The portfolio company stays the sole employer, keeps its existing systems, and buys only the HR functions it wants. For firms that value clean cap tables and platform flexibility across a portfolio, that distinction shows up at exit.
Do all portfolio companies have to use the same HR platform?
No. Outsourced HR is technology-agnostic, so it works with whatever HCM system each portco already runs. One company on ADP, another on Paylocity, another on UKG each get the same standard of HR support with no systems migration. The firm standardizes the HR function, not the software.
Does outsourced HR change EBITDA and exit value?
Yes, in two ways. It keeps HR off the payroll as fixed G&A, which protects EBITDA and the multiple it earns. And it produces documented, defensible HR operations that survive buyer diligence. Undocumented HR liabilities get found in quality-of-earnings and legal diligence. When they surface late, they turn into purchase-price adjustments or deal delays. Standardized HR records across the portfolio remove that friction before the buyer's lawyers start digging.
How does outsourced HR help with carve-outs and add-ons?
A carve-out or add-on needs a working HR function on day one, and the transition clock is short. Standing up HR internally takes months. A fractional provider steps in immediately, runs payroll and compliance from the first cycle, and migrates records without breaking data integrity. This matters most during the transition services agreement (TSA) window, when the seller's HR support is about to switch off and the acquired company has nothing of its own yet.
How does PuzzleHR Work for PE Portfolios?
PuzzleHR is an outsourced HR department on a subscription. It runs HR for 1,000+ U.S. companies, including portfolio companies held by private equity firms. Each portco buys only the services it needs, from compliance to payroll to benefits to talent to leave to the full department and keeps its existing HCM platform. For the firm, that means one HR standard across the portfolio, one point of accountability, and HR that is ready for diligence before the exit process starts.