Due Diligence: 10 Key Metrics That You Should Always Benchmark

Introduction

In the fast-paced world of mergers and acquisitions (M&A), due diligence plays a critical role in ensuring informed decisions. Taking this a step further, benchmarking key metrics during this process allows stakeholders to evaluate performance, uncover risks, and identify opportunities for improvement.

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By comparing an organization’s metrics to industry standards, you can gain a clear perspective on its operational health and value. In this blog, we’ll highlight 10 essential metrics you should always benchmark during due diligence to maximize insights and minimize risks.

What is Due Diligence?

Due diligence is the investigative process conducted before entering into a significant business transaction, such as acquiring a company or restructuring an organization. Its purpose is to verify all material facts about the target entity, including financial, operational, legal, and strategic aspects.

In the context of HR and organizational performance, due diligence often involves analyzing data that reveals how effectively the workforce contributes to business objectives. By benchmarking critical metrics, you can assess whether the company is operating efficiently, identify areas for improvement, and uncover risks that might impact future performance.

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10 Key Metrics to Benchmark in Due Diligence

1. Revenue per Employee (RPE)

This metric is calculated by dividing the total revenue by the number of employees. It provides a snapshot of workforce productivity and efficiency, indicating how effectively a company generates revenue relative to its headcount.

Benchmarking this metric against industry standards up front helps to uncover whether the organization is underperforming or exceeding expectations at an overall level. It’s the first metric that you should analyze - and you can benchmark RPE for free right here.

2. Revenue per Function Employee

While overall revenue per employee is important, drilling down into specific functions — such as Sales, Marketing, or Finance — can offer deeper insights. This metric evaluates how each function contributes to revenue generation and whether resource allocation aligns with business priorities.

For example, an underperforming sales function relative to benchmarks may indicate inefficiencies or the need for targeted investments. Meanwhile, a high revenue per sales employee can indicate an efficient sales force.

3. Function as % of Total Employees

This ratio measures the proportion of employees in a specific function compared to the total workforce. It reveals the company’s organizational structure and resource distribution by department.

For instance, you would expect a tech-driven company to have a higher percentage of employees in the IT function when compared to general industry benchmarks. However, in a due diligence context it can be very useful to identify areas of underinvestment or inefficiency.

4. Turnover as % of Employees

Turnover rate is a crucial metric that reflects employee retention and organizational stability. High turnover rates can indicate dissatisfaction, cultural misalignment, or excessive workloads, all of which can negatively impact productivity and profitability. Benchmarking this metric helps assess whether turnover levels are within industry norms or signal potential risks.

5. Cost per Employee

This metric is calculated by dividing total operating costs by the number of employees. It highlights the cost-effectiveness of workforce investments. Benchmarking cost per employee provides clarity on whether a company is over- or under-spending on its workforce compared to industry peers, enabling better cost optimization strategies.

6. Operating Margin

Operating margin measures the percentage of revenue that remains after covering operating expenses. While this metric is often viewed from a financial perspective, it directly ties to workforce productivity, functional efficiency, and resource allocation. Benchmarking operating margins can reveal whether labor and operational costs are managed effectively.

7. Employee Engagement Scores

Although qualitative, employee engagement is a vital indicator of workforce satisfaction and alignment with company goals. High engagement typically translates to better retention, higher productivity, and improved innovation. Benchmarking engagement scores against industry standards provides insights into cultural strengths and areas requiring attention.

8. Span of Control (Manager-to-Employee Ratio)

This metric evaluates the average number of employees managed by a single supervisor. An optimal span of control varies by industry, company size, and function, but it reflects organizational efficiency and management capacity.

Remember that a span that is too wide may indicate overburdened managers, while one that is too narrow might suggest inefficient resource allocation.

9. Training and Development Spend per Employee

This metric measures the average amount spent on upskilling and reskilling employees. Companies with higher investments in training often have more agile, future-ready workforces. Benchmarking this metric can highlight whether the organization prioritizes employee development and innovation relative to its peers.

10. Time-to-Fill Vacant Roles

Another recruitment metric, time-to-fill measures how long it takes to fill an open position, reflecting the efficiency of recruitment processes. Prolonged vacancies can disrupt operations and signal challenges in attracting talent. Benchmarking this metric reveals whether the organization’s hiring processes are competitive or require improvement.

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Conclusion

Benchmarking these 10 metrics during due diligence offers a comprehensive view of an organization’s performance, productivity, and potential risks. By comparing these metrics to industry standards, stakeholders can make informed decisions about investments, acquisitions, or restructuring initiatives. Benchmarking doesn’t just highlight gaps—it provides actionable insights to optimize operations and unlock value.