Jim Tennent, Director of Employee Benefit Due Diligence at Kudos says, “We witnessed an increased volume of deal transactions in excess of 100% from the start of the year up until the changes in CGT came into force on 5th April. Deals closed before the threshold saved shareholders 8% which amounted to six and seven figure sums in some cases. Businesses are faced with increasing volatility in the financial markets and cost reduction will become critical as they look to make savings in operating costs elsewhere.”
He continues, “Although many deals were closed before 5th April many will have missed this deadline and this has caused spectators to forecast a
slowdown in M&A activity particularly due to the credit crunch. For many transactions it’s vital that investors make a good return on their investment, therefore our employment benefit due diligence service is an attractive option – especially against the backdrop of financial uncertainty.
More and more investors are looking for more focussed and cost effective ways to operate their investment and making savings through employee benefits as part of the whole business operation is a good place to start.”
The operating costs of an employee benefits package can be reduced through careful analysis. For instance, administering an employee benefits scheme could be costly and carrying out a due diligence cost analysis highlights savings that could be made - such as moving the employee benefits scheme “online”.
Jim explains, “Whether we are acting for a vendor or buyer, it would be prudent from a risk/liability and cost point of view to carry out an employee benefit due diligence exercise which can in many instances improve the profitability of the company. Kudos saves costs by looking at ways to run a benefits scheme more efficiently across every element from administration to HR."
He concludes, “It’s often forgotten that employee benefit due diligence not only saves money in employee benefits schemes but also makes the scheme run more efficiently to the benefit of the employer. Moving a benefits scheme from being paper based to online for instance means they have instant access to information – so all relevant parties involved will benefit from the process."