October 19th, 2017 | Sterling

Tips for Re-screening Employees After a Merger or Acquisition

Acquisitions and mergers are a common occurrence in today’s business world fueling growth and profitability, expanded market share and the introduction of new products and services. There are many items to be checked off on the “to do” list during the merger process from the organisational side, but what about the human factor?

Reasons for Re-Screening Employees After a Merger

Companies need to be aware of the possible risks that could exist in the staff of the business they just acquired. Organisations need to make sure that a background screening programme is included in the procurement process and added to the total cost of ownership to mitigate the risks and protect the brand after the merger.

Background screening policies will depend on industries. Some industries such as financial, transportation and healthcare require screening, while others do not. There are a few reasons why it is important to re-screen employees after a merger:

• A purchasing company might have a comprehensive background screening policy in place, but the newly acquired business has never conducted screening on their employees
• The newly acquired business does perform background screening at the time of hire, but they do not follow the same screening procedures as the purchasing company
• The acquired company performs background screening when they hired their employees, but there is no way for the new owner to know what behaviours or actions might have occurred from that time to the merger date

It is hard to overstate the importance for an owner during a merger of knowing their new employees and information relevant to their professional lives. The employees represent the company and brand to the clients, prospects and the public at large, while also handling important internal resources. Trusting that the employees are honourable and honest is at the heart of this relationship and background screening helps achieve this peace of mind. A bad hire who is still employed at a company can lead to a loss of productivity, workplace safety issues and co-worker dissatisfaction. This, in turn, affects a company’s bottom line as the average cost of replacing an employee is between 16% and 20% of the employee’s annual salary.

What is Re-Screening?

Re-screening is the process of performing background checks on current employees in any industry ranging from educational organisations to large corporate firms to small businesses. There is a misconception that background screening is one-and-done for businesses. A current employee can engage in illegal behaviour even if they don’t have a previous criminal record, which then would not only affect the individuals involved but the company brand as well.

Organisations large and small put a strong emphasis on keeping their workplaces safe through background screening potential hires.  According to the Sterling’s Background Screening Trends and Best Practices Report 2016, 58% of companies surveyed currently conduct background screening checks. There are a variety of reasons why a company performs pre-hire screening checks including improving the quality of hire (59%), providing a good company reputation (53%) and enhancing safety and security in the workplace (50%).

What Checks Should Be Re-Screened?

Employees are technically “new” when their company has been acquired or merged with another company. In order to protect themselves from potential compliance issues, companies should apply a consistent employment background screening programme throughout the acquired and current employee population. Employers will need to decide what screening checks should be run on their employees. This will depend on the job position and on what the previous company already ran during the hiring process. The most popular background checks to be re-conducted are criminal record checks. Employment verifications and educational verifications usually don’t have to be rescreened as the information has already been verified by the original hiring company.

Compliant Employment Paperwork

Companies who have not implemented an employee re-screening programme after a merger or acquisition should take an in-depth look at their business’ safety needs to determine the value they would receive from implementing such a programme. From identifying the best candidates to maintaining compliance, it’s good to get a plan in place to understand the reasons screening matters to your organisation. Learn the importance of background screening to ensure a company hires the right people while also protecting their current staff, customers and business by downloading our white paper, “Screen Now, Save Later.”

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.