Leaving no box unchecked for the smoothest transition

Carrington Day is also skilled at a business tool that is under-utilized. In the Due Diligence process of most M&A projects, attention usually focuses on the financial and the technical aspects of the target company. But very rarely is there an assessment of the HR dimensions. Yet, in many M&A deals, the success or failure often comes down to the platform that is built on the people. The proper assessment of this HR component, especially in identifying cultural risks, can be invaluable.

This can be a particularly valuable service for Chinese firms as they seek to invest in international businesses where the business cultural environment is much different to China.

What can due diligence involve?

Due diligence in HR refers to the process of thoroughly investigating a potential hire, employee, or company, to ensure that they meet certain standards and requirements. It is a critical component of the hiring process, as it helps companies make informed decisions and reduce risk.

Standard due diligence in HR typically includes:

1. Verifying education and employment history: Checking the accuracy of a candidate's resume, including verifying their degrees and previous employment.
2. Conducting reference checks: Contacting previous employers and colleagues to get a better understanding of a candidate's skills and work history.
3. Checking criminal records: Checking to see if a candidate has a criminal history that may impact their ability to perform their job.
4. Reviewing professional licenses: Checking to see if a candidate has any professional licenses and if they are in good standing.
5. Assessing skills and qualifications: Assessing a candidate's skills and qualifications through interviews, tests, and other evaluations to ensure they are a good fit for the role.

Going above and beyond standard due diligence in HR may include:

1. Social media checks: Reviewing a candidate's public online presence, including social media profiles and online reviews, to gain additional insight into their personal and professional reputation.
2. Drug testing: Testing a candidate for drug use, which may be necessary for certain roles, such as those requiring a commercial driver's license or working with hazardous materials.
3. Background investigations: Conducting a thorough background check, including reviewing credit reports and public records, to uncover any red flags that may impact a candidate's ability to perform their job.
4. Assessment centers: Using advanced assessment techniques, such as simulations and role-playing exercises, to get a better understanding of a candidate's skills and abilities.

In conclusion, standard due diligence in HR is essential to ensure that companies make informed hiring decisions and reduce risk, while going above and beyond can provide additional insights and increase the chances of hiring the right person for the job.