ok this is how i did it
use a helper column and a vlookup formula back at sheet 2
=IF(VLOOKUP($G$11,Sheet2!$A$2:$A$8,1,FALSE)=A8,"found","")
so if employees name is found on sheet 2 this formula returns found on the
same row as the emplyees name
conditional formatting for this row is
=c8="found"
i had to change the formatting formula for each row,hopefully there is an
easy way!

In Sheet2,
assume the employee numbers would be listed within B1:B200 (say)

In Sheet1,
assume the employee numbers are listed in A1 down
Select col A (A1 active)
Click Format > Conditional Formatting, then apply in Condition 1:
Formula is:
=SUMPRODUCT((ISNUMBER(SEARCH(A1,INDIRECT("Sheet2!$B$1:$B$200")))*(A1<>"")))
Format it as, eg: Red fill & white font, bolded

The above will achieve what you're after, ie highlight all employee numbers
in col A which are found within Sheet2's B1:B200. Adapt the range to suit ..

Conditional formatting wont allow you to reference another worksheet,
however, as a work around you could add a column and paste in the
formula

=NOT(ISERROR(VLOOKUP(A1,Sheet2!A1:A7,1,FALSE)))

Where cell A1 contains the employee number and Sheet2!A1:A7 contains
the employee numbers on the other sheet.  This formula will return TRUE
if the employee is on the other sheet and FALSE if it is not.  You can
then hide this column if you want and use the result in your
conditional formatting by highlighting the range you want to
conditionally format and for the first record say you put the formula
above in column D you would select Formula and type in =$D1 and select
the red font format.