The HR function often has broad responsibility for a many functions. Most HR managers have a specialty in one or two areas but have limited knowledge of others. A well-performed and presented Human Resources Audit can serve as a resource to the HR provider.
A Human Resources Audit is a systematic process of examining an organization’s HR functions including policies, procedures, requirements, practices, documentation and systems. Some common areas examined in an audit include communication, recruitment practices, employment documentation, compensation practices and systems, benefits, performance management, employee separation procedures, safety, and federal and state legal compliance. Organizations should be advised that no audit is ever fully-inclusive and there may be additional areas that need to be reviewed based on their organization’s design.
An HR Audit is most useful when an organization is ready to examine their practices and make changes to address identified issues. It is a diagnostic tool, used to identify what is working well, what is in need of improvement, or what is missing.
Given our litigious society and the fines at risk when businesses do not comply with federal and state labor and employment laws, a Human Resources Audit is one way to ensure compliance. It is commonly used by business owners, boards of directors, and corporate legal services to fulfill their fiduciary duty.
Audits may be conducted by internal staff from another department or by utilizing a consultant. It is always recommended that an unbiased third party complete the audit. Results are reported not only to the HR staff, but also to whoever makes the request, such as a business owner.
Once completed, an audit will help shape direction for the department. It’s important to note that an audit does not indicate how to address the issues. Whether to address the identified issues and how to remedy them is a choice made by the organization.
Blog Authored by: Jeanne Hines, SPHR