An internal HR audit has the same goal as any other audit: to scrutinize business operations to ensure best practices are in place and consistently applied. Of course, an HR audit is exclusively focused on HR practices, offering an opportunity to identify deficiencies in employment policies and their application, employment-related documentation, and compliance with relevant employment law. Proactively auditing HR practices is the most effective method of addressing small issues before they have a chance to take up time and money that would be better spent elsewhere.
If you haven’t conducted a full review within the last couple of years, let this guide serve as a wake-up call to making an audit part of your Engagement Plan for the coming year.
WHY DO AN AUDIT?
The job of a Human Resources, Employee Relations or Labor Relations professional is often reactive: investigating employee relations issues, responding to a compliance violation, or searching through poorly maintained records when a legal claim is made. However, it is far more satisfying to take a proactive approach and address small problems before they become major headaches. HR auditing sets businesses up for success, establishing basic HR practices. Audits systematically review whether and how policies are being applied, ensuring consistency among staff members and compliance with legal and regulatory requirements.
Other benefits of HR audits include:
• Company-wide adoption of best practices
• Identification of potential processes improvements
• Reduction of errors and employee complaints
• Proactive preparation for government investigations
• Reduced likelihood of fines for noncompliance with employment regulations
• Possible reduction in insurance expenses
• Improved utilization of legal budgets
• Increased buy-in from managers regarding HR policies and practices
• Reduced likelihood of successful union organizing
STEP-BY-STEP GUIDE TO YOUR FIRST AUDIT
Launching an HR audit is a major endeavor, and it is important to secure the appropriate resources. These subject matter experts are particularly helpful:
Legal Counsel – The results of an audit can be discoverable in future legal proceedings. Consult legal counsel for advice on protecting the business.
Department Leaders – Enlisting the help of department leaders saves time. They can point you towards the relevant records and explain how policies are applied from day to day.
Once your team is assembled, outline the areas you will audit and develop a list of audit questions. Common inquiries for HR audits include the following…