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Category Archives for Best Business Practices

HR Audits

The Evolution of HR Audits

Evolution is a process of change. In recent years we have seen a significant change in the HR auditing process, in the value derived from HR auditing, and in the HR audit tools used. HR audits have evolved from a simple checklist of dos and don’ts or periodic affirmative action plans to a comprehensive, sustainable process that: 1) is an integral part of the organization’s internal controls, due diligence, and risk management; 2) is a fundamental activity of strategic and operational management; and 3) uses sophisticated auditing products and consulting services. Increasingly HR audits are conducted of HR rather than by HR. This paper reviews the change in HR audits, discusses the external and internal forces affecting the process and use of HR audits, and provides information about the leading HR auditing process.

Overview of HR Audits

The HR auditing process is — or should be — an independent, objective, and systematic evaluation that provides assurance that: 1) compliance and governance requirements are being met; 2) business and talent management objectives are being achieved; 3) human resource management risks are fully identified, assessed, and managed; and 4) the
organization’s human capital adds value. Under this definition, HR audits are more than an audit activity that solely collects and presents evidence of compliance. HR audits are increasingly expected to look behind and beyond the organization’s assertions of sound and proper HR management practices and to assess the assumptions being made, to benchmark the organization’s processes and practices, and to provide the necessary consultative services that help the organization achieve its business goals and objectives.

External and Internal Forces

Numerous external forces and factors have had an impact on the demand for and scope of HR audits. First, in the global economy, human capital is becoming the single most important determinant of competitiveness, productivity, sustainability, and profitability.

Increasingly, the organization’s human capital is being recognized as the source of innovation and a driver of business success. Thus, to be effective in the global economy, HR audits must be diagnostic, predictive, and action oriented.

Second, a confluence of economic, political, and social factors, including corporate scandals, the failure of the financial industry to adequately assess risks, and increasing stockholder initiatives, have resulted in increased statutory and regulatory requirements, a call for greater transparency, and increased internal and external audit activity. Consider:

1) Sarbanes-Oxley requires effective internal controls. While Sarbanes-Oxley specifically requires effective internal financial controls, the financial and organizational costs of employment related claims and litigation can have a material effect on an organization’s bottom line, can have a negative impact on earnings per share and the organization’s valuation, and because employment litigation can negatively affect the organization’s employment brand, can impact the organization’s long-term sustainability.

2) Securities and Exchange Commission Guidelines require management to
“…exercise reasonable management oversight.” If human capital is one of the organization’s most important assets ─ it is certainly one of the organization’s largest expenses ─ is it not reasonable to expect that management applies the same level of oversight and due diligence to the management of the organization’s human capital as it does to the management of the organization’s other assets.

3) The U.S. Federal Sentencing Guidelines require that management demonstrate that it took reasonable steps to engender an organizational culture of compliance and to “monitor and audit” compliance activities, behaviors, and results. Ethical conduct and legal compliance, including nondiscriminatory employment practices, are achieved by management setting “the tone at the top.” Audits ─ including HR audits ─ provide the C-suite and boards of directors with important feedback about how effectively they are communicating this message.

4) Governmental agencies are attacking systemic noncompliance. The EEOC strongly encourages employers to conduct comprehensive HR audits as a tool to ensure that systemic discrimination does not exist. The OFCCP considers self-assessments a “best practice” and has issued its final voluntary guidelines for self-evaluation of compensation practices. The U.S. DOL considers wage and hour self-audits as a valuable tool in ensuring compliance, and the Department of Homeland Security (DHS) and immigration attorneys encourage employers to self-audit their I-9s and hiring processes and practices to ensure compliance with U.S. immigration laws.

5) Venture capitalists, investors, and stockholders are scrutinizing organizations’ human resource management practices, processes, and outcomes and using HR audits to help them properly valuate an organization’s human capital asset, expose liabilities, and perform due diligence.

6) Recognizing the importance of the organization’s human capital asset and the risks associated with misaligned, mismanaged, and unlawful employment practices, internal auditors and risk managers are assuming a leadership role in developing HR auditing standards and in designing and conducting HR audits.

Designing and Conducting HR Audits

While an organization’s size, industry, financial health, commitment to becoming a “best place to work,” and business objectives and imperatives affect the scope and urgency of the HR audit process, we have noted some common features, attributes, and objectives in HR audits recently conducted.

1) HR audits are becoming increasingly complex and multi-dimensional. While ensuring compliance is still a basic goal of HR audits, other objectives
include:

A. Ensuring the alignment of HR management and employment practices
with the organization’s business objectives.

B. Assessing the outcomes of the organization’s employment processes,
policies, practices, and procedures.

C. Developing the right human capital measurements and HR metrics to
allow the organization to calculate and measure the value added by human
resources, to determine the ROI and the return on the human capital asset, to measure the outcomes of employment policies and practices and the
achievement of EEO and diversity goals, and to benchmark best practices.

D. Ensuring due diligence, including: uncovering hidden liabilities and assets, identifying vulnerabilities to be corrected, and identifying opportunities to be attacked.

E. Developing HR auditing procedures that become an ongoing and
sustainable element of the organization’s internal controls.

F. Assessing and managing employment related fraud.

G. Developing HR auditing procedures that become an ongoing and
sustainable element of the organization’s risk management program.

2) HR audit reports are increasingly being used to report audit findings to wider audience. The distribution of the report on HR auditing findings is no longer limited to senior management. As noted above, an increasing number of third parties are expressing interest in the organization’s human resources management.

This list of external stakeholders includes not only investors, major stockholders, and venture capitalists, but also governmental agencies, NGO’s, civil rights groups, and plaintiff attorneys. Since HR audits findings include proprietary and confidential information and, in many cases, produce discoverable information, the implications of non-management stakeholders reviewing HR audit finding are significant and create a potentially serious problem for organizations. As a result, organizations are spending more time considering the format, content, and the
impressions created by their HR audit reports.

The Five Critical Components of the HR Audit Process

Recognized as setting the standard in HR auditing, the new edition of the ELLA®, the Employment-Labor Law Audit™, the leading HR auditing tool, incorporates the five critical components of an HR audit into the HR audit process. These five critical components, which should be addressed in every HR audit, are shown and discussed below in the HR Audit Model™.

1) Activities: The starting point of the HR auditing process is a review of
the organization’s activities, that is, the tasks and actions that create or implement employment policies, practices, procedures, and programs. Activities include such actions as the promulgation of an EEO policy statement, a sexual harassment policy, and other employment policies, and the posting of required employment posters. The Activities component of HR audits is typically evaluated by using a“checklist approach,” that is, the item is checked off when it is completed.

2) Behaviors: Behaviors in this context are actions and conduct that affect ─ either positively or negatively ─ the implementation or effectiveness of the organization’s policies, practices, procedures, and programs and demonstrate the organization’s commitment to stated goals and objectives. Examples of Behaviors include: the creation of a corporate culture that values and promotes equal employment opportunities, diversity, and compliance; the visible and unequivocal support by senior management for the organization’s diversity efforts; and the budgeting of sufficient resources to achieve EEO compliance and diversity goals. Behaviors are frequently assessed using qualitative measures, such as culture scan and employee satisfaction surveys.

3) Risk Assessment: Risk assessment is the identification of current and/or
future events that have the potential to cause loss, peril, or vulnerabilities, and management’s willingness to accept those risks. Risk assessment is also the identification of events or conditions that create new opportunities for the organization to achieve its business objectives.

Risk assessment provides management with the information to make an informed decision about the allocation of the organization’s human, physical, and financial capital and about effective ways to eliminate, mitigate, control, or transfer those risks.

Human resource management and employment practices liability related risks include: employment law and regulation compliance failures; lost business opportunities due to the failure to attract, hire, and retain top talent; intangible asset losses due to turnover and the loss of top talent and key employees; ineffective staff development and succession planning; and lower profitability due to the inability to control labor costs.

HR auditing activities include assessments of the external and internal factors that impact human resource management and employment practices, including: 1) the economy; 2) legal, regulatory, and litigation trends; and 3) demographic and structural changes in the workplace and work force.

4) Internal Controls: Internal controls are processes, tests, and assessments that help ensure compliance, manage risks, identify fraud, and help ensure the achievement of organizational goals. HR auditing activities include: 1) assessments of the effectiveness and efficiency of HR management processes, policies, practices, and procedures; 2) the reliability and accuracy of HR management reporting; and 3) the level of compliance with laws and regulations, industry and professional standards, codes of conduct and ethics, organizational policies, and budgets.

5) Outcomes: Outcomes are quantitative and qualitative measurements and metrics that measure and help assess the achievement of organizational goals and objectives. HR auditing activity includes the identification of metrics used by the organization to measure organizational and individual performance; the assessment of results by comparing actual results against projected results, budgets, and internal and external standards; and a description of the activities, behaviors, and internal controls that are needed to maintain or improve future results.

The value of the HR Audit Model™ is that it helps organizations: 1) assess current HR management and employment practices; 2) identify and diagnosis systemic problems; 3) evaluate and predict the impact of corrective measures; 4) develop a plan of action; and 5) determine the ROI of such actions. Using the ELLA®, organizations enhance the value of their human capital, reduce their exposure to employment-related liabilities, and
improve their ability to achieve business objectives.

Laurdan Associates, Inc., is a human resources management consulting firm specializing in HR audits, employment practices liability risk management, HR metrics and benchmarking, strategic HR, and unemployment insurance cost management. Laurdan is the developer the Employment-Labor Law Audit™ (ELLA®), the nation’s leading HR auditing and employment practices liability risk assessment tool — now in the tenth edition. For more information, contact Ronald Adler, President-CEO, Laurdan Associates, Inc., 301-762 -5794, radler@laurdan.comwww.laurdan.com


5 Ways You Can Drive a Culture of Engagement

A Culture of Engagement: 5 Ways the Best Employers Create an Engaged Workforce

Concerning results from Gallup’s State of the Global Workplace report suggest that just 13 percent of global employees are fully engaged with their jobs. Additional research from Gallup indicates that absense of a culture of engagement costs the United States an annual $550 billion in lost productivity. The good news? It’s possible to develop a culture of engagement, as indicated below:

1. Run a Purpose-Driven Organization

Employees feel more engaged when they believe that their efforts actually make a difference. Hence, the greater satisfaction among employees at organizations that identify as purpose-driven. According to Path to Purpose author Bill Damon, to be purpose-driven means to possess a “long-term, forward-looking intention to accomplish aims that are…of consequence to the world beyond the self.” Research from Deloitte Insights points to a higher employee retention rate at mission-driven companies with a culture of engagement.

2. Give Employees a Say to Create a Culture of Engagement

Employees at all levels want to feel as if they have a voice. They appreciate corporate leaders who regularly seek their input — and actually consider or even act on their suggestions. The first step to creating a culture of engagement? Increasing the frequency of employee surveys and infusing them with open-ended questions that go beyond the usual multiple-choice format.

Create Engaged Employees With These Three Easy Tips

3. Recognize Employees Who Go Above And Beyond

From gift cards to social media shout-outs, employees crave recognition. High-performing employees push harder if they expect their efforts to be rewarded. According to a TjInsite poll, 35 percent of employees regard lack of recognition as the greatest roadblock to productivity. Recognition doesn’t always have to involve singling out select employees; entire teams may prove more productive if recognized or rewarded for their communal achievements.

4. Hold Managers Accountable To Create More Employee Engagement

Managers play a critical role in keeping employees motivated and keeping employee engagement high. Management expert Victor Lipman firmly believes that people quit managers, not jobs. The most effective managers understand the value of not only short-term productivity but also long-term employee engagement.

Providing leaders with the tools they need to improve engagement is a simple matter of training. Look for interactive programs designed to create better leaders with a wide variety of thought-provoking topics.

5. Provide Regular, Meaningful Training

Employees want to work for companies that have a culture of engagement and that are invested in their long-term growth. This means training not only with the intent of improving current job performance, but also in hopes of developing skills that will help employees make progress on their desired career trajectory. Training should equip employees with the skills needed to achieve challenging, yet manageable workplace goals. This, in turn, drives greater job satisfaction, and ultimately, an engaged workforce. Employee engagement is critical to productivity and innovation — and should therefore be a priority at organizations of all sizes and in all industries. A concerted effort to improve engagement could produce a satisfied, high-achieving workforce made up of individuals who firmly believe in your company’s mission.

Ready to get started? Begin with a powerful new employee orientation video, designed to introduce your company’s culture and values. By welcoming your new hires in the right way, you can reduce turnover, improve morale and succeed at creating a UnionProof culture.

5 Great Ideas for your Employee Onboarding Video

What makes an outstanding employee onboarding video? Of course, the content is vital – you want to make sure your new hires get inspired and confirm that their decision to come on board was a great one. But what makes your orientation video really memorable and impactful? Is it a great customer testimonial? A strong narrative? Good production values? The truth is, it’s all of the above. Here are five examples of killer onboarding videos that optimize employee orientation.

 

1. Dunkin’ Donuts Onboarding Video

Dunkin’ Donuts doesn’t rely on fancy graphics to get their message across. This simple onboarding video features franchise owner Scott Fanning, who introduces the Dunkin’ Donuts brand and explains to viewers what it’s really like to work for the company.

The video then incorporates reconstructions of several common customer service situations that new hires will find soon themselves in — serving food, communicating with customers, handling payments, etc.

2. Trivago

Travel comparison website Trivago introduces viewers to its company culture with a behind-the-scenes look at its headquarters in Dusseldorf, Germany. This documentary-style onboarding video features a “day in the life” of new hires on their first day on the job. Essentially, new hires are watching new hires as they interact with each other and integrate into the company culture. Pieces-to-camera from members of staff punctuate the documentary footage.

3. U.S. Environmental Protection Agency

The United States Environmental Protection Agency (EPA) uses a combination of on-screen graphics and pieces-to-camera to illustrate its values, objectives, and company culture. Clocking in at over seven minutes, this is one of the longest onboarding videos on this list, but it maintains the attention of viewers by explaining complicated concepts and legislation in an engaging manner.

The video is actually split into two parts: The first half explains why new hires should be proud to work for the organization, while the second half details how the agency operates.

4. Innocom Technologies

Now for something completely different. Singapore-based software solution company Innocom Technologies has created an employee onboarding video that uses animation throughout. This colorful, creative clip features several animated slides that tell viewers about the company’s long-term strategic goals.

Innocom Technologies starts by declaring their company mission before introducing the current solutions they have incorporated into their business. Animated characters appear on screen as the company presents important information about its structure, core team, and core values. The video ends by asking viewers to contact a member of staff if they have any questions.

New Hire Orientation

5. Waste Management Services, City of Edmonton

This onboarding video from the City of Edmonton covers a day in the life of their waste management department. With high production values, the video introduces new hires to the department’s various members of staff. It tells viewers what Waste Management Services does and what it plans to do in the future.

A narrator engages with the audience and speaks to them directly as if she were in the training room. “You’ll find out why waste staff go home at the end of each day and feel good about what they do. And soon, so will you.” With this onboarding video, the City of Edmonton has done the unthinkable. They’ve managed to make waste management exciting.

Pieces-to-camera, animation, voiceovers, graphics –the organizations above use various filming and editing techniques to introduce new hires to their company culture. These organizations all have one thing in common: They don’t skimp on production values.

Remember, your employee onboarding video could be the most crucial component of your orientation process and set the tone for an employee’s entire tenure. This is why you need to hire an experienced, professional employee communication company to produce a video that’s as good as any on this list.

Twitter for HR

To Tweet or Not To Tweet: Twitter for HR Pros

Twitter for HR. Seems like something we should have already conquered, but the truth is, knowing exactly which 280 characters will attract the best talent to our organizations is a tall order.

Today’s job seeker can afford to be highly selective. Those with exceptional skills are often looking for a new position while continuing in their current one. With risk low, job candidates can take the time to research any company they’re considering thoroughly – and yes, that includes following the Company on social media.

More than70% of employers now use social media as a research resource to find out more information about job candidates, and at least 62% of millennials visit company social media sites to look for job openings. Twitter, in particular, can be useful when disseminating information and generating awareness about open positions. However, at the same time, it can also be challenging to use Twitter for HR the right way.

These Twitter for HR tips will ensure you use social media in a way that helps build your brand and establish your Company as an employer of choice:

Tweet about Job Openings

The most straightforward way you can use Twitter for HR is to tweet job openings. Create a unique hashtag (e.g., #companyhiring), then make sure you include it with all job openings. Use relevant global hashtags that will draw in job seekers who aren’t already familiar with your company. Include #JobListing, #JobOpening or hashtags about your geographic area or industry. Hashtags about your jobs will help attract people who are using Twitter to look for open positions.

Use the #HireFriday Feed

#HireFriday is a popular Twitter feed that job seekers often follow. Tweet on Fridays with the hashtag #HireFriday to help your open positions get more exposure at the end of each week.

Stick to Your Brand Identity

To truly have a reputation as an employer of choice, always maintain your company’s voice and tone. Include Tweets that reflect the company’s vision, mission, and values. (In fact, those make great tweets all by themselves!) Make sure that your Twitter account helps to solidify your brand image–not detract from it. When in doubt, reflect on the company’s stated values.

Avoid Controversy When Using Twitter for HR

Actively avoid questionable activity on Twitter. Having a cautionary mindset means you should avoid engaging in anything political or religious (including following public figures, liking or retweeting polarizing posts, and posting anything controversial yourself). Keep Tweets strictly about your company to ensure you don’t alienate outstanding job candidates.

With the proliferation of technology today, HR professionals have a bounty of resources at their fingertips that can help them recruit and reach the best candidates for open positions. One of them is Twitter. By understanding how to use the platform and what pitfalls you can avoid, you can ensure that using Twitter for HR will help you do your job more effectively and efficiently and that you reach just the right audience.

Attract talented employees

Three Ways Predictive Analytics Is Disrupting HR

Today, predictive analytics is having an impact on nearly every field, including human resources. Predictive analytics has broken out of the pure-play tech sectors and now has real applications that can help transform businesses and productivity.

HR departments perform some of the most critical functions in an organization such as talent acquisition, performance and productivity mapping, and upskilling. The power of predictive analytics brings the facet of predictable, quantifiable outcomes to an area that has frequently relied upon human intuition.

Here are three key ways that predictive analytics is impacting human resources.

1. Talent Acquisition

Talented employees are a must for a successful organization. Yet, this is just a beginning. Businesses need experience, skills, and good corporate cultural fit. This last element is hard to quantify, but just as necessary as the other aspects.

Predictive analytics is having a positive influence on even conventional areas of talent acquisition such as background checks and outlining strategies. Advanced technology is enabling organizations to easily extract these crucial insights from the massive mountains of data now available.

2. Boosting Performance and Improving Productivity

Once you have acquired and onboarded the ideal employee, HR must ensure maximum performance for the company. Managers can now use analytics to hone in on key factors of performance, progress, errors, and successes. The aggregated data offers important, actionable insights.

In addition, when objective data is shared with employees, individual performance and productivity tend to improve, as ownership of the numbers increases. On the other side of that coin, it is much easier to address performance problems when objective factors are available.

3. Upskilling Your Workforce

Even government agencies are using the predictive analytics model for workforce strategy. This model enables managers to pinpoint gaps in skills, thereby giving HR more information about what skills to seek in new hires. Retention goes up and turnover goes down, while the team as a whole becomes stronger.

This type of strategy takes into account several factors depending on the organization, such as macro- and micro-economic variables which relate to the supply and demand for specific skills in an industry.

In addition, this strategizing is applicable to SMEs as well as enterprise-level organizations. The ability to identify gaps and fill them quickly to maintain optimum performance is a goal in any business.

Real-World Application of Predictive Analytics

Electronics and appliances retailer Best Buy uses HR predictive analytics to assess the impact of  employee engagement on store profitability. Best Buy’s HR team found that just a one-tenth of one percent increase in employee engagement results in an increase of over $100,000 in the store’s annual income. The results of that particular predictive analytics helped the Best Buy HR team decide to conduct four engagement surveys each year, rather than just one.

You might already be using predictive analytics without even realizing it. Do you review prospective candidates’ Facebook profiles prior to hiring? As far back as 2012, a study revealed that it is possible to predict someone’s personality and future work performance based data contained in their Facebook profile.

Of course, predictive analytics will never replace human intuition, but it can provide an objective, accurate, and quantitative foundation on which HR managers can base their predictions and forward-thinking decisions.

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