Conducting an internal audit may not top the list of things HR professionals look forward to doing, but the importance of reviewing HR practices should not be understated or ignored. Simply put, an HR audit can be the savior that keeps your company out of the court room.
Think about this: On average, there are more than 450 employment lawsuits filed each week. The most common target is private employers with between 15 and 100 employees. While you may not be able to control if somebody files the suit, are you prepared to defend the company when someone does? With plaintiff attorneys on the offensive, joined by an administration and Department of Labor sympathetic to that cause, employers need to be ready to handle whatever is thrown their way.
But the reasoning behind internal HR audits extends further than lawsuit defense, for example:
So, what exactly does an HR audit do? As with any audit, it takes a look at just what you are doing a little more closely. In this case, it measures the health of current HR practices. An HR audit will help you identify deficiencies and provide direction in the following subjects: employment practices, employment policies, employment related documentations, employment law compliance.
Bottom line: an internal HR audit is an opportunity to save the company money and avoid problems they may otherwise face. At the end of the day, an audit should help you to develop more consistent policies, treat employees more fairly, and in return the employees become more productive.
When it comes to an audit, there are two main areas of focus- compliance and best practices. Compliance looks at the legal aspects of HR and includes areas such as missing, outdated, or conflicting policies or inconsistencies between policy and practice. The practices pays attention to what is (and isn’t) working for the company including the current processes (on issues such as recruiting, discipline or terminations) and procedures (on issues such as performance or evaluations).
To get started, you will need to develop an audit team. This includes key management personnel. You want people who can give you clear input of what exactly is going on. Feedback from non-management employees is helpful, but they should not be part of a formal ‘team.’
So you have the team and are ready to go. Which areas should you look at first? I don’t know if there is a good first or second place to begin with, but there are plenty of places to get to. An HR audit should ask the following questions:
And as you move forward, remember these two rules from HR 101: document everything (juries will only believe what you have in writing) and be consistent (a policy isn’t a policy unless it’s followed every time).
Note: This information is not intended as legal advice or counsel. Please seek a qualified attorney for more information.