A human resources (HR) audit is an audit performed by an outside human resources consultant or an employment law attorney with expert-level professional human resources credentials and a track record of function-specific auditing. Simply put, just as you audit accounting on a regular basis, audit your HR function. You need to trust that your management team and HR professional(s) are doing the job, but at the same time verification is essential.
To ensure that the company’s HR department is working smoothly, a human resources audit is the most often used tool to accurately assess this. The report produced from a human resources audit exhibits the successes achieved and the deficiencies needing correction. It is a thorough examination of a company’s current HR policies, systems, and procedures. The outcomes are a comprehensive report and a recommended action plan. Smart employers understand the value of performing an audit regularly to identify potential problems and create an action plan to resolve these – before being served with a lawsuit from a current or former employee. Typically, an audit performed once every year or every other year is the recommendation.
Large employers know the value of a human resources audit and plan for one every year. Small businesses and growing businesses benefit tremendously from human resource audits — they ensure that the company is on the right track as it grows and adds employees to its staff. Employment law attorneys recommend a comprehensive audit to evaluate compliance and examine performance. For example, a human resources audit always includes reviewing a sample of employee files. Employees’ files can reveal whether company managers are providing continuous feedback to employees and properly documenting their feedback in their employees’ files. Sometimes, management training is recommended in the areas of performance management and employee discipline documentation. Employee benefits attorneys, as well as wage and hour attorneys, recommend an audit of your HR compensation and benefits practices. Are your salaries and wages competitive for your geographic area and your industry? Is your employee benefits package competitive? A competitive audit can answer these questions.
Functional areas to audit include talent acquisition, compensation, benefits, talent development, HR information recordkeeping systems, employee relations, and employee health, safety, and security. It is important that a company (through its executive management team) should be committed to acting on the results of the audit, whether that means retaining outside counsel to perform a detailed legal review of policies, putting together internal project teams to create or update policies and procedures, designing training courses targeted to minimize risk, or writing a series of employee communications to address some of the issues discovered. Top-down support guarantees a successful audit and follow-up process.
Don’t wait until you get a lawsuit to arrange for a human resources audit. Hold your team accountable to using the process to move HR in a direction that is aligned with your mission, vision, goals, and culture. Human Resources Simplified is an experienced and full-service human resources consulting company providing clients with strategic people and team planning, recruiting, training, mentoring and facilitating using consulting and coaching. If you have staff, we have solutions. Win the game of business with our specialists. Our team is focused on serving our clients Human Resources services in Sarasota, Bradenton, Lakewood Ranch, Venice and all along the Suncoast!
Jean is a certified senior-level human resources executive/consultant, adjunct professor, management trainer, professional speaker, career coach and author.