Organizations are constantly evolving. But when it comes to policies and procedures, they often remain unchanged. To diminish legal issues and to ensure that your company still complies with the labor and employment laws, it is important to perform an HR audit. While this sounds daunting, it is a valuable tool that will help your company stay up to date and able to thrive. In this blogpost, we will show you how you can effectively use an HR audit. But first, let’s get a better understanding of what this assessment entails.
What is an HR Audit?
An HR audit is a thorough review of the policies, procedures, documents, and systems in Human Resources. The purpose of this audit is to provide recommendations which will help you improve operations and performance. Usually, HR professionals perform the assessment. However, companies can also choose to hire an external company to conduct the audit.
What are the Benefits?
Whether the focus lies on policies or performance, HR audits uncover problems and challenges that exist within the department. Evaluating these issues will allow your company to improve and reduces the risk of litigations. It will also have a positive effect on the employees, knowing that the company takes an active role in bettering the working conditions. These positive changes will lead to an effective way of working and an increased employee morale.
How to Perform an HR Audit?
Although there are many different ways in which companies can utilize HR audits, most assessments follow the same structure. The HR audit consists of three parts. The first step is the pre-audit. During this phase, you will have to collect data. This information can be quantitative or qualitative, depending on the point of interest. The next step is the analysis of the data. Here you will assess the relevant information such as processes, procedures, policies, documents, and data. The final step is to draft a report that contains your findings and recommendations which will help improve the Human Resources department.
Considering the time and effort that you need to invest in a full-scale assessment, it is advisable to perform one HR audit per year. When you make an assessment, you can choose to focus on the following areas:
- Training and Development
- Employee Relations
- Strategic Planning
- Best Practices
- Compliance with Laws and Regulations
Checklist to Effectively Conduct Your HR Audit
Before starting the assessment, you can create a checklist to stay organized and efficient throughout the auditing process. This list contains detailed questions that apply to the different areas of Human Resources and is typically a couple of pages long. You can break down the audit into smaller assessments by dividing the questions, which will make it easier to complete. Additionally, you can decide the format of the checklist. You can choose to answer “yes” or “no” to questions or allow a more detailed answer.