Every business leader and executive should understand what an HR Audit is. An HR Audit is a method used to review the company’s current human resources policies, procedures, documentation and employee management systems. This review identifies areas in need of improvement, as well as areas that pose compliance issues. The answers gathered from the audit affect employee satisfaction, engagement and morale – which ultimately affect the company’s bottom line.
Whether your company’s internal HR Manager conducts the HR Audit, or if your company utilizes a Human Resources Consultant, make sure your audit focuses on the following areas (a basic overview – not a comprehensive list of questions):
Operations
Reviews the organization’s vision, values, mission, etc. and how this is communicated with the employees. Also reviews how the company identifies/defines it’s workweeks, shifts, full-time and part-time employees, confidentiality and more.
Hiring
A review of the company’s overall hiring process including job descriptions, documentation of new hires, orientation/on-boarding programs, etc.
Compensation & Benefits
Reviews compliancy with FLMA, FLSA and other laws, pay structures, benefits administration and more.
Employee Relations
A review of the company’s employee management systems, communication with employees, etc.
Safety, Security and Worker’s Compensation
A review of the company safety policies, OSHA compliance, training, etc.
Record keeping and other documentation
Focuses on employee documentation and personnel files.
Further areas of review tailored to your industry.
We recommend that companies perform an HR audit annually in order to be proactive in continuous improvement and assure compliancy, which can add an extra layer of protection in potential lawsuits, claims, etc. Small businesses especially benefit from an annual HR Audit. It assures that they are on the right track as the company grows and adds more staff.
Have questions about conducting an HR Audit for your company? Contact us today!