Human Resource

Human Resources Audit

A Human Resources Audit is a comprehensive method (or means) to review current human resources policies, procedures, documentation and systems to identify needs for improvement and enhancement of the human resources functionto ensure compliance with ever-changing rules and regulations, as well. An Audit involves systematically reviewing all aspects of human resources, usually in a checklist fashion.

It is expected to review:

• Hiring and Orientation
• Benefits
• Compensation
• Performance evaluation process
• Termination process and exit interviews
• Job descriptions
• Form review
• Personnel file review

The purpose of an HR Audit is to recognize strengths and identify any needs for improvementinthe human resources function. A properly executed Audit will reveal problem areas and providerecommendations and suggestions for the remedy of these problems. Some of the reasonstoconduct such a review include:

• Ensuring the effective utilization of the organization’s human resources,
• Reviewing compliance concerns with a myriad of administrative regulations,
• Instilling a sense of confidence in management and the human resources function,
• Maintaining or enhancing the organization’s and the department’s reputation in the community,
• Performing “due diligence” review for shareholders or potential investors/owners,
• Establishing a baseline for future improvement for the function,
An Audit can also ensure that policies and procedures are fair andconsistent across the organization and strengthen employee satisfaction. By maintaining a satisfiedand productive workforce, an employer lessens the expense associated with costly turnover of staff.

Losing one employee is estimated to cost a company 50–150% of the lost employee’s salary in timeand money spent to replace that employee.

The general process of conducting an audit includes seven key steps, each of which are discussed in greater detail below:
1. Determine the scope and type of audit.
2. Develop the audit questionnaire.
3. Collect the data.
4. Benchmark the findings.
5. Provide feedback about the results.
6. Create action plans.
7. Foster a climate of continuous improvement.

Determine the scope and type of the audit
Develop the audit questionnaire
Collect the data
Benchmark the findings
Provide feedback about the results
Create action plans
Foster a climate of continuous improvement