Essential Steps for Conducting a Successful HR Audit
An HR audit process reviews the policies, procedures, and systems of a firm and checks if they comply with the legal standards and the values of the company, particularly when there are some changes or growth in the workforce. It helps businesses catch any HR compliance issues and must be conducted regularly to update business practices according to changing laws.
In most cases, an HR audit will investigate compliance, policies, performance, competitiveness, and specific departmental needs. It involves setting up audit objectives, designing an audit plan, collecting and analyzing data, and implementing improvements identified as needed. In this guide, we will explain HR audit process checklist, and HR audit process steps.
What is HR Audit Process?
An HR audit process checks the HR policies, and procedures to identify if there are any areas that need some improvement. It ensures that the HR operations are up to date in terms of current laws and regulations in order to reduce risks and align HR practices with the organizational goals. An audit acts as a “report card” by the HR department on how well the functions of recruitment, onboarding, retention, payroll, and performance management contribute to organizational success.
The HR audit process not only makes sure the organization complies with rules and regulations but also corrects the processes to make them more effective and employee-friendly. This approach will improve the satisfaction of employees and the performance of an organization. Of course, it takes time and resources, but the payback is worth the wait.
When Should a Company Get an HR Audit?
A company should consider performing an HR audit process steps in the following few key situations to ensure that its policies and practices are aligned with business goals as well as with legal requirements:
Do you want to know more about our hihellohr Software?
HR Audit Process Checklist
To stay organized while doing an HR audit, many teams use a checklist of critical points to work through systematically. Here is a checklist template you can use as a good starting point for your HR audit:
Recruitment & Selection
- How is your recruitment tool working? Are changes needed?
- Are your job descriptions updated and valid?
- Are the qualifications you require applied equally to all applicants?
Hiring & Onboarding Process
- Is the ATS working correctly and is it according to your business needs?
- Are you operating a formal mentorship program for new starters? If so, is it working? If not, do you think you should have one?
- Your hiring strategies are non-discriminatory and consistent? Do they help bring in good quality?
Regulatory Compliance
- Does every practice and policy comply with relevant employment laws, for example paid time off, disability leave, family and medical leave, etc?
- Are the attendance policies up to date with current law?
- Are your health and safety policies and practices up to date with current laws, and are they enforced appropriately?
Employee Records, Data Protection & Storage
- Is your HR System working based on your business needs?
- Do personnel files have enough information? For instance, have performance review records and employee claims history been kept?
- Is employee data stored in a secure location or not?
- Have you ever protected personal health information?
Compensation & Benefits
- Are there any errors or variations in the salary profile or payroll deduction of some employees or groups of employees?
- Compliance with or exceeds the national pay scale? Competitively positioned in the market?
- Are there any salary and pay differences based on gender, disability, or race?
- Have all available benefits been communicated to staff? Are all benefits offered actually used? Are there additional benefits that should be available?
- Do you need to build in external factors in future salary/negotiations (such as inflation, economic trends, etc.)?
What Are the HR Audit Process Steps?
An HR audit can be an extremely large project and may require teams to commit enough time and resources in order to really understand areas where opportunity exists across the function. Breaking up an HR audit into smaller, workable milestones helps a function make progress toward that final end goal. The 7 HR audit process steps we suggest taking in your HR audit:
