Your Policies Aren't Fit for Purpose: Here's How to Conduct an HR Audit

Organizations should always be striving to do things better, but this means being realistic about the current situation. To get an accurate picture of how a business is performing in terms of its processes and policies, nothing compares to conducting an HR audit. While it may seem painful to uncover pitfalls within your company, it’s the only way to grow meaningfully.

Aims of conducting an HR audit

Like all processes carried out within your business, it’s important to understand what you’re expecting to gain from it. That way you can ensure your work is focused on end results that make a difference. Here are some of the priorities to consider:

• Checking compliance with laws in force where the business operates
• Establishing the things that HR does well and how others can be improved
• Ensuring HR has the resources to carry out its function well
• Putting in a process that allows for internal whistleblowing
• Reassuring investors and stakeholders you’ve carried out your due diligence
• Identifying areas throughout the company that could be improved

Selecting the right audit for your business

The HR audit process can vary depending on a number of factors, so it’s worth choosing a method that will best suit your business.

1. I-9 audit

Only applicable to companies operating in the US, an I-9 audit ensures all employees have the correct authorization to work. Not only does it make sure each member of staff has filled out the form, it also ensures there are no mistakes and should establish whether further documentation will be needed in future. If you’re operating outside of the US, it’s worth identifying if an equivalent type of audit would be beneficial.

2. Policy and legal compliance audit

Auditing all of your policies is a crucial job, as it ensures consistency and that they don’t contradict each other. This type of audit is also crucial for making sure you’re working within the law. You should also use it to check that practices such as leave, disability and payroll are all in line with employment law.

3. Hiring audit

Hiring is a fundamental part of running a business and it’s worth reviewing your practices regularly to ensure you’re bringing on board top talent. Make sure your approach is not only fair and consistent amongst all candidates but also efficient and effective, otherwise you could be spending more resources than you need and not getting the best outcome.

4. Training audit

Training programs should be constantly updated to bring them in line with changes in a company and the latest industry trends. They should be evaluated to make sure they cover employee and business needs so that professional development doesn’t stall.

5. Health and safety audit

Health and safety procedures should be regularly audited to check your business is up-to-speed with best practice and that equipment is in full working order. Your duty of care to staff extends beyond the office and to any work carried out on a separate site.

Auditing techniques

There are a number of techniques that can be useful when conducting an HR audit. You may wish to have a dedicated team in house to oversee the process or invite an outside consultant or auditing agency to do the job. Either way, a thorough audit should consist of a selection of techniques:

Evaluating records

Check your record keeping processes are up-to-date and compliant with rules such as GDPR. Evaluate the data they provide to see if there are ways you could be more efficient by identifying trends or repeated problems that are holding your business back.

Distributing an HR audit questionnaire

Your staff are a key source of data and asking them to fill out an HR audit questionnaire is an effective way to get an accurate picture of your company. Include questions on:

• Absences
• Diversity
• The hiring process
• Training practices
• Overtime
• Productivity
• Employee satisfaction
• Company culture
• Areas for improvement

Preparing a report

All of the data and analysis collected during your HR audit should be collated in a report. Not only will this make your findings clear, but it will also demonstrate transparency within your business. This report should be made available to every employee and stakeholder to show an understanding of your pitfalls and areas where you’re going to target improvements.

Creating an action plan

An audit is a waste of resources if it doesn’t result in real change. Take the key points outlined in your audit report and turn them into an actionable plan. This should demonstrate what needs to change, the steps to make it happen and what the end result will look like. This plan will make a good starting point for any future audits, helping to drive your business forward.