HR Audit Tools

Written by diane chinn | 13/05/2017
HR Audit Tools
An HR audit examines the current state of an organisation's human resources operations (Chart analysis image by Dmitriy Lesnyak from

A human resources (HR) audit is an objective look at the current state of an organisation's human resource's operations and strategies. A business may conduct an HR audit for a variety of reasons, including ensuring compliance with federal and state employment law; establishing a baseline for process improvement efforts; evaluating the knowledge and skill levels of HR staff; and to standardise processes. (See Reference 1)

Although some organisations may have an internal audit department, it is best to have the audit done by an outside HR auditing firm. This ensures that the audit is fair and objective. After all, the internal audit department is served by the Human Resources Department.

Pre-audit Information Collection and Review

HR Audit Tools
Auditors collect and review policy and procedure manuals and other information. (Three binder books isolated on the white image by Elnur from

Before an HR audit can begin, various documents must be collected and reviewed, including HR policy and procedure manuals, forms, employee handbooks, union contracts, turnover reports and other documents related to HR operations and compliance with federal and state employment law. The HR auditors use these materials in the audit process.

Pre-audit Self Assessment

HR Audit Tools
HR and other organisation leaders complete self assessments as part of the audit process (taking test image by Petro Feketa from

Many HR auditing firms ask HR and other organisation leaders to complete a self assessment. Generally, it is a questionnaire that includes yes/no and Likert scale questions; for example, "The hiring process is timely. (1 = Never, 5 = Always)." The self assessment helps auditors understand how an organisation's HR department is perceived by other areas of the business, as well as how HR perceives itself. These self assessments help auditors identify areas on which to focus in the on-site review. (See Reference 2)

On-site Review

HR Audit Tools
Auditors conduct in-depth interviews with HR staff and managers (business hands image by vb_photo from

HR auditors visit the organisation to conduct in-depth interviews in areas such as hiring and staffing, compensation and benefits, communication, employee education, succession planning, employee relations and leadership development. Typically, the auditors use a detailed checklist that includes all employment and labour laws and regulations that govern HR operations to identify any legal compliance issues.

Records Review

HR Audit Tools
HR audits include review of records cush as pay and benefit reports (file image by Byron Moore from

As part of the on-site review, auditors randomly select and examine a sample of records such as employee personnel files, pay and benefit records, employee complaints, disciplinary action, health, safety and other relevant records. They determine if the records are complete, accurate and timely. (See Reference 3)

Audit Report

HR Audit Tools
The HR audit report includes both strengths and areas for improvement. (business report image by Christopher Hall from

Once all the documents have been reviewed, the interviews conducted and the data analysed, the auditors prepare a report that summarises their findings, points out strengths and identifies areas for improvement. Improvement areas are ranked depending on their importance. Urgent problems must be addressed and resolved immediately in order to meet federal and state employment laws and regulations.

Important problems, such as changes to a performance review policy, should be addressed sooner rather than later in order to prevent conflicts or misunderstanding in the organisation. Other items in the audit report may be ranked as opportunities. These are areas that are basically in compliance and procedurally fair but could be improved.

In addition, the audit report includes references to various applicable laws, research and court cases to support its recommendations.

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