A human resources audit evaluates several functions of the HR department. An audit is more than just looking at personnel files to make sure they're complete and consistent with federal and state laws pertaining to employment practices. An audit also requires that you look at overall HR departmental functions for assurance that human resources is supporting the company philosophy, mission and values. Auditing HR functions such as employee relations, safety and risk management, compensation and benefits, and recruitment and selection is very important.
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The employee relations area of human resources is typically responsible for addressing employee concerns, designing and analysing employee opinion surveys, assisting HR leadership with monitoring the performance management system, and representing the company in matters involving claims pertaining to unemployment compensation and unfair employment practices. An audit of these functions includes reviewing the level of employee satisfaction. Employee satisfaction can be measured by turnover rates, number of employee complaints filed and resolved, the status of action plans from recent employee opinion surveys, and the effectiveness of your performance management system.
Safety and Risk Management
The goal of your HR department's safety and risk management program is to create and maintain a safe work environment. Auditing your safety and risk management function goes beyond merely assessing your adherence to federal Occupational Safety & Health Administration (OSHA) regulations, however. It includes assessing employee participation in maintaining a safe work environment, measuring the effectiveness of your safety training to reduce the number of workplace injuries, and providing training related to workplace violence, actions of disgruntled employees and civil unrest.
Compensation and Benefits
Auditing compensation and benefits begins with an analysis of your compensation practices -- review the employee census to be sure your pay practices are appropriate for each job group, as competitive as possible for your geographic area and your industry, and, importantly, your pay practices must be fair. Legislation concerning fair pay - the Lilly Ledbetter Fair Pay Act of 2009 - was a wakeup call for employers to look closely at their pay practices. Auditing your compensation plans takes time to complete; based on the size of your workforce, this part of your HR audit may be more effectively outsourced than conducting the analyses in-house.
Recruitment and Selection
Your organisation's recruitment and selection process shapes part of your company's reputation. Auditing your human resources employment function involves a review of the way applicants are received. If you rely solely on an applicant tracking system with very little personal contact, measure its effectiveness. An audit should reveal how knowledgeable your employment specialists are concerning organizational structure, positions within each department, and fair employment practices in recruiting and hiring candidates.
HR Departmental Practices
In addition to auditing specific areas of your human resources department, review the HR function in its totality and in relationship to other departments. "Compliance Week" contributor HR consultant Jose' Tabuena notes: " In addition to public scrutiny, ineffective HR programs can undermine an organisation's ability to achieve its mission by stunting its competitiveness in the labour market, increasing unjustified financial costs, and putting the organisation at risk for lawsuits or regulatory inquiries due to non-compliance or misconduct." Audit your HR department function for its in-house effectiveness and as an ambassador for your organisation throughout the community you serve.
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