A Human Resource Audit Checklist (or HR Audit) is a systematic process for evaluating existing human resources practices, processes, reports, and systems to see if all is as it should be to protect the company from lawsuits. This systematic analysis helps identify needs to strengthen and enhance the HR role. It also assists in determining compliance with ever-changing laws and rules. An Audit includes evaluating all facets of human resources regularly, usually in a checklist format.
These include:
A properly conducted audit will identify areas of concern and include feedback and suggestions for remedying potential problems. Some of the grounds for doing such a study include:
Human resource audits are a critical way of eliminating legal and regulatory liability arising from the HR policies and practices of a company. An HR audit essentially includes discovering issues and finding solutions to problems before they become unmanageable.
The scope of the HR role involves defining and implementing a number of policies and practices-many of which include compliance implications-that significantly influence the competitiveness and profitability of the company.
An HR compliance audit consists typically of two key components:
An overview of the organization’s organizational HR strategies, procedures and processes that concentrate on essential aspects of HR department delivery (e.g., recruitment — internal and external, retention of staff, compensation, benefits to workers, performance management, and employee relations, training, and growth.
A summary of current HR indicators ( e.g., number of vacancies, time taken to fill a new job, turnover, employee satisfaction, internal grievances lodged, number of legal complaints, rate of absenteeism).
An HR audit may be designed to be either detailed or based narrowly on time, budgets, and personnel. There are various types of audits, and each is intended to achieve different goals.
Some of the most common ones include:
Most lawsuits can be traced to recruiting, performance management, disciplinary or termination problems.
Some additional areas of risk which employers should carefully evaluate in an audit include:
Most organizations would not want to go through this process more than once a year, given the resources required. However, mini-audits allow for some correction to be performed approximately every six months without too much discomfort. It is better to schedule annual checkups and maintain a routine evaluation discipline over only periodic or emergency audits (e.g., those that occur when a possible problem is brewing).
Another technique is to perform an audit for any major event ( e.g., new plans or changes to the management).
HR specialists within the company may execute an in-house audit if they have the experience. However, whether the audit is carried out with internal resources or also by an independent contractor who is not a lawyer, anything relevant to the audit is subject to disclosure in work practices litigation.
It is recommended, however, that the company follow fairly strict audit procedures and guidelines and consider recruiting legal counsel from outside to perform the audit.
Make sure your company is safe from possible litigation due to faulty HR systems.
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