HR Audits

Every business venture is just steps away from becoming a great name in the market, but covering these steps is not a cakewalk. From admins to the employee, each component needs to be well managed and fulfilled in order to achieve efficiency in the workspace. Human Resource audits assist companies in accomplishing a similar task.

Audits are a detailed study of business processes. They aim at assessing the positive and negative aspects of a venture.

One such audit that is specially dedicated to monitor and review the changes required in the workspace of an organisation, is known as an HR audit..

What is an HR Audit?

The HR (Human Resource) Audit is an audit that is dedicated towards administering the Human Resources Department of a venture. It is a procedure framed to assess all the aspects of HR tasks and concerns of a company. These tasks revolve around company policies, work strategies, protocols, documentation, and office systems.

In order to ensure proper assessment of all aspects of HR, an HR Audit engages with diverse aspects of the human resource department.

To tackle, each aspect of HR audits are divided into more categories.

Some of these categories of HR audits are:

• Hiring Procedure
• Employee On-boarding
• Compensation Plan
• Benefits Package
• Performance Review
• Termination of Tenure
• Exit Interview

These HR audits formulate a significant portion of the HR processes in a corporation.

You can also read: Why HR Management System is beneficial for an Organization

Objectives of HR Audit

HR audits assist companies in numerous ways. Some of the objectives of HR audits are :

1. Assisting the HR Department to comprehend and implement changes for better functioning.
2. Surveying all data and resource issuance for human resources
3. Assuring compliance of the company’s working with the governing legislation.
4. Proposing a strong base for developments and upgrades in future

Varieties of HR Audit

Established upon the several objectives that are served by HR audits, they have many different types.

Some of the different types of HR Audit are :

Policies

Policy audits take care of the existing and future policies of the enterprise. They take care of consistency and ensure that the policies do not violate the legal guidelines.

Salary and Working Hours

Salary and working hour audits monitor the company’s salary structure with respect to the working hours for its employees. It looks after the legal factors related to salary calculations, overtime compensation and benefits.

Legal Compliance Audit

This audit monitors the strategies of the company and ensures that they lie within the outlines of the employment laws. This audit looks into the leave structure, payroll, health assistance, safety measures and HR operations of the company.

I-9 Audit

The I-9 form is a mandatory legal requirement for companies in order to verify that each of their employees has a valid employment authorization. A 1-9 Audit is responsible for monitoring this form and ensuring that it is free from all sorts of errors.

Departmental Audit

Departmental audits are specifically dedicated to a certain department in the enterprise. For example, there will be a separate departmental audit for payroll, timesheets or sales and purchase. It reviews the compliance factors for specific departments of the organisation.

Employee Training

Employee training audits administer the training and development programs of employees. It aims at enhancing the skill set of the company’s workforce by assessing the programs, catching flaws and suggesting upgraded and better programs.

Safety

A safety audit assists the company in taking care of the employee’s health. It ensures that the company takes enough measures in the workplace, to keep away all possible harms that can occur to an employee’s health.

Hiring

A hiring audit monitors the hiring process of a company. It makes sure that the company formulates a consistent, effective, reasonable and non-discriminatory hiring structure.

Benefits & Compensation Package

A benefits & compensation package audit administers the salary and benefits package provided by the company. It ensures that the package takes all legal factors like minimum wage, compensation and employee benefits into consideration.

You can also read : What is HRM?

HR Audit Checklist

There are numerous different types of HR audit as discussed earlier but it is important for the company to keep certain things in mind while implementing them.

An HR checklist can assist the company to monitor these factors while performing HR audits. Here are some of the crucial factors of the HR checklist –

Employee Records

Keeping an updated Human Resource Information System i.e. HRIS is a very essential part of managing the Audits. It allows the company to keep a record of all employees data which makes it convenient to track and search their information. This data is also important for filling the I-9 forms. Both these forms and the data must be kept properly for future requirements.

Employee Handbook

It is important to create an aware workspace. This inculcates satisfaction and work efficiency in the system. Companies must conduct annual checks on the company handbook and inform the employees about all the changes and updates. It is also important to reach out to a legal consultant and get the company guidelines and protocols cross-checked for any violations or flaws.

Compensation

Companies must check with the national pay scale and offer a salary package that is competitive enough to yield dedication and productivity from an employee. A proper understanding of increments must be developed mentioning all factors contributing to the same. Companies also need to ensure that their salary packages fall under the legal guidelines of the country.

Performance Evaluations

Companies must examine their performance appraisal tools and procedures. They need to come up with a structure that will provide a clear duration, requirements, expectations and other criteria that contribute to the evaluation process. Factors responsible for the promotion or demotion of the employees must be presented in a transparent and honest manner.

Benefits

Companies must ensure that their employees are aware of the benefits and advantages that the company is providing them. In order to create an earnest and productive workflow, companies must have a proper assessment of the market and update their benefits package to a more robust package for their employees.

Training

Companies need to propose fruitful training and development programs for their newly hired employees. Depending upon the department of employees, the training plan will also vary. In order to conduct an effective, it is important to view the condition from the employee’s point of view along with the admin’s point of view. Exploring different perspectives will provide better insight and therefore help in coming up with better plans for improvement and action.

Conclusion

An HR audit aims at creating an accurate inspection of all the policies, protocols and practices of a company. It acts as a troubleshooting tool and detects the shortcomings and errors of the system. Along with discovering these errors it also suggests the required action and inculcates efficiency in the workspace and operation of the company. It is a very significant component in the successful working of an enterprise and therefore demands adequate attention.