Six Quick Steps to a Perfect HR Audit
By Kathryn Carlson, Director of HR Products
Download KPA's HR Audit Checklists:
Spring cleaning for Human Resources Managers should include an HR practices audit. Conducting an internal audit will idetify any problem areas and allow you to correct them before the auditor arrives in additional to showing “good faith” effort on your part. Good faith is an established legal principle that will limit your risk of fines and lawsuits. Good faith means you are “evincing honesty, fairness, full communication of any hidden issues or information, and an absence of intent to harm other individuals or parties to the transaction.” ~Webster's New World Law Dictionary Copyright © 2010 by Wiley Publishing, Inc., Hoboken, New Jersey.
A complete HR audit process has two main parts:
- Evaluation of all operational HR policies (recruiting hiring, performance management, training, leave management, termination, employee retention, compensation and benefits)
- A review of HR indicators (turnover, employee satisfaction, absenteeism rates, complaints and lawsuits)
If you are not quite ready to tackle a complete HR audit you can narrow the process to focus on a key area such as compliance or a specific functional area.
The process for conducting a complete or targeted audit is the same:
- Develop the audit questionnaire (a free HR compliance audit checklist is available from KPA)
- Collect and analize the data
- Benchmark results against internal and/or external measures
- Report the findings
- Create a plan to address issues
- Ensure that there is a process in place for continuous feedback and improvement.
Once the audit is complete, it is critical to implement changes and report on the results. If you have any doubt about your company's ability to address issues, consider using a consultant or purchasing software to ensure compliance. KPA's HR Management system provides a combination of expert advice and software that can help you implement and maintain best practices for HR.