Annual audits of human resources are necessary for all companies out there. It does not matter how many employees the business has. HR audits can be compared with the health checks that you do for your body. Organizations have to measure current standings and then determine accomplishments possible with the purpose of improving HR functions.
An HR Audit and Compliance report involves reviewing basically all HR functions. At the same time it will ensure the fact that the government company policies and regulations are respected. A failure to do this will lead to penalties and fines. You should not see audits as check-ups that are not mandatory. You have to look at them as being mandatory.
Who Will Conduct The Audit?
This is the very first thing that you have to think about. If the company has an HR staff, it can conduct the audit. Alternatively, an attorney specialized in employment law or an outside consultant can be consulted.
Individuals that handle the audits need to be really good and understand everything connected with human resources. But how to know? Firstly, if they’re holding a master of human resources management degree, then it’s a good qualifying factor in choosing the right HR auditors. Secondly, you need to focus on their track records. At the same time we need to understand that self-audit records will not have the exact same credibility that you see with audits handled by the independent sources.
What Will The HR Audit Review?
Most of the HR audits will include question series that are separated by functional area or topic. Compliance audits are not going to be finished in just one day. Touching absolutely all human resources areas will require time and it is possible that it will be needed to look at different policies and documents, all while also interviewing the current HR staff, together with different managers and employees.
The start is normally reviewing the existing procedures, policies and employee handbooks. That will quickly assess risks, needs, outdated procedures, policies and basically identify conflicts. It is easier to then highlight how the policies are affecting the business. Then, the HR audits will go through different tasks like:
- Staffing policies – reviewing the hiring and recruiting practices to reveal potential gaps.
- Employee/Compensation classification – auditing can include reviewing overtime, compensation, time records and more.
- Local, State and Federal regulations – this is important for the reason that was already highlighted above.
- Administration – audits will examine HR duties like attendance tracking, benefits administrations and even confidential files.
- Employee relations – audits include reviewing the communication process, performance measurements and discipline procedures.
Always be sure that you are going to regularly audit the HR functions with the main purpose being to mitigate risks. When significant compliance problems appear, the audit has to be structured in a way to also highlight potential solutions. In many cases you will need to work with an attorney as legal problems are very important.
Working with a professional is almost always a very good idea, whenever possible. Have patience and do be sure that you hire someone with a lot of experience. This is much more important than what you may think. Always be patient and analyze the results that were present for the clients in the past. If problems appeared, you are better off working with someone else.