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The value of a Human Resources audit

The value of a Human Resources audit

By on Jun 23, 2021 in Best Practices, Blog, HR Consulting, HR Operations Audit |

We are frequently asked by clients to help them understand if they are getting the most out of their Human Resources activities and whether there are better ways to do things.  They are also interested in knowing if there are best practices they could follow to improve their outcomes. A great way to determine this is to conduct a Human Resources audit.

An HR audit is simply a review of processes and activities to ensure you are working efficiently, effectively, and in a compliant manner.

An HR audit can accomplish a couple things:

  1. Compliance: Help you determine if you are complying with all applicable laws and regulations that pertain to employment, such as the Family and Medical Leave Act, Fair Labor Standards Act, Americans with Disabilities Act, etc.
  2. Process improvement: Find ways to improved processes and enhance efficiency by carefully reviewing what HR functions are being performed, and considering alternate ways of doing things, including the use of technology.

Compliance

Employment laws change. Remember, not only federal law, but state laws, and even county and municipal laws may apply to you. It is important to ensure your employment practices stay current. If you are a smaller organization this can be difficult, especially if you do not have HR staff.

An HR audit can help you develop a list of potential compliance issues that you can investigate so that you can decide how to address them. We suggest that you consider developing a relationship with a law firm that specializes in employment matters so that you have access to legal updates as they arise. Your public accounting firm can also be a resource on these matters

Process improvement

Think about the changes you have seen at work over the past five, ten, or fifteen years.  Then ask yourself:

  • Are you still processing new hires the same way?
  • Have your hiring processes kept up with what today’s job seekers are after?
  • Are you communicating with employees the same way or are you using all of the new communications tools available to reach them?
  • Does administration of employee benefit plans and insurance invoice processing take up a lot of time?

When you think about how we do things in our personal life, whether its signing documents electronically, accessing information on website and other portals, and utilizing many different communications technologies, there are bound to be ways to apply these things in the HR department as well.

It’s easy to fall into the trap of doing things the same way each year. There are so many new tools to help get the HR paperwork handled more efficiently, it’s worth taking a step back and assessing what you are doing and ask yourself:

  • Why is it done this way?
  • Are there ways I solve similar problems in other aspects of my life that I can apply here?
  • Where do I spend most of my time? Does it add value?  Do other perceive this work as meaningful?
  • For any given process, if I review the number of steps involved, can I combine or reduce some?
  • What else could I do if some of these other tasks took less time?

When should you conduct an audit?

  • If you have a transition in your HR function, an HR audit can help the new HR leader set priorities.
  • If you expect new processes and systems to be implemented, reviewing processes and tasks can help make the implementation run more smoothly and give you a clearer idea of requirements and outcomes.
  • If there will be a change in key stakeholders…if there is an acquisition or divestiture, new leadership, or large groups of new employees, it might be a good time to conduct a review.

Human Resources audits are one of our specialties. We have the tools to conduct a thorough analysis and provide recommendations to be more compliant and more effective and efficient. If you need help starting your HR audit or have or other Human Resources consulting needs, contact us and check out our updates for more helpful resources.