What is HR Audit?
HR audit is the process of scrutinizing HR Policies to determine their helpfulness in contributing to the achievement of core goals of your business. It focuses on key components of what the HR department constitutes; HR Policies & Processes, and HR Indicators. Critically analyzing your HR key delivery areas shows you into ways that you could use your HR department to accelerate business growth.
By conducting an HR audit, you are also able to quantify the impact of HR practices, and flag areas that need improvement or changing. Ultimately, the success of your business in large depends on the pool of talent you have to execute business strategies. It is no wonder HR is such a critical element of your business.
There are a number of ways to conduct HR audit depending on what needs to be achieved;
1. Compliance. Focuses on how well the organization is complying with current federal, state, and local laws and regulations.
2. Best practices. Helps the organization maintain or improve a competitive advantage by comparing its practices with those of companies identified as having exceptional HR practices.
3. Strategic. Focuses on strengths and weaknesses of systems and processes to determine whether they align with the HR department’s and the organization’s strategic plan.
4. Function-specific. Focuses on a specific area in the HR function (e.g., payroll, performance management, records retention).
Depending on the needs of the company, a HR audit can be done annually. But given the sensitivity of the department and the number of issues that often arise, it is safer to carry out HR audits more than once in a year.
Here are four major reasons why you should prioritize HR Audit.
1. Be on the right side of the law
One sure way to face failure as a business is ignoring local and international laws regarding business operation. When you conduct an audit, you are reminded of the legal requirements in various sectors of your business. By ticking these boxes you avoid lawsuits that result from ignorance. This way, you can operate your business without having to worry about facing the court. Then you are able to focus resources on the operation of your business.
2. Leadership and Management Development
To run the various departments of your business successfully your team must almost work effortlessly. How to keep your teams and management engaged and constantly motivated is something you must consider. And a good place to get such insights is through feedback from HR audit because you get to learn how your team feels about their usefulness and worth to the business. And because your team’s growth is such a big deal to the productivity of your business, you will know what needs to be done to enhance the performance of your team and in retrospect increase the productivity of your business.
3. Adapting to Innovation
The way businesses run today has shifted in a big way in terms of innovation and technology. To remain relevant and even match competition, your business has to adapt to these shifts. And these highlights will be clearly revealed through HR audits. Adapting to innovation and new trends will mean that your organization’s management will have to prepare for these changes. It means communicating changes to the employees and aligning these changes to the best interests of the team.
4. Eliminate employee uncertainty
HR audit helps you flag out weaknesses in your HR policies and processes. Especially weaknesses that negatively impact your employees. When you know where you need to change, you will put effort in training and development, employee benefits and compensation, and communication across channels.
Painful as it sometimes is, an HR audit, if received well, will draw insights to key areas of your business’s operation that would otherwise be swept under the rug. All of these efforts will help you build a unique workplace culture where your employees are valued and driven to push your business past competition. .
If you are considering HR audit for your company, EBAS is here to help you align your HR department to your organization’s core goals. For queries, please contact us and we will help you maximize your business growth.