Home / Employer / Recruiter Tips / HR Audits: What Are They and Why Should You Conduct Them

HR Audits: What Are They and Why Should You Conduct Them

Businesses want to know that they’re operating effectively and efficiently. So, they regularly review processes and procedures to ensure that they are. Similarly, every HR department wants to know they’re operating well. So, they do the same in the form of HR Audits.

HR audits, audits, HR, Human Resources, compliance

An HR Bartender reader recently asked me about HR audits. To give us a thorough explanation, I asked Mike Haberman SHRM-SCP, co-founder of Omega HR Solutions, if he would share his expertise with us. Omega HR Solutions provides HR on demand services including compliance, audits, and training.

Mike, on a high level, what is an HR audit and why should companies consider conducting one?

[Haberman] An HR audit is a tool to help a company determine that the HR department is functioning the way it is supposed to and covering everything it is chartered to cover. It is a specific look at the current state of HR and whether its specific practices are protecting the company and providing for the best use of their ‘human’ resources.

Specifically, what is covered in an HR audit?

[Haberman] Depending on the need at the time, HR audits can cover several areas. But it does not need to always cover everything. For example, I like to think of audits in four different categories.

  1. Organizational. The simplest audit can just be an organizational one. Is everything filed in the proper file? Often things get misfiled and as a result an important piece of paperwork may go missing. Or something will be misfiled in a folder that is not as confidential as it should be. This kind of misfiling can occur on computer files as well, not just paper.
  1. Compliance. The second level of audit, and the one we think of most often when talking about ‘audits’, is a compliance audit. Here the policies, procedures, and practices are looked at to make sure that federal, state and local laws are being complied with properly. Are your employees properly classified under the Fair Labor Standards Act (FLSA)? Are Form I-9s complete and filed correctly? Are correct forms being used for Family and Medical Leave (FMLA)?
  1. Functional. Rather than doing an entire compliance audit, sometimes it may be appropriate to do just a functional audit. Organizations may opt to look only at wage and hour classifications. Or focus on FMLA utilization. Benefits enrollment and proper participation levels may be an appropriate section to look for missing employees. Proper and up-to-date Occupational Safety and Health Act (OSHA) policies and recordkeeping may be appropriate. Are performance evaluations being done in a timely and effective manner?
  1. Strategic. The highest level of audit is a strategic audit. Is HR in concert with the strategic direction of the organization? How does HR put into practice its part of the strategic plan? Are the goals appropriate?

Should internal HR do the audit or is it better to use an external consultant?

Mike Haberman, Haberman, HR Audits, audit, HR, compliance, consultant[Haberman] The answer depends on the reason the audit was called for in the first place. If a perceived problem, such as unequal pay, prompted the call for an audit, it is best to do so through an external consultant and generally with the approval and guidance of your legal counsel. If a lawsuit were to result from a complaint, then that audit becomes ‘discoverable’ and the results could be used to prove the other side’s case.

Another reason to use an outside consultant is that the process of an audit is time consuming and frequently there will not be enough internal people to be effective in getting it done, especially if there is a short window of time to get it done.

After an audit is completed, what should a company do with the results?

[Haberman] Well, the audit was conducted to discover if there is a problem. If a problem was discovered, correct it. Unless it is one big one, such as you have been under paying women in your organization across the board, then you need to contact your legal counsel.

Often you can work with the consultant that did the audit to work through the issues with you, for a fee. Sometimes you can take the findings and develop a work list of things to get done. For example, it’s probably not an effective use of company resources to have the consultant redo your personnel files.

Are HR audits something that should be conducted on a regular basis?

[Haberman] The organizational audit is one that could be done periodically. That is just good housekeeping. Looking at Form I-9s for correctness should be done twice a year. The others should be done as the business world changes. If there has been a lot of new legislation, then an audit should be done to insure compliance. The strategic audit should be done every couple of years to insure the HR is on track with the strategic plan.

A huge thanks to Mike for taking the time to answer our questions. I loved his explanation of the four types of audits. It shows that HR audits aren’t just for start-ups or small companies. It’s something organizations need to do on a regular basis to make sure they’re being effective.

Image captured by Sharlyn Lauby at the National Atomic Testing Museum in Las Vegas, NV

The post HR Audits: What Are They and Why Should You Conduct Them appeared first on hr bartender.

Click Here For Original Source Of The Article

Ads by WOW Trk

About Mildred Blankson

I am a Human Resource Professional with a Masters Degree in Human Resource Management. I have several years of experience in Human Resources and i hope this blog will be a great resource in helping you find the perfect job or candidate that you seek.

Check Also

Recruiters: Do You Know the Quality of Your Web Traffic?

web traffic, traffic, recruiters, recruiting, bots, human resources, HR Bartender

One of the most interesting conversations that took place during this year’s TAtech Spring Congress was about web traffic. According to a report by software company DeviceAtlas, almost half of all web traffic (48 percent) is now generated by bots (aka web robots) and crawlers. Bots and crawlers are software that’s designed to visit your […]

The post Recruiters: Do You Know the Quality of Your Web Traffic? appeared first on hr bartender.

Leave a Reply

Your email address will not be published. Required fields are marked *

css.php