HR Audits Part 1: Why They’re Imperative to the Growth of Your Business

HR audits are sometimes overlooked, even though they’re an essential part of business growth and development. This month, we’ll be publishing a four-part series that covers their purpose, the ideal schedule, preparing for an audit, and what you can expect to achieve from an HR audit.

Monitoring is Your Legal Responsibility

Regardless of whether your company is public or private, certain government restrictions will always apply. While many companies focus on having internal checks and balances that relate to finances, human capital is often included in this, though is frequently overlooked. Certain disclosures may have to be made to investors regarding conflict of interest as well. On top of this, hiring and retention practices may become a legal issue should an individual come forward and claim that they were treated unfairly. The documentation provided in audits will either allow your company to catch genuine issues and current them or defend itself against fraudulent claims in court.

There is a Multitude of Benefits to HR Audits

In addition to legal protection, conducting regular HR audits can impact your company’s growth and behavior. An audit can help your organization to:

  • Confirm that you are acting in accordance with the policies and regulations you’ve developed.
  • Identify and troubleshoot inconsistencies and issues.
  • Measure goals and assess the effectiveness of initiatives that have been taken.
  • Discover new areas for improvement in terms of work and HR processes.
  • Find fresh ways to serve and connect with the employees, management, and the community.
What Should Be Included in Your HR Audit

It’s best to customize your HR audit based on your organization’s needs. Here is a checklist to get you started:

  • Verification of legal compliance with specific statutes and organizations, such as the ADA, FMLA, EEO, and IRCA.
  • Proper record keeping, including applications, employee tax forms, and employee files.
  • Company policies and procedures.
  • Employee guidelines and training.
  • Your own internal performance review system.
  • Practices related to employee relations.
  • Employee termination protocol and records.
  • Pay equality and compensation documentation.
  • Records and processes relating to health and safety, such as OSHA compliance.

By monitoring these items on a regular basis, you’ll be able to improve the effectiveness of your HR department and prime your company for stronger growth. It is possible to have an internal party examine your processes, but because biases exist and internal employees have the tendency to accept things how they are, rather than examine items for potential improvements, it’s far better to retain a third party to handle the HR audit for you. Contact us for information on how we can help you with your HR audit and check back on our blog for the remaining three parts of this series.

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