Human Resource Auditing

As the year draws to a close, we should take some time to review our achievements against plans for our organizations. We all know that we worked hard dealing with issues of productivity and leadership, but have our policies and procedures contributed to the successes or failures of the organizations for which we work so diligently. A comprehensive Human Resource Audit can assist in answering this question. You do not have time for this, then what are you really working so hard for each day?

An HR Audit is precisely that, a review of policies, systems and procedures and their implementation to determine if they met the needs effectively and if they were in compliance with labour laws and in keeping with good industrial relations practice. It will highlight areas that need enhancing, introduction or removal.

Can compliance be increased? Did the line effectively and consistently utilize the systems in place? Did the strategies focused on meet organizational needs? Are there areas where cost savings can be derived? Can risk be reduced? Are there opportunities for training and development? Did the organization perform in keeping with best practice? I am sure that you can add to this list of questions that can be answered by undertaking an audit.

In-house Human Resource practitioners can undertake the audit, or assistance can be sought from Consultants if time or capability does not permit. A series of in-depth questions can be developed as a first step. The scope of the audit also has to be determined. It can focus on specific functions that may have been of concern during the year or will be going forward, such as Recruitment and Selection. It can focus on areas that were highlighted in the organisation’s strategic plan. A general focus of all aspects of HR can also be undertaken, touching on Recruitment, Retention, Performance, Compensation, Recognition and Reward, Training and Termination to name a few. The Employee files should also be a priority as we know the importance of the mantra “documentation, documentation, documentation”. This is where many organizations expose themselves to the greatest risk.

Policies can be reviewed, but metrics must also be used to review what actually occurred during the year. The use of metrics can lead to direct strategies that can be employed to address issues revealed. For instance, the time to fill metric for key positions may show a less than adequate recruitment system. The number of grievances reaching past the second stage may suggest the implementation or revamping of non-crisis meetings with the union.

The results from the audit can be used to reward departments that had acceptable levels of compliance and to organize refresher training for those that did not. Feedback together with an action plan to address findings should be presented to management for discussion and buy-in.

Dedicated use of the auditing process will assist HR professionals with concretizing their impact on the bottom line and will provide avenues for continuous improvement.

* Adapted from a SHRM White Paper by Theresa Daniel entitled HR Compliance Audits: “Just Nice” or Really Necessary.

Bianca Attong
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