“The greatest asset of a company is its people.”
– Jorge Paulo Lemann
Most organizations conduct financial audits once or twice a year to keep tabs on their assets and financial growth. However, when it comes to conducting Human Resource audits, the awareness is negligible.
Why is HR audit important?
Just like finance, it is crucial for the management to review HR policies and their execution on a regular basis. Here are chief four reasons to do so:
– Properly executed HR policies ensure satisfied and contented employees.
– Happy employees are a crucial factor for the organization’s success.
– It helps improve employee conditions and enhance the retention ratio.
– It brings malpractices to notice, if any.
What exactly is an HR audit?
The Human Resources department handles employee-related activities, ranging from onboarding to handling conflicts and even termination. They also conduct employee engagement activities to keep -vibrancy alive in the organization.
HR audit evaluates these processes, policies and their success or failure rate.
How to get started?
The first step towards conducting an HR audit is- setting goals and evaluating the progress.
– Rectify mistakes of HR personnel and work corrective measures.
– Identify whether HR activities are in line with the company’s policies and procedures.
– Evaluate if training, promotion, recruitment, grievance redressal, exit interviews and other HR activities are properly conducted.
– Identify activities with excessive expenditure and find ways to curb them.
– Expand goals and introduce new procedures to improve the work environment.
Step: 1
Maintaining employee records falls into the HR department’s purview. As a part of an HR audit, the management should check whether the department is properly keeping the employment eligibility verification and other records. Non-compliance can lead to hefty penalties in case external agencies get involved.
Step: 2
It is vital for an organization to maintain a non-discriminatory work culture. Therefore, documents supporting the employee’s selection over others must be stored and secured. This helps the organization defend itself when accused of discrimination or favouritism.
Step: 3
Many organizations provide Mediclaim and insurance support to their employees. It requires extensive and meticulous documentation. Also, medical documents need to be kept separate from general employee documents.
The management should periodically check whether the HR department follows the rules and assists employees whenever required. Then auditor should also review the location where the files are stored.
Step 4:
Employee record retention rules differ from government to government. The management should check whether their HR departments comply with the government rules to maintain employee records in hard copy or electronic files. It is wise to check random files and folders to ensure the HR department follows the rules diligently.
Step 5:
The management should also ask the HR department to produce the record of grievance redressal. It helps understand the problems employees face and ensures they are solved within a given timeframe.
Step 6:
The HR department is allotted funds to conduct employee engagement activities regularly. It is wise to scrutinize whether these funds are put to proper use, its impact and ways to utilize them better.
The HR department is a force that infuses discipline and happiness into the organization. HR audits ensure that they set benchmarks high. Small and medium companies that do not have a dedicated HR department can outsource these services to virtual HR consultancy firms like Huminivex Consulting and Training that provide end-to-end HR solutions.
