A HR audit is an objective examination of your business’s HR policies, practices, and procedures. The goal is to to evaluate whether the ‘current state’ of HR is legal, efficient and effective.
A HR audit can, and should, be used as a diagnostic tool to determine, assess and address gaps between the current state and the desired state of your HR practices, with a view of continually improving HR practices and associated activities.
To effectively do so a HR Audit should aim to cover three aspects:
- Systems: a review of data and information, as well as HR procedures, processes and practices. This includes policies, procedures, forms, templates, HR information systems and the advice and guidance provided by Leaders to other members of the business.
- Behaviours: how well systems are understood and used by managers, employees and other stakeholders. This includes employee commitment, accountability, acceptance of HR systems.
- Attitudes: how systems are perceived by managers, employees and other stakeholders. This includes perceived fairness, efficiency and effectiveness of the HR systems.
The objectives of a HR audit are generally to:
- test the compliance of the HR practices against external legislation and internal business governance
- assess the effectiveness of the HR practices against wider business goals and best practice
- identify any gaps, inconsistencies or shortcomings of HR policies and practices against specified outcomes
- suggest actions to address any identified gaps, inconsistencies or shortcomings and
- recommend steps to continually improve the performance of the HR practices.
Benefits to evaluating HR activities
The benefit of a HR audit is to assist businesses to identify shortfalls around and increase:
- Productivity: by ensuring current practices are complementing and contributing to business goals, any critical HR problems are found and addressed, and that the business resources are being used to maximum effect
- Compliance: by ensuring current HR policies and practice meet legislative obligations. This can reduce legal claims and effect the business reputation as perceived by customers, potential applicants and shareholders
- Best Practice and Continuous Improvement: by determining a businesses desired state (benchmark), assessing its current state, and deciding how the business can bridge the gap between the two.
We are here to help!
Are you seeking to understand how your HR practices stand up? Reach out today to discuss how we can facilitate a HR Audit in your business.
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