Human Resources – HR Audit Checklist & Review, California
PCS Consultants provide human resource audit to various industries. It is a critical aspect in HR because it allows the company to review the current policies, documentation, and procedures of the company while identifying what needs to be improved and updated. It helps a firm avoid legal and regulatory liability that may arise from HR policies and practices.
The process is crucial, considering that every state requires every company to adhere to specific employment or workplace compliance law. Moreover, the result of an HR audit also allows the company to identify gaps in their HR strategies. It helps in developing or enhancing HR best practices for both the employees and the company’s benefit.
With this on hand, an HR audit plays an essential part not only for legal compliance but also as part of the forecasting and risk management of the firm.
HR Audit
PCS Consultants consider HR audit as the process of assessing the practices, strategies, and policies of a firm parallel with the law and best practices in the industry. It also involves an objective review of the state of the employer when it comes to the practical and legal practices in the workplace.
Specifically, the HR audit involves two primary aspects, which include the evaluation and review of the current indicators.
The investigation is an assessment of the deliverables of the HR department of the company, which include recruitment, retention, compensation, benefits, relations, and training and development of the employees.
On the other hand, the audit also provides results in the assessment of the current fulfilled and unfulfilled positions in the company — the turnaround time of filling new and vacant positions, absenteeism rate, and employee turnover. The audit also needs to look into the objective assessment of employee satisfaction, legal complaints filed, and even the grievances filed and the type of grievances.
Sections for Review
There are a lot of sections to be reviewed and assessed in the audit; however, here are some of the basics that every company must prepare for:
- Employee Handbook – Employee handbook is an essential part of every organization. It is where the company communicates the policies and practices of the firm and is often the baseline for employee orientation. Therefore, the employee handbook must include the necessary information such as wages, benefits, communication processes, and channels, company goals and objectives, and date the manual is issued.
- Recruitment and Selection – generally speaking, the company must show that it has developed a standard recruitment practice supported by standard documents. It also needs to present monitoring and recruitment activities compiled by the HR department as outlined in the company policies.
- Compensation and Benefits – the financial statement of the company, accounting, and auditing documents can be part of the HR audit to assess the salary and benefits of the employees. Though it is a fact that employee rewards are a complex topic, the company must still present its reward system in the process, including how rewards are set and its structure.
- Posters – these are part of the audit, especially for postings that need to be displayed in common areas. Posters and signs are essential for employees’ information and must also be displayed in languages other than English.
- Health and Safety – workplace safety is critical, and companies must comply with OSHA and industry requirements. Injury prevention, safety training, and emergency response programs will also be evaluated during the HR audit.
- Recordkeeping – the files of the employees and the applicants must be kept. The personnel files must be secure and must be accessed by individuals who are allowed to access the data. Moreover, HR audits also evaluates how employees are informed of who access and have access to their files.
Rationale of HR Audit
The HR audit is essential, not just to identify the gaps in the HR practices of the company. Still, it also allows the HR manager and executives to determine effective and ineffective methods in the human resources management of the company. More importantly, the audit also instills a sense of confidence in the management because it allows them to identify the positive activities and room for growth in the area.
Once the audit results to a positive outcome, it also enhances the reputation of not only the department but also the organization.
It boosts the morale of the employees because the HR management excels in providing the employees and the management a healthy environment.
Working with an external HR audit team also ensures that the firm performs its due diligence. This means that the review can affect or influence the shareholders and how investors operate in and for the benefit of the company and the employees.
The result of the audit can also be used as a baseline for future policies and enhancements in the firm. It provides the company with room to improve and the HR management a step to improve their function in the company.
Types of Audits
An external HR auditing team is one of the best teams to work with, such as the team from PCS Consultants, because they provide objective evaluations of the various functions and aspects of the HR management or department in your company. More importantly, a comprehensive audit in the following areas will also be provided by the team:
- Compliance – the team will assess how the organization complies with the federal, state, and local laws and what are the gaps that need to be filled for the company to comply fully.
- Best Practices – an external HR audit team also helps in identifying what needs to be maintained or improved for the company to gain a competitive advantage in its industry.
- Function-specific – payroll, performance management, and executive hiring are some of the function-specific that an HR department carries out and must be assessed by the audit team.
Audits must be carried out twice a year to ensure that every course of action by HR management is carried out accordingly. The team must set key performance indicators to maintain the strategy and conduct of the HR team. Therefore, get an HR audit now from the best team at PCS Consultants and receive a full-scale audit in every HR function in your company now!
