An HR audit is a systematic method of investigating the HR department’s practices, policies, and procedures. It helps identify gaps in HR practice areas, and HR can prioritize these gaps by identifying ways to improve. Like any other type of business audit, an HR audit also takes place to avoid errors and meet the desired goals.
An HR audit can be primarily categorized into two areas: risk mitigation and value creation. Risk mitigation focuses on legal areas and employee-related lawsuits that may get the organization into legal trouble. Value creation, on the other hand, focuses on improving HR policies and processes to maximize the value of the employees.
Organizations may conduct an HR audit via external HR consultants or deploy their own HR department to perform an internal audit.