How to Conduct an HR Audit

An HR audit can be a significant undertaking, and teams need to devote the time and resources necessary to truly understand the opportunity areas across the function. Breaking the HR audit up into smaller milestones can be helpful to make progress toward the end goal. Here are the 7 steps we recommend following when performing your HR audit:

1. Define Your Audit Goals – There are various areas your HR audits can cover, but you must first clearly define the goals and scope of the audit for your organisation. Trying to tackle everything at one time will only lead to overwhelm, so set a realistic timeline.
2. Secure Stakeholder Buy-In – The support of your executive management team is crucial if you are to make a lasting, positive impact on your organisation. This is particularly important to secure in advance if you plan to hire an external auditor.
3. Identify Your Audit Team – Decide whether you will conduct the audit internally or hire an external team for the job. If it’s a team effort, determine which tasks each person is responsible for and set expectations for how you will evaluate each area during the audit.
4. Collect Relevant Data – Collect all the necessary data that pertains to the area(s) being audited. For example, data from your Applicant Tracking System (ATS) can be used if you are auditing recruitment funnel processes. Always be sure that you have permission to use the data before collecting it.
5. Evaluate the Information – Next, it’s time to review and analyse all the data you’ve gathered. The focus should be on identifying areas in the HR function that are working well and areas that need to be improved upon. All departments must evolve over time, so don’t be disappointed if your HR audit turns up quite a few areas to work on, whether it’s policies that need updating, compliance problems or opportunities to improve the employee experience.
6. Develop a Plan and Implement Improvements – Prioritise the areas with the biggest opportunity for improvement or that present significant risk, such as those any compliance issues that could expose the organisation to legal action. From there, work through the rest of the list to improve weak processes, policies and systems.
7. Transparently Communicate Any Results and Changes – If the HR audit will lead to any changes or improvements to processes or policies, managers should communicate these updates to employees.