An effective HR audit will be performed at least yearly and will cover a number of areas that fall under the human resources umbrella. The areas included in your organisation’s HR audit may differ, but most will include some or all of the following topics:
1. Compliance
Compliance is one of the most common areas analysed in an HR audit. It involves comparing actual HR practices to existing company policies as well as legislation and regulations, spotting discrepancies and identifying changes that need to be made to ensure compliance.
2. Best Practices & Policies
Every HR team will have its own set of best practices and policies in place, and the HR audit is the perfect time to review these. Teams should look at both current and upcoming policies to see if they are consistent with the organisation’s values and objectives and general industry best practices, as well as checking for compliance with applicable legal and regulatory requirements.
3. Performance
To audit performance, teams will need to track metrics that are connected to the organisation’s overall strategy and objectives. Each company will prioritise different performance measures, but it is key to continually collect quantifiable data on the HR function’s activities and how they support high-level business goals.
4. Competitiveness
An HR audit should take the time to analyse the competitiveness of the organisation, its compensation and benefits and its policies in comparison to other companies. The HR function is responsible for attracting and retaining talent, so it’s important to regularly check in on how it stacks up against the competition.
5. Function-Specific
The function-specific area of an HR audit takes a deeper look at each specific department, from payroll to benefits to People Ops and more.