HR audits give organizations the opportunity to assess their human resources policies and practices. They also determine compliance and adherence to regulations. It is similar to a tax or a financial audit in companies. For a successful HR audit process, follow the 5 steps:
1. Set the HR audit objectives
The main objective of an HR audit process is to identify any gaps in HR practices or policies. To do this, objectives must be established by the HR department. Since there are multiple purposes for an HR audit, organizations can list clear objectives based on what they want to achieve. The objective could be anything from ensuring compliance to addressing employee relations issues.
2. Align the HR audit objectives with corporate strategy
Once the HR audit objectives are established, make sure that the planning and timing are in line with the business strategy. Misalignment between HR and business goals causes structures and systems to fall apart and create gaps in the expectations of organizations and performance of HR departments.
3. Prepare a rough audit plan
Before implementing the HR audit process, prepare a rough plan on what the HR department wants to achieve. To prepare a rough HR audit plan, understand the manpower required, costs to be incurred, and the technology necessary.
4. Collect data through data compilation techniques
There are external and internal factors that affect the HR auditing process. Internal factors include company policies, skills, strategies, etc., and external factors include legal environment, competency level, and so on. There are many data compilation techniques like interview methods, task force, questionnaire methods, observation methods, etc.
5. Synthesize the data
The data gathered in the above step presents the current situation of the business and HR as a function. This helps HR identify staff patterns and any issues so that they can be prioritized. Specific trends and patterns can be derived from this data by depicting them in the form of trend lines, statistical correlations, and frequency distributions.
6. Develop a detailed audit report
This step involves both the improvement of the initial HR audit plan and preparing an audit report. Gather all the HR functioning data consisting of different HR department areas. An HR audit report includes a description of all the HR activities that are effective and ineffective. These reports are brought to the notice of the top management to devise action plans to solve the problems from this audit.