The goals of an HR audit are manifold. While not mandatory, every area of HR that is reviewed benefits from having made this effort. According to Mark S. Floyd, partner with the Cleveland law firm Walter and Haverfield, “Audits examine the effectiveness of the HR department’s current policies, procedures, and systems as they relate to the latest changes and developments in labor and employment law.” Moreover, he adds, “senior leadership relies heavily on [the HR] department to ensure that the company’s overall business strategy is consistent with the many complex laws and regulations that govern the workplace environment.”
Not convinced yet? Here are some reasons why HR audits should be a priority at your organization. A thorough HR audit:
- Improves processes and policies that impact employees. An HR audit is a chance to improve areas of your processes and policies that have the biggest impact on employees. This empowers workers, helps retain them, and ultimately makes for a stronger company.
- Ensures corporate compliance. Never take for granted that your policies are compliant with all the laws. There are new employment laws and changes to the laws occurring all the time. In order to get and remain compliant and avoid unwanted lawsuits, you must be ahead of the game with HR compliance audits that identify any potential risk areas.
- Makes HR data meaningful and strategic. Put all that HR data to good use by connecting it with the reality of your HR policies and procedures.
- Helps prevents adverse impact in employment practices. You can mitigate problems with disparate impact on candidates in recruitment, and on candidates in salary and compensation, succession planning, and generally, throughout the employee lifecycle, by doing audits.
- Creates equitable and fair compensation. During your financial audits and compensation analysis, it can also be a good practice to audit how equitable and competitive your salary and compensation packages are. This can support recruitment and retention efforts and also avoid complaints.
- Identifies inefficiencies in systems and practices. At the very least, HR audits can help to discover any practices or systems that are not efficient. Redundant tasks or processes that are too lengthy can cause mistakes to happen.