The success of any good Human Resources department lies in its processes and systems. HR audits—comprehensive reviews of those processes—give businesses the chance to make sure that the department is functioning as best as it can be.
We at LBMC Employment Partners made this quick guide to help direct your company through its next HR audit.
Companies and their processes change over time as new people come in and new technology emerges. During this natural progression, things can get lost in the shuffle. HR Departments need specific programs, documents, and processes for everything from managing employees to cataloging data. HR audits ensure that all these procedures are in place and that they use the most up-to-date methodology and technology.
Most companies should perform small internal audits of specific elements of the HR department at different points every year. This lets HR professionals note what has changed and what needs improvement on a continuous basis. But, beyond these small check-ups, businesses should also consider other types of regular audits to improve performance. Here are some examples:
This type of audit involves hiring an outside firm to vet your Human Resources department. Experts can often find problems or suggest improvements that those within your organization are too close to see. Using an expert HR firm from outside your company is the best way to ensure that your HR department meets the best practices in HR standards.
This type of audit compares one company’s HR department with another, model company. This type of audit is the easiest way to bring a new or ailing HR department up to an appropriate standard. This type of audit can be performed internally but is best conducted by an expert firm.
This type of audit compares each HR process with its objective to make sure that the department is meeting its goals. This type of audit is best conducted by an expert firm after a company has overgone a major overhaul.
After choosing a type of audit and a firm to perform it, the department should decide the purpose and scope of the audit. Will this audit look at one specific element of the HR process or vet the entire department? What goals or benchmarks is the audit meant to achieve? Once these decisions are made, the auditor must collect all relevant information on the HR process being examined and perform the analysis. The audit concludes with a final report that analyzes the effectiveness of the HR process and makes suggestions for improvement.
Many HR auditors use a checklist during the audit to help collect all relevant information and identify any gaps in the department’s procedures. Expert HR firms have complex checklists tailored to each company’s goals and the type of audit, but all HR departments should have their own checklists for performing their annual internal check-ups on each of their processes.
There are three types of questions that every checklist should include:
This should be the first question on any HR checklist. It establishes whether a necessary process or policy exists and what it is.
HR department policies and procedures should be designed to follow the general best practices. This ensures that the policies are inclusive and don’t have any unintended consequences.
All procedures should have a purpose. This type of question helps determine if the department is meeting its goals and moving forward.
LBMC Employment Partners can help you perform a successful HR audit and improve your company. From payroll to PEO services, we’re equipped with a comprehensive suite of HR services to grow and scale with your company along the way!
