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The Importance of Conducting an HR Audit

hr best practices hr compliance hr essentials hr for small business Mar 22, 2021

Trust – but Verify!  This is a key to effective leadership and empowering your team.   Whether in Human Resources or Management, you need to be sure your HR compliance obligations are up to speed. Just as you audit accounting on a regular basis, audit your HR function annually as well. The stakes are too high to just assume everything is complying with regulations.

The audit can be as specific or comprehensive as you need to feel comfortable. You can complete an audit yourself, or hire outside professionals to conduct the evaluation. Often organizations and HR professionals use the audit as an exercise to benchmark against best practices and determine if processes have slipped.

Who can help?

There are multiple options when considering external professionals to conduct the assessment. Labor attorneys and human resources consultants typically offer this service. You can also find resources by inquiring with your payroll and employee benefit vendors. If you do choose to work with an employment attorney to conduct your assessment, ensure that they are a legal expert that spends most of their time in employment matters. A general corporate attorney who advises you on employee issues may conduct the audit, but generally doesn’t have the depth of knowledge of human resources to give practical advice or solutions. HR consultants are an excellent resource for assessments.

What is the outcome of an assessment or audit?

You should walk away from the process with an understanding of risks the organization may have in areas of compliance. There should also be an expectation from the person responsible to provide action items for the next 3 - 12 months of Human Resources activities that will improve the overall function in your organization. Hold your team accountable to using the process to move HR in a direction that is aligned with your risk tolerance and culture.

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