2 PurposeThe purpose of a Human Resources audit is to assess the effectiveness of the Human Resources function to ensure regulatory compliance.To look for potentially serious problems (time bombs)To find areas needing improvementTo document processes for use in merger, reorganization or inspectionTo address compliance issues
3 In brief: to evaluate and improve your HR practices in: StaffingCompensation and BenefitsPerformance ManagementEmployee DevelopmentEmployee RelationsSafetyReporting and Recordkeeping
4 Benefits Creat an HR business plan Streamline HR work processes Monitor compliance with established regulations and proceduresDevelop user-friendly HR systems
5 How Interview key staff Review relevant documentation Help you complete a comprehensive questionnaireCompile data a prepare and customized written reportMake specific recommendations to improve the efficiency and performance of your HR function
6 Data What do the written policies and procedures say? What do the HR managers say?What do the line managers say?
7 Examples of dataHiring statistics (acceptance rate, hiring rate, hiring projections)TurnoverCompensation and benefits philosophy and practiceExit interview summariesEmployee complaints (discrimination, harassment, safety, other)Promotion and advancement practices and trendsHuman Resources budget and expenditures
8 Interviews Perceptions of the company and its goals Strengths and weaknesses of top managementEmployee perceptions of the company and top managementRelations with subordinatesSupport of career goals for self and employeesMajor Human Resources issuesWhich Human Resources functions work wellWhich Human Resources functions need improvement
9 Conduct the Regulatory Compliance Audit Personnel files and record keeping (contain only job related information)Pay equalityJob descriptions (ADA compliance)Health and safetyEqual opportunities and positive actionForms (applications, internal forms, etc.)Legal reportingPolicies and procedures
10 Recruitment How are candidates sourced? How are candidates selected? Are legal requirements met?Are the same processes used for all jobs, all locations?Are processes followed consistently?
11 Compensation and Benefits What are the different policy groups (e.g. management, clerical, union)?How is base pay policy set?What grading/job evaluation systems are used?Are there up-to-date job descriptions?What variable pay practices are in place?How are pay increments decided?What is the benefits plan?Are the same processes used for all jobs, all locations?Are processes followed consistently?
12 Workforce Review Are there any critical skills shortages? Are there any critical succession issues?Is there anything unusual in the distribution of worker age, gender etc.?What workforce planning processes are used?What succession planning processes are used?Are the same processes used for all jobs, all locations?Are processes followed consistently?
13 Training and Development How much training is given?How is the training program managed?Are there any staff development programs?Are the same processes used for all jobs, all locations?Are processes followed consistently?
14 Industrial Relations What unions exist and what jobs are covered? What collective agreements are in place, when do they expire?How many grievances are there per year?Are there any outstanding grievances?
15 LegalAre processes in place to manage compliance issues for all relevant jurisdictions?Is there any outstanding litigation?Are the same processes used for all jobs, all locations?Are processes followed consistently?
16 HR Technology What technology is installed? How up-to-date is the technology?Is the data clean?Are there any important technology projects in progress?
17 Strategic HR Where does the most senior HR person report in to? How much interest does top management have in HR issues?
18 Some Other Audit Techniques to Consider Audit of corporate culture.Competency audit of HR staff.Metrics based audit using metrics such as those proposed by the Saratoga Institute.Audit of customer satisfaction with HR.