5 Signs You Need an HR Audit

HR departments look different from company to company. Some have entire departments, others have divisions, while some are single-person shows. That being said, they have one thing in common – their function has never been more important. To set organizations up for success, HR leaders need a seat at the table, and as efficient and effective HR operations are key to achieving company short- and long-term goals.

An HR audit can give you a valuable opportunity to review and renew your organization’s HR practices. A typical HR audit examines the following areas and more:

• Benefits & compensation
• HR Compliance
• Company forms
• Hiring and onboarding
• Job descriptions
• Performance evaluation process
• Employee files
• Termination process and exit interviews

If you’re not sure whether you would benefit from an HR audit, here are 5 glaring signs that you should consider it.

1. You are still building your post-pandemic recovery and transformation strategy

It’s no secret that HR’s post-pandemic challenges will continue through 2022, significantly impacting the future of work and how HR operates. Regular HR audits act as a review of your human resources function to ensure you can be best in class today, while keeping an eye out for continuous improvements for tomorrow. HR audits allow you to continue to drive towards the collective organizational goal of building a solid HR foundation for resilience, agility, growth and employee well-being. Plus, ensuring your HR department is ready to meet changing regulations will help your entire company be more nimble.

2. You have a lot of urgent positions to fill that include new skill sets

Technology and major changes like the pandemic are keeping companies on their toes. You may be hiring for positions now that didn’t exist a year ago. How do you know you’re finding the best new hires? How do you know you’re onboarding them in an engaging and effective way to ensure employee retention? Hiring, employee engagement, and retention are just some of the many key areas an HR audit touches on that you’ll want to be confident in. Now is the time to make the most of your human resources and make sure your company is consistently attracting new hires – both in the pandemic and beyond.

3. You don’t have a company handbook (or you haven’t reviewed it in a while)

Your handbook can work for you or against you. An HR audit will include revisiting your handbook to ensure you are following the policies you’ve set forth and that you’re incorporating necessary changes. And let’s be honest – a lot has changed. With the pandemic bringing such a huge increase in remote work, your technology policies may need to be updated. Your handbook sets the expectations for your employees. And, if anything in the handbook doesn’t align with your actual day-to-day procedures, you may have a hard time using it as a defense in any type of claim from an employee.

4. You don’t know how your recruiting team is doing

What are the metrics for your recruitment sources? How many candidates do you get from each source? How many candidates were interviewed from each source? How many were hired from each source? What’s the retention from each source? Can you make any changes on your recruitment based on these metrics? With the challenges of recruitment today, an HR audit enables you to be sure you are making the most of your efforts and determine what is working and what is not. You’ve probably heard the joke, “How about you post on LinkedIn if you’re not hiring?” If you feel the pressure of a massive hiring frenzy, you’re not alone. Organizations of all industries and sizes are feeling a similar pain. The most successful organizations understand how to utilize their network of employees and posting resources to be top-of-mind with their desired candidates.

5. You’re afraid you may not be in compliance with laws & regulations affecting your business

Because of the multitude of laws affecting each stage of the employment process, it is extremely important to regularly conduct an HR analysis of hiring policies and practices. This helps to identify any HR compliance issues if they exist and avoid potentially costly fines and/or lawsuits. An employer overlooking regulatory compliance with their HR practices could face fines and penalties in the thousands. This includes activities such as appropriate overtime payments for non-exempt employees, posting require safety notices, and accurately handling I-9 forms.

If you see any of these signs at your business, don’t worry: you’re in good company. Many of our clients are dealing with the same issues and an HR audit can be the catalyst for change and improvement that is needed in today’s world. Contact us to learn more about why an HR audit is a valuable investment.