HR Audits are a great preliminary step in setting up the right HR systems and practices, as it shows you what you’re missing, what you need, and a clear path of priorities to get there.
PeopleStart HR Audits come in two-parts. The first (and most important) procedure in the PeopleStart Audit program is taking steps to ensure that your company is compliant with state and federal laws and regulations. This includes reviewing and assessing the appropriate industrial Award classification (where applicable) for all employees, a wage audit, review of TOIL practices, record keeping, other key legislative requirements and general HR practices.
The second step in the HR audit is to thoroughly examine our client’s current HR models and systems to assess strengths, weaknesses, and potential opportunities.
The benefits
HR audits help your business avoid HR headaches and costly financial penalties in the future. With Fair Work laws constantly changing, it is becoming increasingly difficult for business owners to stay on top of regulations, and to adjust practices quickly enough to remain compliant.
HR compliance audits are a solution to make sure your organisation’s policies and practices are aligned with external regulations and laws, thereby protecting you and your business from potentially harmful legal action.
HR Audit Key Review Areas:
- Legislation compliance; Fair Work, NES (National Employment Standards), Industrial Award
- Employment Contracts / EBA’s
- HR Policies & Procedures
- On-boarding processes and induction
- Recruitment & Selection processes
- Employee Relations & Development management
- Employee & Management Learning & Training
- Record-keeping compliance
- Employee Termination processes
- Remuneration practices
- Performance Management Process
- Organisational Design Review
- Culture Foundations and processes
The Steps
- We undertake a detailed analysis of your current processes and systems and documents
- We provide a detailed report including any non-compliances, our assessment of your policies / contracts, and a list of recommendation broken down into priority areas.
- We have a consult to discuss the findings and whether there are any items that need to be addressed either immediately, or at some point in the future.
- A properly executed HR Audit will reveal problem areas and PeopleStart assist by providing recommendations and suggestions that can be implemented moving forward in the HR outsourcing process.
- There is incredible value in a preliminary Audit of your HR practices. Really it’s just a simple way by which HR consultants can evaluate your company’s strengths and identify any needs for improvement.
Are All HR Audits Created the Same?
No. There are multiple types of HR audits with differing goals. The two main types are risk mitigation and value creation. While you can conduct both types of audits simultaneously, they will focus on different aspects of your HR processes and policies. Risk mitigation will mainly look for areas where you can get into legal trouble or are leaving yourself open to employment-related lawsuits. Value creation will mainly look for areas where your processes and policies can be improved to maximize the value of your employees or attract better employees.
What Specific Areas Do HR Audits Examine?
When you conduct an HR audit you can look into one or more of the following areas, depending on your concerns, budget, and time frame.
Compliance
Any human resource leadership team will want to know that they are compliant. An HR compliance audit focuses on how well your business is complying with current local, state, and federal employment laws and regulations. This is a risk mitigation audit. Your goal is to ensure you aren’t violating any laws or leaving yourself open to liability lawsuits.
Best Practices
Is your human resource management team at the top of their game? An HR best-practices audit compares your HR processes and policies with the accepted industry standards. This type of audit can be greatly beneficial to a growing company because it can help ensure you’re on the right track as you increase payroll, create handbooks, establish job descriptions, and set expectations for your new employees.
Performance
An HR performance audit involves a review of personnel files with the goal of evaluating the quality of feedback your managers are giving their staff. A lack of quality feedback can inhibit the growth of employees. A performance audit can identify problems with your review and feedback process before employee development suffers.
Competitiveness
What kind of compensation packages have your HR managers put together? Are your wages, salaries, and benefit packages competitive? An HR competitiveness audit looks into all areas of employee compensation and benefits to assess whether your business is doing what it needs to do to attract the best-qualified employees. Even if you can’t compete on wages or salaries, a competitiveness audit can identify other areas (such as working from home opportunities and flexible work schedules) that can improve how attractive you are to applicants.
Function-Specific
A function-specific audit is a kind of mini-audit where you examine just one area of your HR processes or policies. You might choose to investigate an area such as payroll management, employee review policies, record-keeping efficiency, etc.
Why Are HR Audits Important?
An HR audit is the only way you can fully assess whether your HR processes and policies are benefiting or harming your overall business. If you’re in danger of a lawsuit or criminal suit, if your HR systems are inefficient, if your employees aren’t developing, or if you can’t attract the right employees, your business will suffer. Improve those areas, and you can improve your chances for success.
Talk to us today about a HR Audit for your business.
Our professional consultants have extensive industry experience and available to chat anytime. Reach out and we’ll happily answer your questions.
