We all have heard about the financial audit, but what is an HR audit? An HR audit is a Human Resource audit wherein the review of various HR policies, systems, documentations, and rules and regulations is done. It also measures the efficiency and productivity of employees. In simple words, an HR audit is a measurement of success. Various aspects of the HR department such as employee compensation, recruitment and training, employee perks, job descriptions, performance evaluation procedures, termination procedures, etc. are reviewed. As a basic purpose an HR audit finds the areas needing improvements as well as its strengths. To ensure that that the HR department is working smoothly, HR audit is the most beneficial way.
Different Kinds of HR Audit
Compliance HR Audit
This is an in-depth HR audit covering the most important aspects of the HR department. From procedures, HR policies to HR practices, everything is reviewed in a compliance audit. The necessary systems and procedures for Family and Medical Leave (FMLA) are thoroughly checked in this audit. Classification of employees under the Fair Labor Standards Act (FLSA) is also checked and reviewed. Also, the Occupational Safety and Health Act (OSHA) policies are checked.
Sometimes, if an employer does not want to do an entire compliance audit, he can also opt for a simpler audit wherein the functions are considered. On a simple note, checking and reviewing the HR functions is a functional audit. Record keepings, proper documentation of files, employee compensation and benefits, performance evaluations, and employee participation levels are reviewed among other things in a functional audit.
Strategic HR Audit
As reported by the HR Bartender, a strategic HR audit is the highest level of audit for the HR department. It includes all the current strategies and policies of the HR. A review is done to see if the HR is putting the strategies of the organization into practice.
Also, every organization has a strategic direction. So the strategic audit sees to it that the HR is working in co-ordination with this direction.
Organizational HR Audit
This is the simplest audit of the HR department, as HR Bartender reports. Organization of things is a very important aspect for the HR. Important files and documents can get displaced due to negligence sometimes. Proper filing of important things, confidential files, placement of paperwork in a tidy manner, documents in respective folders, etc. an organizational audit takes care of all such things. Not only paperwork, but computer files are also taken into consideration for an organizational audit.
How HR Audit can be done
Preferably, an organizational audit can be done by an internal auditor. But for higher level audits including laws and legal forms, it is advisable to rope in an external consultant. This can also save the time for your internal audit team.
Moreover, the intervals at which the HR audits should be done depend upon the employer. You can carry an organizational audit at regular intervals as proper documents and files are needed almost every day. For an in-depth and strategic audit, regular auditing is not a compulsion. Based upon your company’s needs, you can decide the time periods for various HR audits.