HR Audit Process
Posted on: February 21 2019, By : NEHA KENI
A Human Resources Audit or HR Audit is a thorough technique or means to survey current HR strategies, methodology, documentation and frameworks to recognize requirements for development and improvement of the HR work just as to evaluate consistence with regularly changing tenets and directions. An Audit includes efficiently investigating all parts of HR, generally in an agenda style. A well-executed HR ( HR Management in Mumbai ) Audit will reveal gap areas that can potentially lead to costly legal disputes and governmental fines. It is prudent to lead a HR review once consistently. Moreover, leading a HR Audit after a critical change in the association will distinguish the correct practices and feature works needing adjustment. Similar to a financial or tax audit, an HR audit gives businesses the opportunity to identify any potential human resources compliance issues and establish HR Practical Training best practices.
Purpose Of Hr Audit
The purpose of an HR Audit is to recognize strengths and identify any needs for improvement in the human resources management function. A properly executed Audit will reveal problem areas and provide recommendations and suggestions for the remedy of these problems. Some of the reasons to conduct such a review include:
• Ensuring the effective utilization of the organization’s human resources
• Reviewing compliance in relation to administration of the organization
• Instilling a sense of confidence in management and the human resources function
• Maintaining or enhancing the organization and the department’s reputation in the community
• Performing review for shareholders or potential investors/owners
• Establishing a baseline for future improvement for the function
Objectives Of Hr Audit
• To review every aspect of management of HR to determine the effectiveness of each programmes in an organization.
• To seek explanation and information in respect of failure and success of HR.
• To evaluate implementation of policies.
• To evaluate the performance of personnel staff and employees.
• To seek priorities, values and goals of management philosophy.
Need For Human Resource Audit
Though there is no legal obligation to have HR audit as in case of financial accounts but the managements have realized its need and usefulness. Therefore they have taken up HR audit voluntarily. It is done to fulfill the following needs:
• The managements of organizations have realized the need for HR audit because of powerful influence on motivation of employees at work due to participation of employees in decision making.
• Growth of organization needs HR audit. Large organization requires continuous feedback for improvement in performance of its employees.
• Mounting pressures from trade unions of employees and their participation in formulating employment policy and questioning of managerial competence have raised the need for HR audit.
• An effective two way communication system has also facilitated the need for HR audit.
• Many plants are located at large distances. This also made the HR audit compulsory.
• The HR audit becomes essential because of delegation of authority and decentralization of power.
Types Of Hr Audit
• Legal Compliance Audit: This audit ensures compliance with all applicable federal, state, and local laws and reviews whether the current HR policies and systems meet the legal requirements.
• Comparative Audit: This audit involves comparing the current procedures of the organization with other organizations in the market that have proved to be successful in practice, in order to gain a competitive advantage.
• Strategic Audit: This audit involves evaluating the SWOT (Strengths, Weakness, Opportunities and Threats) analysis of the HR processes to ensure that they are in alignment with the organization’s strategic plan.
• Function-Specific: This audit focuses on specific functions in HR such as Training, Compensation and Recruitment and helps to measure their effectiveness in relation to long-term business goals.
Steps For Successful Hr Audit
• Determine the scope: The first step of conducting an HR audit is to determine the scope of the audit. If an HR audit has never been conducted, a comprehensive review of all policies and procedures is recommended. Going forward, businesses may choose to conduct audits that focus on specific HR functions, such as payroll ( Core HR Payroll In Mumbai ) or record keeping.
• Develop a plan: The next step is to develop a plan for conducting the audit. Identify the goals of the audit, assemble the audit team and create a timeline for completing the audit.
• Gather and analyze the data: Once the audit begins, the audit team should gather all the applicable documents and forms under the scope of the audit. The audit team should also review current and potential legal actions.
• Produce a report: After all of the necessary information has been analyzed, the next step is to create a report with the findings of the audit. This report should identify any strengths and weaknesses found during the audit, as well as offer recommendations to correct any instances of noncompliance.
• Create an action plan: Once the audit is complete, company executives should meet with the audit team to discuss the findings and formulate a plan to address each problem or area of concern identified in the report. Action items may include changes to policy, procedures and/or hr practical training practices. Organizations should also consider their available resources when setting a timeline for correcting noncompliance issues, and ensure any corrective actions are realistic and achievable. In addition, organizations should take measures to ensure the audit information is kept confidential and protected from unintentional disclosure.
• Evaluate the progress: Once corrective measures have been implemented, organizations should continuously monitor and periodically review the new processes or procedures to ensure the organization stays compliant.
Every business owner must have an accurate and consistent hr audit process for the success of organization. Many organizations are opting for the services of best hr consultancy in India in order to drive their employees optimistically towards achieving the objectives of the organizations. To become pace with HR Disciplines you can take help of many Top Education Consultant in India who guides you for career.