A human resources audit or HR audit refers to a review of the HR procedures in place within a company.
How to Do a Human Resources Audit?
An HR audit is generally carried out in three distinct phases.
First, companies must prepare for the audit by drafting an engagement letter and compiling an audit file. This stage determines the main tasks of the audit.
The engagement letter may include:
- The context
- The goals and objectives
- The team members who will be involved in the audit
- The resources to be mobilized
- The rules to be observed
- The HR audit grid
- The deadlines
The implementation phase then begins with a kick-off meeting, at which the plan drawn up during the implementation phase is put in place. The data required for the audit, such as employee opinions and information on the quality of HR processes, must be gathered for analysis and interpretation.
Finally, the reporting phase consists of transcribing the results obtained during the HR audit, including the findings and comments from the analysis, the conclusions, and the actions to be taken.
What Are the Objectives of a Human Resources Audit?
A human resources audit assesses human resources practices and identifies areas for improvement within a company.
The objectives of a human resources audit include:
- Defining an action plan
- Ensuring compliance with existing legislation
- Identifying management risks
- Reviewing the performance of HR practices
- Improving HR processes
- Measuring HR indicators
What Are the Methods Used to Carry Out an HR Audit?
The methods used to carry out an HR audit are:
- Analysis of the remuneration policy: checking that salaries are fair within an organization.
- Analysis the performance of management methods: checking whether managers provide sufficient feedback to employees, for example.
- Analysis of compliance with legislation: ensuring that company policies comply with current legislation.
What Are the Benefits of Carrying Out a Human Resources Audit?
The benefits of carrying out a human resources audit include:
- Defining new medium and long-term strategies
- Cutting costs on payroll or HR tools
- Highlighting the strengths of human resources
- Implementing actions to remedy weak points
- Improving the image of the Human Resources department
- Streamlining a company’s HR practices and processes
- Improving employee retention rates
What Should a Human Resources Audit Checklist Contain?
A human resources audit checklist should generally contain:
- All employee-related documents: work permits, personnel files, performance appraisals, etc.
- The employee handbook containing all of the company’s HR policies
- Information relating to employee training and skills development
- The remuneration policy and bonus history
- The recruitment and onboarding process for new employees
- The laws and regulations to be complied with
What Types of HR Audits Are There?
The types of HR audits include:
- The corporate culture audit: analyzing the values, mission and management methods that help make a company an employer of choice.
- The legal compliance audit: validating that the company complies with the laws in place.
- The HR policy audit: ensuring the effectiveness and relevance of existing policies.
- The health and safety audit: identifying practices that put employees’ health at risk or protecting employees’ health.
- The strategic audit: analysing all HR practices and the company’s culture to implement significant changes within the organization.
How to Prepare for a Human Resources Audit?
To prepare for a human resources audit, companies can:
- Digitise all employee information and company policies
- Use employee management software to keep track of all HR-related documents
- Contact all company employees to inform them of the audit
Who Is Responsible for Carrying Out Human Resources Audits?
Responsibility for carrying out the human resources audit generally lies with a multi-disciplinary team that includes employees, supervisors, managers, executives and human resources officers. An external company may also be hired to provide support.
How Often Should a Company Carry Out a Human Resources Audit?
A human resources audit is not mandatory. However, experts recommend an audit every 5 years.