11 Reasons To Conduct an HR (Human Resources) Audit

by | Aug 1, 2021 | Leadership

Hiring an HR Consultant to complete an HR Audit for your organization can provide an immediate impact, let’s talk about some of the reasons why:

  • An HR Audit looks for Compliance issues and can save you not only the cost of unneeded lawsuits but stop legal problems before they arise. Laws change quickly, make sure you know you are protected.  One small lawsuit or settlement will easily cost more than money you will put into an HR Audit.  Catching small issues like do you have up the proper postings at timeclocks and in your hiring areas can prevent future issues.
  • An HR Audit can help you gain a better understanding on why your employees are leaving. Software can give you reasons and percentages that are put into the system.  Understanding your turnover and why employees are leaving will help you concentrate your efforts in the departments and areas that are costing you the most.  By ensuring your exit interview procedure is set up correctly you will ensure you are getting better feedback as employees leave the organization.

Learn more – 10 Exit Interview Questions You Should Ask

  • An HR Audit will look at your Diversity and Inclusion initiatives and give you feedback about how you are doing compared to others in your area and industry. The audit will also look at the generational differences in your workforce and provide you feedback about how you are doing will not only attracting but retaining a workforce that you want.
  • An HR Audit will look at your policies and handbook to ensure your policies are up-to-date and compliant. Your policies and employee handbook change as your business grows.  Small and family-owned businesses often want flexibility and decide not to have as many policies in writing as larger organizations.

Learn more – Building A Better Employee Handbook

  • An HR Audit will ensure that your employees are classified correctly and that your HR Practitioners are completing and following the correct hiring processes. If you’ve ever been part of a settlement or had to pay an employee for years of unpaid overtime (I’ve been there) then you understand why you need to take a serious look at your classifications.
  • An HR Audit will look at not only what you are paying your employees, but to ensure you are paying your employees a competitive wage and ensure that you are completing the proper governmental forms assuring that your Company is compliant. Most good managers and HR professionals understand know that employees leave jobs because of their bosses, not what they are being paid.  Just remember that it is much easier to find out what companies are paying today versus 15-20 years ago.

Learn More – Definitions of Employee Classifications

  • An HR Audit should look at your entire benefits package. A good HR Audit will examine the benefits you are offering your employees and look at not only compliance but how your benefits stack up next to others in your industry.  Your workforce may place a lot of value on healthcare depending on the average age of the group, likewise, a 401k match or bonuses might help you retain others.
  • An HR Audit will examine your job descriptions and look at your overall organization structure to look for potential compliance issues and potential problems. At a small company where you want flexibility, you may make the decision to go without job descriptions, but if you want to cover yourself and ensure that if you get to court, have a BWC claim, or have an ADA issue you are likely covered.

 

Learn More – Writing Effective Job Descriptions

  • An HR Audit will examine the knowledge of your leaders to determine what type of issues have been occurring and see what kind of training makes the most sense for your organization. As mentioned earlier a standard sexual harassment lawsuit or settlement, an ADA lawsuit, a discrimination lawsuit or other compliance issue will easily outweigh the small cost of being proactive with an HR Audit.
  • An HR Audit will look at your privacy practices and how your files are being cared for and stored to ensure you are compliant. Many times files are mixed or stored

 

Learn More – Complying With Employment Record Requirements

  • An HR Audit will help you examine your Human Resource function as a whole, looking at all your HR practices. As you start to understand how well the function is being run you will know if you need to make changes, or hopefully ensure you that your HR department is in fact effective.

Over the years of completing HR Audits I’ve found everything from simple policy changes, to missing postings, all the way up to violations that could have cost companies hundreds of thousands in fines and penalties.  If your HR Audit finds little to no issues, at least you’ll have better peace of mind.

I appreciate you reading our blog, and better yet checking out DHRS.

Stay strong, stay positive, and watch where you step in the field!

Derek

 

Derek Dozer, SPHR-SCP, SHRM

Chief Human Resources Strategist, Dozer HR Solutions

We all want to get to what we love and to love what we do. I’m doing it.  Dozer Human Resource Solutions is our Training and HR Consulting business. We live in Central Ohio and serve the Columbus, Cleveland, Cincinnati, Detroit, Wheeling, Charleston WV, Indianapolis, Buffalo, Pittsburgh, Lexington KY, Dayton, Newark, Cambridge, Zanesville, Marietta, New Philadelphia, Canton, Akron, Toledo, Parkersburg, and surrounding areas.

The author Derek is a senior HR professional who has worked in HR over 25 years. He has extensive experience in the automotive, industrial, foundry, metals, food service, and government sectors. He’s been involved in heavy negotiations with America’s largest unions, including USW and UAW negotiations in periods of economic difficulty.

Experience in:

  • HR Audits
  • Operations
  • Recruiting
  • Labor relations
  • Conflict resolution and mediation
  • Safety
  • Talent management
  • Organizational development (OD)
  • Teambuilding

Derek is a certified trainer for Myers-Briggs Type Indicator® (MBTI®), Herrmann Brain Dominance Instrument® (HBDI®), and Development Dimensions International (DDI.)

 

Education

  • Master of Business Administration (MBA), Business Administration and Management, Franklin University, 1997
  • Bachelor of Science (BS) in Human Resources and Business Management, Urbana University, 1993

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