Human Resource Auditing
Purpose
• The purpose of a Human Resources audit is to
assess the effectiveness of the Human
Resources function to ensure regulatory
compliance.
• To look for potentially serious problems (time
bombs)
• To find areas needing improvement
• To document processes for use in merger,
reorganization or inspection
• To address compliance issues
In brief: to evaluate and improve
your HR practices in:
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Staffing
Compensation and Benefits
Performance Management
Employee Development
Employee Relations
Safety
Reporting and Recordkeeping
Benefits
• Creat an HR business plan
• Streamline HR work processes
• Monitor compliance with established
regulations and procedures
• Develop user-friendly HR systems
How
• Interview key staff
• Review relevant documentation
• Help you complete a comprehensive
questionnaire
• Compile data a prepare and customized
written report
• Make specific recommendations to
improve the efficiency and performance of
your HR function
Data
• What do the written policies and
procedures say?
• What do the HR managers say?
• What do the line managers say?
Examples of data
• Hiring statistics (acceptance rate, hiring rate,
hiring projections)
• Turnover
• Compensation and benefits philosophy and
practice
• Exit interview summaries
• Employee complaints (discrimination,
harassment, safety, other)
• Promotion and advancement practices and
trends
• Human Resources budget and expenditures
Interviews
• Perceptions of the company and its goals
• Strengths and weaknesses of top management
• Employee perceptions of the company and top
management
• Relations with subordinates
• Support of career goals for self and employees
• Major Human Resources issues
• Which Human Resources functions work well
• Which Human Resources functions need
improvement
Conduct the Regulatory
Compliance Audit
• Personnel files and record keeping (contain only
job related information)
• Pay equality
• Job descriptions (ADA compliance)
• Health and safety
• Equal opportunities and positive action
• Forms (applications, internal forms, etc.)
• Legal reporting
• Policies and procedures
Recruitment
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How are candidates sourced?
How are candidates selected?
Are legal requirements met?
Are the same processes used for all jobs,
all locations?
• Are processes followed consistently?
Compensation and Benefits
• What are the different policy groups (e.g. management,
clerical, union)?
• How is base pay policy set?
• What grading/job evaluation systems are used?
• Are there up-to-date job descriptions?
• What variable pay practices are in place?
• How are pay increments decided?
• What is the benefits plan?
• Are the same processes used for all jobs, all locations?
• Are processes followed consistently?
Workforce Review
• Are there any critical skills shortages?
• Are there any critical succession issues?
• Is there anything unusual in the distribution of
worker age, gender etc.?
• What workforce planning processes are used?
• What succession planning processes are used?
• Are the same processes used for all jobs, all
locations?
• Are processes followed consistently?
Training and Development
•How much training is given?
•How is the training program managed?
•Are there any staff development programs?
•Are the same processes used for all jobs,
all locations?
•Are processes followed consistently?
Industrial Relations
•What unions exist and what jobs are
covered?
•What collective agreements are in place,
when do they expire?
•How many grievances are there per year?
•Are there any outstanding grievances?
Legal
•Are processes in place to manage
compliance issues for all relevant
jurisdictions?
•Is there any outstanding litigation?
•Are the same processes used for all jobs,
all locations?
•Are processes followed consistently?
HR Technology
•What technology is installed?
•How up-to-date is the technology?
•Is the data clean?
•Are there any important technology projects
in progress?
Strategic HR
•Where does the most senior HR person
report in to?
•How much interest does top management
have in HR issues?
Some Other Audit Techniques to
Consider
•Audit of corporate culture.
•Competency audit of HR staff.
•Metrics based audit using metrics such as
those proposed by the Saratoga Institute.
•Audit of customer satisfaction with HR.
Any Questions?