As much as HR is an increasingly strategic part of organizations, compliance is still a fundamental aspect of what we do. The consequences of not having proper records or being on top of employment laws, are pretty dire, and one of the best ways to ensure that your organization doesn’t fall into any of these traps is to have an HR audit process, complete with a standard HR audit checklist.
What Is an HR Audit?
SHRM has an excellent article here that goes into greater depth about what to expect from your audit and how to approach it. Instead of duplicating those efforts, I’m going to focus on giving you a quick overview.
An HR audit is exactly what it sounds like: a comprehensive look at your processes and paperwork, to see if everything is as it should be. Your HR audit checklist can be adapted to the special needs of your organization, but certain things are necessary for every organization. Your audit needs to cover:
- Employee files and records, as well as related policies
- All active postings and ads
- Your employee handbook and workplace policies, with special attention to:
- Recruiting and hiring
- Compensation and promotions
- Grievances and complaints
- Health and safety
- Your own HR processes and functions
Not only do you need to confirm the presence of these policies and records, you need to ensure that employees and leaders have signed off on them, are following them, and that they’re in line with the most current legal requirements. Red flags include incomplete paperwork, shallow employee files, missing forms, especially those required by state or federal law. You should also be looking for inefficiencies and processes that just don’t seem to work for your team – if a task or form is consistently being neglected, there may be an issue with your training, your team, or the task itself.
The HR audit process and checklist can and should be adapted for what your organization needs – but the goal should always remain a complete look at processes, policies, and objectives.
When Should I Audit?
You can split your HR audits up into smaller parts by focusing on specific areas at different times of the year, for example looking at compliance in the fall, best practices in winter, strategy in spring, and HR functions in the summer. You can also break up your audits by doing a holistic audit, by going one department at a time, perhaps two a year. While you should be auditing regularly, it shouldn’t occupy all of your time.
I recommend an annual audit, with mini audits throughout the year to prepare for the big end of year checkup.
So What Actually Goes On the Checklist?
A lot! Your HR audit checklist is bound to be long, which is why I recommend splitting it up into a series of easier mini audits to prepare for end of year. Most checklists are several pages long and cover everything from benefits to job ads to training and to discipline.
Here’s just one page from an excellent free checklist available for download on Slideshare:
This audit checklist asks you to make qualitative judgements about how your and other departments are performing. Other checklists are more black and white, with simple yes or no answers, especially when it comes to issues of legal compliance. But all audit checklists should be long detailed – though of course shorter in the case of mini audits – because their purpose it spur you into doing a holistic and honest evaluation that will ensure your organization is operating smoothly, correctly and is prepared for anything.
Questions need to go beyond the basics, like “is our hiring process good and legal,” to look at specific aspects of the process that may pose compliance, records keeping or fairness problems. Your audit checklist should force you to dig deep and examine the most important and riskiest parts of your job and those of your colleagues.
In part two of this post I will break down the significance of certain must have items on your HR audit checklist.