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How to Conduct an HR Audit

Human Resources is one of the most important departments in any company. It is responsible not just for the oversight of employee engagement, recruitment, and payroll. It also often handles legal and compliance standards, which all companies must adhere to.

If your HR department is running like a well-oiled machine, it can result in an organization that runs on all cylinders and produces at top speed.

Conducting an HR audit from time to time is a good idea for any company, as it can help identify any gaps in your HR practices, which your organization can then address with proper plans.

Below is a guide to how to conduct an HR audit.

Set Audit Goals

Like any initiative, an HR audit will be most successful if you set clear goals. Are you conducting a general audit of your entire HR department, looking for an overview of how the department operates? Are you looking to drill down specifically into one area, such as legal compliance or payroll?

When you start by clearly defining some goals for your HR audit, then you’ll be able to come up with a detailed plan for how to approach the audit. Setting goals will also help you define the audit’s scope and timeline.

This helps to keep the audit focused and on track, while providing key points that you can measure throughout the process.

Get Buy-In from Key Stakeholders

Audit is often considered a dirty word to the people who are the subject of the audit. People tend to think that their work or integrity is coming under question if they’re the subject of an audit.

Of course, this isn’t always the case, but it’s important for companies to understand that this mindset exists. That’s why it’s so important to get buy-in from all the key stakeholders in the HR team before you conduct an audit.

Key stakeholders in this case could include your company’s executive team as well as the leaders within the HR department. Communication between those two cohorts will be vital to the success of the audit, as you’ll need the cooperation of employees within the department if you want to get the most out of it.

This buy-in is especially important if you are going to bring in an outside person or party to conduct the audit.

Determine Who Will Conduct the Audit

Are you going to create an internal team to handle the audit, or are you going to hire an outside company to do it for you? There are positives and negatives to each choice, so it’s important to weigh which option would be best for your company.

If you are keeping the audit internal, make sure that you choose the right people to be on the audit team, and ensure that each member of the team has a very clearly-defined role.

If you are hiring an outside entity to conduct the audit, research prospective companies and ask for references so you can thoroughly vet them before making a hire. In addition, it’s important to communicate to the external audit team what you want to get out of the audit and how you would like it conducted.

Collect and Evaluate Data

The audit process should produce a lot of data and information. The first step in the audit is to simply collect and organize all of that data. Then, the “real” work comes into play — wading through the data, analyzing it and coming up with conclusions.

One thing to keep in mind is that your HR audit may uncover a lot of areas that need attention. That’s to be expected, especially if you’ve never conducted an audit before or haven’t done so in a while.

Don’t get discouraged by this. Instead, view it as a great opportunity to make improvements.

Create an Improvement Plan

Once you’ve identified the areas in need of improvement, you must create a plan for how you’re going to address those areas. Start by creating a priority list for each area so that it doesn’t become overwhelming for you or the employees of the HR department.

After you’ve created a specific plan for each area, assign the tasks for how you will get it done and which employees will be responsible for leading each area. Then, move down the checklist for each area until it’s completed.

Communicate All Results and the Changes

Throughout the audit process, it’s essential that you communicate all results of the findings and the plans for what changes you’re going to make and how you’re going to make them to the leaders of the HR department.

Your chances of being successful in implementing the changes you need will be better if you’re open and transparent throughout the process. Expect that you will likely to get some pushback from some employees in the department. Change can be scary, after all.

But, if you’re constantly filling people in along the way, you’ll be more likely to be effective in getting done what’s necessary for your company’s HR department

Let Beckham Insurance Group Help with Your HR Audit

Auditing your HR department from time to time is a great idea for any company. The process can help identify any pressing gaps that you need to fill so you can create an HR department that runs smoothly all the time.

Undergoing such an audit can be a daunting process, though. That’s why it’s a great idea to partner with Beckham Insurance Group if you’re in the South Carolina or Georgia region.

Contact us today to learn more about how we can help you.