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What Is Human Resource Auditing?
- By Amy Nutt
- Published 05/25/2009
- Accounting
- Unrated
Amy Nutt
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As you work to grow your business, one of the scariest things that could happen, outside of an IRS audit, is a Department of Labor investigation. All it takes is one disgruntled employee who complains of unfair labor practices in your business to spark an investigation. Even if you have done everything according to the letter and spirit of the DOL laws, you will have to undergo a lengthy, time-consuming, expensive investigation if a complaint arises. This can be completely avoided by doing your own human resource auditing. This is a study that proves to you, the business's owner, that everything is being done as it should in the payroll and human resources departments.
Goals of an HR Audit
Just what should you expect to get out of an HR audit? The results will allow you to do the following:
- See how effective your current HR policies are. This will help you make the entire human resources office work in a more cost effective manner.
- Ensure that your business is complaint with all laws relating to wages and hours.
- Correct any problems with efficiency in the department.
- Correct any compliance issues before a complaint is filed.
- Chart actual performance against what you desire, and create a plan for helping employees overcome their weaknesses.
Many business owners find that performing human resources audits on a regular basis keeps their businesses running efficiently, while keeping the employees within the business satisfied and functioning well in their various roles.
How an HR Audit Works
So
how will you perform an HR audit? Whether you hire someone to do one for you or do it yourself, the process works the same. You will start by gathering all necessary information. This will include information to determine compliance with the law, costs of the HR department, and effectiveness and efficiencies of all employees within the company. These will then be studied to determine areas that can be improved and any places where the law is not being followed.
The evaluation is followed by a written report that can be used to make changes within the company to improve compliance and effectiveness. The report will typically contain an action plan and timeline that you can use to start working towards your new goals. Any compliance issues will need to be changed immediately, whereas other problems, such as efficiency issues, can be fixed later.
The Audit Must Be Comprehensive
If you are not thorough when doing an HR audit, it will not be effective. For this reason, many business owners hire an outside company to come in and perform the audit. This not only ensures that all necessary areas are studied, but it also ensures that the audit is done without a bias that would come when someone who is interested in the company for personal reasons performed the audit.
Hiring a company to come in and do an HR audit represents a cost for your business, but with the added income that comes from increasing efficiency and the peace of mind that comes from knowing your business is operating under the law, this expense is very worthwhile. If you have never done a thorough audit of your business's HR department, consider doing one soon so that you can maximize the effectiveness of your company.
Goals of an HR Audit
Just what should you expect to get out of an HR audit? The results will allow you to do the following:
- See how effective your current HR policies are. This will help you make the entire human resources office work in a more cost effective manner.
- Ensure that your business is complaint with all laws relating to wages and hours.
- Correct any problems with efficiency in the department.
- Correct any compliance issues before a complaint is filed.
- Chart actual performance against what you desire, and create a plan for helping employees overcome their weaknesses.
Many business owners find that performing human resources audits on a regular basis keeps their businesses running efficiently, while keeping the employees within the business satisfied and functioning well in their various roles.
How an HR Audit Works
So
The evaluation is followed by a written report that can be used to make changes within the company to improve compliance and effectiveness. The report will typically contain an action plan and timeline that you can use to start working towards your new goals. Any compliance issues will need to be changed immediately, whereas other problems, such as efficiency issues, can be fixed later.
The Audit Must Be Comprehensive
If you are not thorough when doing an HR audit, it will not be effective. For this reason, many business owners hire an outside company to come in and perform the audit. This not only ensures that all necessary areas are studied, but it also ensures that the audit is done without a bias that would come when someone who is interested in the company for personal reasons performed the audit.
Hiring a company to come in and do an HR audit represents a cost for your business, but with the added income that comes from increasing efficiency and the peace of mind that comes from knowing your business is operating under the law, this expense is very worthwhile. If you have never done a thorough audit of your business's HR department, consider doing one soon so that you can maximize the effectiveness of your company.