HUMAN RESOUCE AUDIT
A Human Resource Audit assesses an organisation’s Human Resource Management system, strategy, policies and procedures and provides solutions to address any gaps in order to increase it’s effectiveness.
Skillful and good employees are not only difficult to find but also expensive. Moreover, with globalisation and the change in market environment, laws, worker mobility, technology and uncertainty, organisations have to ensure that the people they employ have the required knowledge, skills and competencies to do the jobs for which they have been hired. However, recruiting employees and investing in their training and development is not all. In addition, organisations must ensure that their employees are motivated, engaged and happy to work for them. Employee engagement and talent retention are major challenges for many organisations. Therefore how do we address these issues? Human Resource Audit is the starting point.
3 Questions that can help in deciding for a Human Resource Audit
- How do you ensure that your organisaation has an appropriate HR Management System, Strategy, Policies and Procedures into place?
- How do you ensure that your people have the necessary knowledge, skills and competencies to make your organisation more competitive?
- Do you have an idea of the level of motivation, engagement, involvement of your employees?
A Human Resource Audit based on the following understanding and guidelines can certainly help.
What is a Human Resource Audit?
A Human Resource Audit is an objective assessment of a company’s HR Strategy, System, Policies and Procedures. Subsequently, the audit highlights areas of improvement and the appropriate remedial actions.
Benefits of conducting an HR Audit?
- An HR audit increases transparency for stakeholders;
- Compares human resource investment with outcomes;
- Develops a strategy for people-led growth;
- Demonstrates compliance with legislations and best practices;
- Evaluates the quality of human resources;
- Implements appropriate metrics to evaluate the HR Strategy
- Recognises the value of human capital;
- Increases level of Employee Engagement;
How is the HR Audit carried out?
HR Audit covers the following core areas:
- HR Strategy
- Organisational structure
- Organisational culture
- Leadership;
- HR Compliance and Ethics;
- Productivity
- Recruitment, turnover;
- Employee Skills, Competencies and Capabilities and Gaps;
- Employee Engagement
- Cost
How to conduct a Human Resource Audit?
An HR Audit is carried out into 6 steps:
Determine the type of HR Audit
There are 4 types of audits, (i) Comparative Approach Audit (Internal), (ii) Statistical Approach, (iii) Management by Objectives and (iv) Expert Audit (External). However, the type of audit will depend on the requirement of the organisation.
Expert Audit (External) is an audit which is carried out by an individual or company outside the organisation. This approach gives a more objective assessment since the audit is carried out by an external person. Consequently, the solutions can come from a broader perspective and this is type of audit is the most popular.
Collection of data
Data is collected through surveys, questionnaires and interviews.
Analysis of Results
Subsequently, the findings of the audit are analysed and compared to benchmarks to get an insight of how well the organisation’s HRM system, strategy, policies and procedures are doing compared to others.
Feedback
The audit findings with a list of issues and risk assessment are communicated as feedback to management teams and HR departments.
Create an Improvement Plan
An improvement plan based on the findings of the audit is then proposed to management and the Human Resource team. However, at this stage, it is important to include the stakeholders as their participation and collaboration are important for the success of the audit.
Who will be carrying out the HR Audit?
Our Consultants are highly qualified and experienced ISO Certified Lead Auditors.[/vc_column_text]
3 Questions that will help in deciding for a Human Resource Audit
- How do you ensure that you have the appropriate HR Management System, Strategy, Policies and Procedures into place?
- How do you ensure that your people have the necessary knowledge, skills and competencies to make your organisation more competitive?
- Do you have an idea of the level of motivation, engagement, involvement of your employees?
In order to address these questions, DNB HR Associates proposes to conduct a Human Resource Audit based on the following understanding and guidelines.
What is a Human Resource Audit?
A Human Resource Audit is an objective assessment of a company’s HR Strategy, System, Policies and Procedures and highlights areas of improvement. Subsequently, the Auditor proposes appropriate remedial actions.
Benefits of conducting an HR Audit?
- Increases transparency for stakeholders;
- Compares human resource investment with outcomes;
- Develops a strategy for people-led growth;
- Demonstrates compliance with legislations and best practices;
- Evaluates the quality of human resources;
- Implements appropriate metrics to evaluate the HR Strategy
- Recognises the value of human capital;
- Increases level of Employee Engagement;
HR Audit covers the following areas:
- HR Strategy
- Organisational structure
- Organisational culture
- Leadership;
- HR Compliance and Ethics;
- Productivity
- Recruitment, turnover;
- Employee Skills, Competencies and Capabilities and Gaps;
- Employee Engagement
- Cost related to employees
Steps involved in conducting a Human Resource Audit?
An HR Audit is carried out into 5 steps:
First of all, we need to determine the type of HR Audit that we want to carry out.
There are 4 types of audits, (i) Comparative Approach Audit (Internal), (ii) Statistical Approach, (iii) Management by Objectives and (iv) Expert Audit (External).
The type of audit depends on the requirement of the organisation. However, Expert Audit (External) is the most recommended one, as this type of audit is carried out by an individual or company outside the organisation. As a result, this approach gives a more objective assessment and consequently, the solutions can come from a broader perspective.
Collection of data
The second step is to collect data which is done through surveys, questionnaires and interviews.
Analysis of Results
Eventually, the auditor analyses the the collected data, assesses the results and compares it with benchmarks to get an insight of how the organisation’s HRM system, strategy, policies and procedures are doing compared to best practices.
Feedback
Eventually, after analyzing the findings, a list of issues by comparison of their risk and importance are communicated as feedback to management teams and HR departments.
Create an Improvement Plan
Finally based on the findings of the audit, the auditor prepares an improvement plan in order of importance which is presented to management and Human Resource team. However, at this point, it is important to include the stakeholders as their participation and collaboration are essential and determine the success of the implementation plan.