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What Is Examined During an HR Audit?

An HR audit is an in-depth examination of a company's human resources functions. The goal is to assess how well the company meets its HR goals and identify any areas that need improvement. To ensure that your company receives a thorough and accurate HR audit, here are the key areas that should be examined by an HR professional.

1. Employee files

Employee files are one of the critical areas of focus during an HR audit. The auditor will review the contents of employee files to ensure that they are complete and up to date. In addition, the auditor will examine employee records to verify that the required documentation has been collected and maintained. If any of these items are missing or outdated, it can create problems for the company. For example, if an employee is promoted without having a current performance review on file, it could create legal issues if the employee later files a discrimination claim. All employee files must be kept up to date and complete.

The auditor will also take a close look at the company's payroll records. This includes verifying that employees are being paid correctly and on time. In addition, the auditor will ensure that all required deductions are being made from employee paychecks.

2. Compliance with all applicable laws and regulations

A Human Resources audit examines a company's policies and practices to ensure compliance with all applicable laws and regulations. This can include employment law compliance, benefits administration, hiring, firing, discipline, and discrimination. In some cases, the audit may also reveal opportunities for improvement in HR policies and procedures. In addition, the auditor will interview employees and managers to understand better how the policies are being implemented. This helps to identify any areas where the company may be out of compliance.

3. Performance reviews

This will help identify any potential issues with hiring practices, compensation, and employee retention. By looking at performance reviews, you can get a better idea of how well the organization is doing to meet its goals and objectives. Additionally, looking at an employee's performance over time can help identify any trends that may be developing.

4. Job description

As part of an HR audit, employers should review job descriptions to ensure that they accurately reflect each position's actual duties and responsibilities. This is important for several reasons:

  • Accurate job descriptions can help to prevent misunderstandings between employees and their supervisors.

  • They can help ensure that employees are paid the correct amount for their work.

  • They can help identify any positions that may have become redundant or obsolete over time.

  • Accurate job descriptions can serve as a valuable tool for employee development and training decisions.

5. Succession planning documents

As the workforce evolves, it's more important than ever for organizations to have a succession plan in place. A succession plan ensures that there is a pipeline of talent ready to step into critical roles when needed. It can also help to prevent disruptions during periods of transition. When conducting an HR audit, one of the things that will be examined is succession planning documents. The auditor will want to see evidence that the organization has a process to identify and develop future leaders. They will also assess whether the succession plan is aligned with the organization's strategic goals.

Bottom Line

By having a professional take a close look at these key areas, you can gain insights into the health of the organization's Talent Management program. Additionally, you can identify any areas where improvements may be needed. With regularly conducted HR audits, you can help to keep your organization running smoothly and efficiently. Get started today by scheduling your free consultation with 1921 Consultants!


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