1. Human Resource Auditing

2. Purpose
The purpose of a Human Resources audit is to assess the effectiveness of the Human Resources function to ensure regulatory compliance.
To look for potentially serious problems (time bombs)
To find areas needing improvement
To document processes for use in merger, reorganization or inspection
To address compliance issues

3. In brief: to evaluate and improve your HR practices in:
Staffing
Compensation and Benefits
Performance Management
Employee Development
Employee Relations
Safety
Reporting and Recordkeeping

4. Benefits Creat an HR business plan Streamline HR work processes
Monitor compliance with established regulations and procedures
Develop user-friendly HR systems

5. How Interview key staff Review relevant documentation
Help you complete a comprehensive questionnaire
Compile data a prepare and customized written report
Make specific recommendations to improve the efficiency and performance of your HR function

6. Data What do the written policies and procedures say?
What do the HR managers say?
What do the line managers say?

7. Examples of data
Hiring statistics (acceptance rate, hiring rate, hiring projections)
Turnover
Compensation and benefits philosophy and practice
Exit interview summaries
Employee complaints (discrimination, harassment, safety, other)
Promotion and advancement practices and trends
Human Resources budget and expenditures

8. Interviews Perceptions of the company and its goals
Strengths and weaknesses of top management
Employee perceptions of the company and top management
Relations with subordinates
Support of career goals for self and employees
Major Human Resources issues
Which Human Resources functions work well
Which Human Resources functions need improvement

9. Conduct the Regulatory Compliance Audit
Personnel files and record keeping (contain only job related information)
Pay equality
Job descriptions (ADA compliance)
Health and safety
Equal opportunities and positive action
Forms (applications, internal forms, etc.)
Legal reporting
Policies and procedures

10. Recruitment How are candidates sourced? How are candidates selected?
Are legal requirements met?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

11. Compensation and Benefits
What are the different policy groups (e.g. management, clerical, union)?
How is base pay policy set?
What grading/job evaluation systems are used?
Are there up-to-date job descriptions?
What variable pay practices are in place?
How are pay increments decided?
What is the benefits plan?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

12. Workforce Review Are there any critical skills shortages?
Are there any critical succession issues?
Is there anything unusual in the distribution of worker age, gender etc.?
What workforce planning processes are used?
What succession planning processes are used?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

13. Training and Development
How much training is given?
How is the training program managed?
Are there any staff development programs?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

14. Industrial Relations What unions exist and what jobs are covered?
What collective agreements are in place, when do they expire?
How many grievances are there per year?
Are there any outstanding grievances?

15. Legal
Are processes in place to manage compliance issues for all relevant jurisdictions?
Is there any outstanding litigation?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

16. HR Technology What technology is installed?
How up-to-date is the technology?
Is the data clean?
Are there any important technology projects in progress?

17. Strategic HR Where does the most senior HR person report in to?
How much interest does top management have in HR issues?

18. Some Other Audit Techniques to Consider
Audit of corporate culture.
Competency audit of HR staff.
Metrics based audit using metrics such as those proposed by the Saratoga Institute.
Audit of customer satisfaction with HR.

19. Any Questions?