Human Resources Audit- Shape Your Tomorrow, Today!

Human Resources Audit- Shape Your Tomorrow, Today!

February 14, 2020

H R Audit- The first step you should take for better functioning of your company Different aspects of business keep changing rapidly. Sometimes, HR may lose track, and that’s the peak time to make a call for HR Audit.

Once late Lee Iacocca said, “Management is nothing more than motivating other people.” However, I beg to differ here. I have my own views about management and would wish to explain my ideology with the help of examples.

Foreign companies operating in China are in trouble. Conducting internal investigation and encountering a potential labor dispute are becoming difficult for them.

In the UAE, any violation related to visa, payroll, gratuity, work culture, annual benefits, and working

hours have heavy fines. Hence, it is advised that all these aspects get audited. This will avoid backlashes arising from not being compliant with laws related to human resources.

Why HR Audit when Human Resources Management Software (HRMS) is here for help?

Once I attended a meeting where CEOs and Finance managers of multinational engineering companies

were present. There, an obvious question was raised- “When HRMS is available, then why is there a need for HR Audit?”

To this question, I readily answered- since the way of working, business goals, and compliance, keep evolving all the time, the software won’t be able to match with the market challenges. The gap in

management, understanding, leadership, and doing work are also not the same. Therefore, HR Audit is necessary.

There could be instances when you even need to pay the penalties. If it happens multiple times, that will be harmful to the company’s productivity as well as the reputation. Besides that, it won’t streamline the different management techniques, which different employees would be following for performing an activity. In addition, an HR audit will even save the amount you may need to pay for the fines when found non-compliant.

What a proficient HR Audit must include The HR Audit services must cover all the aspects of human resources and find out whether they are

efficiently implemented in a company or not. However, on many instances, audits often focus on specific areas of human resources.

As per my experience in the HR industry, I have listed below what all aspects that an HR audit must

cover. Do share your views about this list, and you may even contribute to make it better. Like a financial audit, HR Audit is comprehensive too. The audit review includes but is not limited to the following    

points:

Organogram Gradation

Department infrastructure

Compliance with local employment laws

                 

Recruitment and selection processes Employment-related tests

Employee relations & participation Performance-evaluation processes Promotion

Documentation (including employee handbooks) Job description

Personnel’s records and files

Benefits and administration practices Benefit costs

Timekeeping and pay practices

Recordkeeping and posting practices Record validation

Policies and violations

Training and development Technology adoption Safety and security Areas of exposure

The process of an effectual HR Audit:

1. Gathering information of various attributes of the HR department to determine compliance, effectiveness, costs, and efficiency.

2. Evaluating the gathered information and preparing a written report.

3. Creating an action plan based on exposures, priorities, and a timeline for instituting changes.

4. In order to reduce exposure to legal liability, some changes will need to be implemented immediately, while others can be introduced in three to six months.

Direct benefits of HR Audit:

1. Helps to adjust policies and practices.

2. Provides control on each Human Resources Management (HRM) function.

3. Eases the cooperation between the management and staff.

4. Expresses progress against the objective.

5. Detects the weak areas of HRM.

6. Keeps the policies and practices updated.

How to simplify the HR Audit process?

1. Create a process-sheet having a checklist containing HRM attributes and tick mark them if they are functioning well.

2. Create an action-sheet defining a clear way of what actions should be taken on which areas of human resources department.

3. The result-sheet defines a clear outcome of the changes done on various aspects of HRM with the help of HR Audit.

Overall, the HR Auditing is the key to remain compliant with the labor laws, maintain the required

workflow, build a good company reputation, and retain the employees. You can also check my article on employee retention by clicking this link.

Furthermore, I want to let you know that N R Doshi and Partners provides HR audit services, which will

help you to streamline all the functions which are discussed in this article. You can reach us out anytime,

and we will make sure you get better than the best HR Audit services in the UAE you have found till now.