What is an HR audit?
An HR audit is a process of reviewing internal policies and procedures to ensure they remain compliant with current legislation and to ensure that they remain fit for purpose. Having an engaged and motivated workforce is key to a business’s success and therefore, it’s important that employees have up to date and useful information regarding their employment and the business. This will also support managers in understanding how to manage employees fairly and consistently which will create efficiency and reduce risk for the business. Therefore, HR audits are a worthwhile and valuable process for employers to carry out.
An audit will not only review written policies and procedures but it can also look at systems and unwritten practices that may have developed over time. Audits are often conducted on an annual basis but they could be carried out more frequently if required.
How to conduct an HR audit
So, how do you carry out an HR audit? Audits should consider the full range of policies and procedures within a business in addition to any contractual documentation, sometimes gathering this information can be the first hurdle. The first step would be to consider where data is stored such as an employee handbook, policies and template contracts and file this in a logical order for review.
Once all the written documentation is available, it’s usually helpful to work through them in line with an employee lifecycle. For instance, when a vacancy arises, what is the internal process for recruitment? Are there any recruitment policies? Who is responsible for placing advertisements and drafting job descriptions? This would then naturally progress to making an offer of employment, considering the reference request process, conducting right to work checks…
Once you begin an audit it can become overwhelming but that’s where it can be helpful to break it down into sections. We would recommend the following areas of focus, however, some organisations may have additional specific policies to be reviewed:
- Recruitment and selection
- GDPR
- HR files and storage
- Health and safety
- Right to work checks
- Induction
- Contracts of employment
- Employee handbook and policies
- Training and development
- Performance management
- Capability
- Grievance
- Disciplinary
- Reward and recognition
- Exit procedures
Whilst reviewing the documentation available to you, take the opportunity to consider whether any updates are required to ensure they are legally compliant, reflect best practice and also to ensure they reflect the current state and culture of the organisation.
With this in mind, it is also important to consider where your current policies and procedures may not reflect the current practice. To identify any inconsistencies, it is recommended to seek the views of employees and managers who hold responsibilities in each of the policy areas. This will enable you to gain their perspective on the accuracy of your policies and procedures, as well as whether they feel any improvements could be made, and to include their thoughts in your review.
Alongside the audit of documentation, it is advisable to also undertake an audit of employee files, reviewing what is and is not included, to enable you to prioritise any actions required based on this. For example, is there a signed contract of employment and verified right to work check? If not, these should be addressed as a priority.
Output
So, once an HR audit has been conducted and you have identified areas that need to be addressed, we recommend that you prioritise the actions to firstly focus on legal compliance. And, for those areas which are medium to low priority, you can set a timescale in which these can be addressed.
Help with your HR audit
We hope you found this useful, we understand that HR audits can be complicated and time consuming. However, Fitzgerald HR can support you with carrying out your HR audit. Additionally, we include an HR audit as part of our Plus Client Membership plan. If we can help, please contact the team on 0330 223 5253 or office@fitzgeraldhr.co.uk, we would love to hear from you.
