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Your people are the backbone of your business. Their performance has a direct impact on the performance of your company. So planning and delivering a good HR strategy is essential – not just in terms of the working lives of your employees, but for the success of your business as a whole.

As well as this, HR are involved in maintaining policies and procedures, other company documentation and personal records of our employee workforce.

Undertaking a ‘stock check’ of where you are in terms of the above, where you want to be and where you need to be in terms of employment legislation together with custom and practice of what actually transpires in the business is therefore crucial.

HR audits are used to assess the compliance of your HR policies and procedures. They can diagnose issues before they become real problems and help you find the right solutions. But HR compliance audits can be used for more than just defining risk. They can be used to identify what you are doing right, help you improve inefficiencies, and reduce costs. An HR compliance audit can help you see how HR can better support your overall goals to build a better business.

A HR audit: 

  • Protects you and mitigates risk to your business and bottom-line
  • Ensures you are up to date, compliant and performing/following  best practice
  • Shifts the focus to a more HR strategic level – aligning activity to overall business objectives
  • And, identifies specific areas where improvements have the most positive impact
Audits can help you accomplish a variety of objectives, such as ensuring legal compliance; identifying gaps in processes and skills, helping maintain or improve a competitive advantage; establishing efficient documentation and technology practices; and identifying strengths and weaknesses in training, communications and other employment practices.

They can also act as a reminder of the tasks which may be on the “To Do List’ but need bringing to the forefront as a priority. In essence an audit of compliance will reveal your gap analysis and inform your action plan.
 
The audit will assist in uncovering some of the common questions such as:-
  • Do you have any missing or outdated policies or practices?
  • Is your employee handbook comprehensive and up to date?
  • Are your HR policy issues and procedures been communicated to management and employees?
  • Are expected employee behaviours stated in company policies?
  • Are policies regarding discrimination and harassment explicitly stated

By carrying out an audit, you can easily and accurately get a true and thorough picture of the effectiveness of your HR systems, policies and procedures and where to make improvements to maximum effect.

Typically, a HR audit will initially focus on the following areas:

  • Legal compliance
  • Record-keeping in line with Data Protection legislation
  • Performance appraisal systems and documentation
  • Policies and procedures/employee handbook
  • HR forms, such as employment application, disciplinary notice, time reporting documents, requests for training

To help you get started, we’ve put together a checklist to help you think about and gather the information you need to review and begin making improvements where there needed most. 

Your HR Audit Checklist

HANDBOOK & REVIEW
1. Do you have a staff/employee handbook and a manager’s handbook?  
2. Are the managers trained on the contents of the handbook, policies and procedures?  
3. How are updates and changes to the handbook and policies communicated? 

CONTRACTS OF EMPLOYMENT
1. How many different contracts of employment are used?
2. Have any contractual terms and conditions been recently updated?

POLICIES & PROCEDURES
1. Are there specific policies in place and when were they last updated
2. Is there a standard suite of letters for the procedures?

EMPLOYEE RELATIONS - DISCIPLINE & GRIEVANCE
1. How many disciplinary or grievance issues have you had in the last year?
2. Have you had any tribunal claims in the last 5 years?

DATA PROTECTION & STORAGE
1. Who in the Company is appointed to be the company's representative for the purposes of data protection?
2. What personal information is currently held? 

3. How are the employee's personnel files stored and arranged?

RECRUITMENT, PERFORMANCE MANAGEMENT & RETENTION
1. Do you have an application form for job roles and are job descriptions available for all positions?
2. Have you carried out a job analysis to identify the qualities, skills, abilities, and knowledge needed for the positions?
3. Are exit interviews conducted and by whom?

RECRUITMENT 
1. Is there a formal process in place for identifying job vacancies? 
2. Is recruitment linked to human resources planning (projected workforce requirements) or is purely reactive to replace existing employees?
3. Does your organisation measure the effectiveness as well as the costs of these recruiting sources? 

SELECTION 
1. Who participates in the selection and interviewing of staff?
2. Does the company use standardised forms for the interview and selection process?
3. Are hiring managers trained in objective selection (e.g., interviewing techniques, position-related questions and legal implications)?
4. How many candidates are typically interviewed before filling a position and at what levels? 
5. Is adequate testing and/or background checking done before extending an offer to ensure the person has the appropriate skills and knowledge?
6. Is there a clear process in place for notification of candidates (successful and unsuccessful)? 

INDUCTION
1. Do you have a standard induction procedure and if so how frequently do you review it?
3. Do you have a checklist which is signed/dated by new employee and individuals undertaking the procedure?
4. Do you have an induction handbook or guide?

ATTENDANCE MANAGEMENT
1.  Does the company have a high level of absenteeism?
2.  Are any necessary and remedial actions towards reducing absenteeism taken in a timely and consistent manner? 
3. Are absences recorded and monitored?
4. Are return to work interviews held?

PERFORMANCE MANAGEMENT
1. Does you carry out staff appraisals?
2. Do you use standard appraisal template documents?
3. Are appraisers trained?
4. Do you audit to assess consistency in the appraisal interviews?

"One thing that positions Make UK above the rest is their team of lawyers and HR professionals. Their support, down to earth approach and openness has meant we have a great partnership and a level of trust we wouldn’t have with any other organisation."

Suzanne Gordon, Co-worker Relations Manager UK & IE, IKEA Ltd

 
For many businesses starting with a HR audit can be the essential ingredient when determining the how, what, where and when to effectively managing the workforce and instrumental in managing the day-today and when planning major organisational change programmes. 


Our team of barristers, solicitors and HR professionals provide all the advice and guidance you need to help you and your business thrive. If you would like to discuss your auditing needs or would like to know more about the support, Call us on 0845 293 9850, or email [email protected] 

Find out more about how we can help here

 
 
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