WHAT IS THE PURPOSE OF A HUMAN RESOURCE AUDIT?
An HR Audit is an indepth process of reviewing current human resources procedures, policies, systems and documentation used to identify strengths of existing practices and to identify needs for impovement and enhancement of the human resource function. A systematic approach is utilized to ensure compliance with constantly changing and updating of local, state and federal rules and regulations.
SECTIONS OF REVIEW INCLUDE:
- Personnel File Review
- On-boarding Process
- Compensation
- Employee Evaluation
- Termination Procedures
- Documentation Review
A properly executed HR Audit will identify problem areas and provide recommendations and suggestions to the deficiencies. Some reasons to conduct an HR review include:
- Ensuring the effectiveness of existing human resource function
- Reviewing troublesome compliance concerns
- Enhancing a sense of confidence in management and the human resource function
- Creating, maintaining, or enhancing the client’s reputation within the community
- Providing “due diligence” reviewfor investors, owners, and/or shareholders
With a continous increase in government regulation, oversight and enforcement, an employer who chooses to overlook regulatory compliance within their HR functions could face:
- A fine of $1,100 for any violation of the appropriate payment of overtime for non-exempt employees in accordance with the Fair Labor Standards Act
- Fines up to $10,000 per occurence for failing to post required safety notices and/or keeping accurate safety records
- Fines up to $1,000 per employee for non-compliance with the Federal Immigration Reform Act
- Up to $1,000 per mistake penalty for each mistake on I-9 forms (including past employees within retention dates)
Avoidance of costly penalties help define the risk of non-compliance and signify the importance of conducting periodic HR Audits, an audit can also ensure that policies and procedures are fair and are administered consistently across your organization. This will help to increase employee satisfaction and morale, while decreasing turnover rates and reducing the high costs associated with replacing employees.
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