When organizations come to Employers Council with questions about outsourced HR services, they sometimes aren’t sure what help they need. They might be a growing business ready to build their first HR department. They might be transitioning between HR leaders and questioning what systemic changes could be made. They might be experiencing compliance issues or complaints of burnout and want to get to the problems’ roots.
Fortunately, we have a tool designed to clarify HR confusion: HR audits are in-depth reviews of human resources functions, policies, and practices. They come in a few different forms (see discussion below) and have multiple benefits. HR audits can help organizations of all flavors and sizes:
Implement HR best practices
Employers Council consultants eat, sleep, and breathe human resources. They know what current practices are serving departments well and what challenges are brewing ahead. Working with a consultant on an HR audit can bring your own department up to speed and ready for the future.
Stay in compliance
Managing risk and following all human resources and employment law requirements is a never-ending HR task. An HR audit can help departments ensure they are compliant, including Fair Labor Standards Act (FLSA), Continuation of Health Coverage (COBRA), Federal Immigration Reform Act, Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA) and other complex regulations.
Uncover blind spots
HR audits are an excellent way to find out what you don’t know. For example, many organizations don’t pay enough attention to records retention policies. Not disposing of unneeded records can actually carry a compliance risk! HR audits can alert departments to areas that demand more focus.
Level up a particular HR function
Sometimes HR departments have a known knowledge gap or want a check-up on one specific function. HR audits can be tailored to those needs, including audits on employee files, I-9 documentation, or benefits administration, for example.
Demonstrate due diligence
Finally, HR audits can help leaders, shareholders or potential investors feel confident that the organization is operating at a high level.
Types of HR Audits
There are three types of HR audits to meet different organizational goals:
Comprehensive HR Audit
A comprehensive HR audit looks at the complete scope of HR functions. Two Employers Council consultants interview key staff and review:
- Organization demographics
- Employee files
- Including file structure, form and documentation reviews, and record retention
- Pre-employment screening and selection
- Including background reference check procedures, Equal Employment Opportunity Commission (EEOC) compliance, and more.
- Regulatory reporting
- Including state and federal agency requirements and workers compensation documentation
- Wage and hour
- Including federal, state, and local regulations; FLSA; Equal Pay Act compliance; and more
- Benefits administration
- Including COBRA, FMLA, benefit plan documentation, and more
- HR administration
- Employee handbooks, posters, policies, and more
The consultants provide a final report, usually 80 to 100 pages long, highlighting what processes are working and which areas need improvement. They recommend concrete next steps and best practices to address any problems.
Desk HR Audit
Organizations looking for a faster, less comprehensive check-up can request a desk HR audit. This more streamlined process looks at the department’s basic practices, including:
- Personnel files
- Recruiting and staffing
- Regulatory reporting
- HR administration
The final report is shorter (18 to 20 pages) but still gives the organization a heads up on potential problem areas and how to fix them. Alternatively, Employers Council can complete a tailored desk HR audit to cover a specific HR function or area of concern, including employee files, I-9 documentation, and benefits administration.
Working HR Audit
Working HR audits are more open-ended and solution-oriented. An experienced consultant embeds with your organization’s HR to not only conduct a thorough audit but also correct problems they find along the way. Instead of a report, the consultant works with your staff to implement best practices as you go. This can be an efficient, effective approach for organizations in need of an human resources overhaul.
Curious how you can improve your HR policies, process and practices? Talk to our HR consultants about which HR audit is right for you.