HR audits are important for an organization as they are significant management control devices. An HR audit is a process of systematic verification of practices and policies followed by the HR department of an organization. It is basically intended to identify the need for and scope of improvement in the HR functions of an organization. It may not be possible for all organizations to carry out an HR audit by themselves due to various reasons. In such cases, they can approach a human resources consultancy that provides HR audit. Let’s us get an understanding of the types of HR audit that are prevalent.
- Records Audit: HR consulting firms say that companies should take utmost care in maintaining employee records and an audit for this can be really helpful to identify where there is any inefficiency. To carry on this audit, various things are checked like
- Are employees’ files properly maintained
- Are all the documents related to an employee like job applications, job descriptions, signed documents, performance appraisals etc. are being filed and maintained properly.
- Is all the data related to payroll of the employees maintained accurately.
- Functions Audit: An HR consultant may be hired to look at the various HR functions and audit how these functions are being conducted. HR functions audit lays stress on the way HR functions are carried out and if they are effective or not. This kind of audit can be further classified on various aspects.
- Hiring Audits – They focus on the aspect of job descriptions, applications received from candidates, pre-employment screenings and hiring process. These audits confirm if the job descriptions are accurate and include all essential functions related to a job if there is a formal job posting process in place and if the pre-employment screenings are conducted in line with the prevalent regulations. This kind of audit also checks the process followed for hiring an employee like who has a final authority on making a decision, are the references checked etc.
- Payroll audit: By hiring an HR consultant, this can be carried out to check if the organization is paying the minimum wages to its employees and if it is ensuring to pay equally to all irrespective of their gender and community. This also cross-checks if the benefits are being to employees where they are eligible and the employees’ attendance records are maintained appropriately.
- Performance evaluation audit: Human resources consultancy professionals should be consulted if necessary for this type of audit because it is very crucial as it deals with the evaluation of an employee’s performance. Only when performance evaluation of an employee is carried out effectively, he/she will be rewarded or awarded appropriately and it helps in retaining the employee with the company. In this kind of audit, it is examined if a system or practice is in place to evaluate an employee’s performance. This audit also takes care of the practices followed in cases of termination.
- Compliance audit: The name itself suggests how important it is because everyone has to comply with rules and regulations of the land. This audit measures an organization’s levels of compliance towards the state and central labor laws. A compliance audit will also review all the written and unwritten policies and procedures of the organization to ensure that the organization is abiding by all the mandatory requirements.