All You Need to Know About HR Audit Checklists

For your business to effectively undergo change management, you can’t simply take a top-level view of things. You’ll need to understand how it impacts every aspect of your business, from human resources to finances. This is where the HR audit process can be useful. 

The need for HR audits isn’t limited to transforming your business, but also to stay updated with evolving employment laws and procedures. Regularly reviewing and updating your employment policies helps you stay compliant with labour laws and retain happy and satisfied employees. 

When your policies are updated, inclusive and compliant, you’re better prepared to work towards a happier, more satisfied, and more productive workforce. 

Want to learn more about what to include in your HR audit checklist? Elston HR can also assist you with the HR audit process. 

What is a HR Audit?

A HR audit process is a self-evaluation of how your organisation’s HR department is performing. You’ll review your current HR policies, procedures, and systems and make sure that they comply with labour laws. 

Conducting a yearly review of your processes will help you keep your employees satisfied, stay compliant with employment laws, and avoid legal risks. When you understand your current systems inside and out, you can plan more effectively for the future—whether that means improving training, benefits, leave policies or work schedules. 

An internal HR audit checklist includes all the important facets of your human resources policies that will need to be reviewed, from payroll to work mode, data security, benefits, and salaries. With proper planning and tools, following an audit checklist can be an effective HR strategy.

Why is an HR Audit Conducted?

If you’ve ever wondered why HR audits are important, here’s what you need to know. 

Many companies believe that there’s no need for HR audits because everything seems fine on the surface. But without a closer look, you won’t know what’s missing. Skipping audits can leave you blindsided by high employee turnover or a breakdown in key processes.

Here is why HR audits are important for businesses of all sizes:

Compliance

You don’t want to face investigations from labour organisations or legal action over poor workplace policies. An important element of the HR audit checklist is ensuring your staffing policies comply with local and internal labour laws.

Improving Staffing Processes

During the HR audit process, evaluate your hiring, recruitment, onboarding and retention processes. Look for loopholes that you’ll need to address and how you can ensure employee satisfaction and engagement to prevent turnover.

Enhance Data Collection and Security

You should also collect employee input and feedback when you undertake an HR audit process. This data can help you formulate policies and understand the concerns of your staff. 

You should update employee details you might have missed in the past and upgrade your security systems to ensure your company, client and employee data remains safe.

Reduced Cost

Many companies often feel that they’ll save money by not conducting annual HR audits. But in the long run, you end up spending more. 

For example, half your team might suddenly quit because you forced your workforce into working from the office, while the popular opinion was to have a hybrid system. If you’d conducted an audit and updated your policy, you could have saved time, money, and resources that you’ll now spend on hiring and training new staff.

What to Include in the HR Audit Checklist 

Here is a sample HR audit list (you can alter it according to your industry and business requirements):

• Hiring

• Training and Development

• Wages, Hours, and Benefits

• Policies and Regulations

• Performance Management

Hiring

‍This includes everything from the recruitment process and job postings to employee contracts and background checks. Regularly reviewing your hiring processes will help you make improvements; for instance, you can incorporate an ATS to simplify the hiring process.

‍Training and Development

‍Training and development opportunities will keep your workforce engaged, believing that you care about their personal growth, and will also contribute towards the company’s overall success. Reviewing your policies will help you incorporate newer development opportunities for employees of all ranks.

‍Wages, Hours, and Benefits

‍This is an extremely important facet that you need to upgrade regularly. Whether it’s allowing hybrid work mode, offering flexible work hours, or giving gym membership or paid therapy, you need to make sure you’re consistently meeting the demands of the current workforce.

‍Policies and Regulations

‍This includes everything from DEI (diversity, equality and inclusion) policies to sexual harassment policies and compliance with labour laws, industry-specific regulations, and data security. These regulations are constantly changing, and you need to stay updated to avoid facing legal action from government agencies and your employees.

‍Performance Management

‍Performance management includes everything from how appraisals, promotions, and bonuses work to the process of acquiring employee feedback. When you assess these policies regularly, you reduce the chance of losing employees to poor growth opportunities.

‍Contact Elston HR For An HR Audit

‍Now you understand the importance of conducting a HR audit, you might prefer to outsource the job to an expert. At Elston HR, we offer numerous HR-related services to small and medium-sized businesses, including undertaking HR audits.We’ll begin by auditing your current HR process to understand what steps must be taken to ensure your company complies with regulatory requirements. We’ll then provide you with suggestions to upgrade your handbooks and policies and check your processes yearly to determine the effectiveness of the HR audit checklist.We also offer different training and e-learning solutions, including change management programmes, diversity training, unconscious bias training, and much more. Get in touch with us to learn more.