HR Audit Checklist in Excel

An HR audit is an annual practice designed to assist companies in improving their policies and performance while meeting all employment laws.

HR audits are time and resource intensive processes, but are an integral component of any company. Here are some tips for conducting an effective HR audit.

1. Pre-Audit Phase
An HR audit is an assessment of a company’s policies and procedures to assess whether they comply with industry standards. A human resource audit can be an integral component of doing business as adherence to industry standards allows you to transact more easily with other companies while meeting regulations protects against regulatory penalties for your own.

At this phase, auditors gather information from sources like client processes and documents, previous audit reports, employee surveys and employee interviews in order to identify areas of interest during an audit. Auditors may also interview staff in order to obtain additional data or verify its accuracy.

Standardizing your audit process reduces risk and ensures maximum return from each audit. Step one of this process should involve determining which standards you wish to meet as part of this audit; step two should include outlining its scope and creating an audit plan.

2. Audit Phase
An HR Audit is conducted to ensure that the company’s human resource processes are functioning in accordance with company standards, such as recruiting, training, employee retention and performance management. Auditing various aspects of this department such as recruitment, training, employee retention and performance management undergo inspection to make sure everything is in order.

An HR audit starts with planning and information gathering. This generally involves interviews or engagements with staff members and management in order to gain a comprehensive knowledge of department policies, internal processes, and system of internal controls (known as fieldwork).

At this phase, any identified issues are documented and prioritized for immediate resolution, helping prevent legal implications and misstatements on company financial reports (e.g. misclassification of exempt versus non-exempt jobs; prohibited attendance policies; form I-9 errors). It also allows companies to identify any risks associated with certain processes or areas.

3. Post-Audit Phase
The post audit phase involves analyzing collected data to identify areas for improvement. This may involve reviewing policies, processes, procedures, documents, records and data before conducting an assessment and report with both positive and negative findings.

An audit’s first stage typically includes meeting with client to review management objectives and scope, risk evaluation and internal control components of process as well as create draft narrative or flow chart to validate by subject matter experts and other stakeholders.

An HR audit is an inspection performed to assess all HR attributes within an organization to ensure they work harmoniously together and comply with company standards. An effective human resources audit can mitigate future risks and protect businesses from unexpected limitations in the future.

4. Reporting
Once the auditing process is completed, HR team will produce an internal report with their findings. This report should emphasize areas for improvement while outlining future audit plans. Issues identified during HR audits must be escalated immediately so as to prevent legal ramifications or SOX findings that lead to misstatements of company financial reports.

HR audits offer organizations an opportunity to streamline processes related to employee retention, performance evaluations and leave policies so that regulatory compliance is met efficiently and on time. HR audits typically cover topics ranging from ADA/FMLA regulations through payroll and form I-9 requirements – providing HR professionals with valuable tools for increased operational efficiency and business results.