HR Audit Checklist: For an organization to grow consistently, it’s vital to conduct periodic reviews. An audit is an essential component of systematic reviews because it allows you to analyze performance and conduct an in-depth examination of the business process to identify the comparatively weaker points.

Besides, a regular audit diminishes legal issues and ensures that your organization complies with employment and labor laws. While the process may seem intimidating, it will help your company thrive in the long run. In order to help you conduct an HR audit efficiently, we’ll cover how to prepare an HR audit checklist.

But before we get into it, let’s better understand what an HR audit entails.

What is HR Audit?

A human resources audit, or HR audit, is an in-depth review of the policies, procedures, systems, and documents in human resources. Its purpose is to provide recommendations, helping you enhance performance and operations.

In most cases, HR professionals perform this assessment. However, organizations can hire an external auditor to conduct an HR audit.

An HR audit finds the aspects of a company that are going well and those that need improvement. In that sense, it tells you how well your HR department is performing and if the current strategies align with your company’s goals.

HR Audit Types

There are many kinds of HR audits. Possessing a clear understanding of them helps you choose the kind of audit you want to conduct. Keep reading to understand the different HR audit types.

1. Legal Compliance Audit

This is one of the most commonly used HR audits. It correlates HR practices with the legislation and policies of the company. Besides, this HR audit recognizes the ongoing gaps between existing circumstances and prerequisites. That’s not all. It also underlines all the disparities that aren’t working with the rules and regulations.

2. Company Culture

Employee retention is aided by an effective company culture.That is because when employees feel heard, they’re likelier to put more effort into work. But sometimes companies wonder if their present company culture is adequate for their growth. In such situations, a company culture audit enters the picture.

It helps the company see the big picture and allows for some much-needed company trait inspection.These traits include values, hypotheses, standards, and philosophy. Carrying out this analysis lets an organization know if such attributes hamper or benefit their productivity.

3. Health & Safety

This HR audit ensures the good health of employees by taking all the vital precautions. In addition, all the surrounding resources and working environments that are best for an employee’s health are taken into account. It is essential because workers may become vulnerable to many health complications while 

The threat of work-related health hazards is reduced with the help of a health and safety HR audit.

4. Policies 

The HR Policies Audit lets you check the existing SOPs and policies. As a result, it ensures that all the key policies are in place. In addition, this audit sheds light on the complete policy-making procedure. So you can get a clear picture of all the segments of your organization’s policies, including sexual harassment.

5. Strategic Plan

This type of HR audit gets performed when an organization wants to use strategic planning to take critical business decisions. Some examples include restructuring, mergers, acquisitions, and massive company changes.

Having detailed knowledge about the current state of the company is essential when bringing in new changes. A strategic HR audit helps collect, recognize, and examine the company’s important information.

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HR Audit Checklist 

An HR Audit Checklist helps provide a roadmap to your audit. In a way, it shows what essential functions you must review. Thus, it ensures you don’t miss out on anything vital.

You can create a checklist to stay efficient and organized throughout the auditing process. Performing the HR Audit Checklist enhances the chances of employee retention and venture success for long periods of time.

Here’s a list containing detailed questions and statements that apply to different areas of human resources to help you make the most of your HR Audit Checklist.

A. Employee Handbook

  • Ensure that company laws adhere to national, state, and local employment laws. You can do it by having a legal consultant glance over it.
  • It is designed to ensure that there are no gaps in the system during the annual employee handbook review.
  • Make sure employees are properly informed about the changes made to the handbook.

B. Recruitment and Selection

  • Are all job descriptions up-to-date?
  • Do current employees receive information about job openings within the company?
  • Are unsuccessful candidates notified?
  • Is there a standard offer letter?
  • Is there a standard contract that has been verified by the lawyer?
  • Are job applicants’ references checked?
  • Are hiring costs within budget?
  • Is it necessary for applicants to complete application forms for open positions?

C. Training and Development

  • Are employees getting opportunities to develop their existing skills?
  • Are training initiatives within budget?
  • How are supervisors and managers trained in their respective roles?
  • Do workers receive training for new procedures required to perform their job duties?

D. New Employees

  • Are the organization’s policies and procedures applicable in the workplace?
  • Are all procedures and policies communicated and enforced?
  • Are new hires introduced to other employees and management?
  • Are new employees getting an orientation?
  • Is there a designated employee handbook?

E. Health & Safety

  • Are employees working in a healthy and safe environment?
  • What are the specific company’s health and safety policies, protocols, and strategies?
  • Are the policies and strategies for health and safety appropriate?
  • Is the company safeguarding the employee’s well-being?

F. Compensation & Rewards

  • Is the company developing a structure to promote competitive salary packages?
  • Is the company creating a fair system for determining a suitable alternative to a salary increase?
  • Is the company doing enough to remove all pay-related discrepancies due to color, race, gender, nationality, or physical disability?

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Why Is It Important to Have an HR Audit Checklist?

Whether the focus is on performance or policies, using an HR audit checklist helps guarantee that your organization is in compliance with current HR and employment laws.

Besides, it provides managers with a transparent vision of what’s going on in the company. Thus, it enables them to determine the best operations while discovering development opportunities.

You can take care of HR employee tasks like tenure termination, employee onboarding, and performance feedback effortlessly by having an HR Audit Checklist. Plus, you’ll be on top of everything going on in your company and not forget to review key points in the HR audit that would take place.

Checklists like these ensure that your HR audit is carried out thoroughly and methodically so that you have adequate evidence. The auditor can use the HR Audit Checklist as a reference while performing the inspection.

FAQs on HR Audit Checklist

The frequently asked questions on HR Audit Checklist are given below:

What is an HR audit checklist?

An HR Audit Checklist is a list of things an auditor must keep in mind while performing an audit. It helps provide a roadmap to your audit and shows what essential functions you must review. This way, it ensures you don’t miss out on anything vital.

How do you come up with an HR audit checklist?

You can come up with an HR audit checklist by asking yourself some questions about critical areas of the HR department. These include training, development, employee welfare, rewards, and onboarding.

What is the first step in preparing for an HR audit?

The first step in preparing for an HR audit is determining the scope and type of audit. You can browse the various HR audit types and select the one that best meets your needs.

What exactly is an audit checklist?

An audit checklist is a set of specific guidelines and instructions that auditors use to ensure that nothing gets missed on an audit.

What are the components of an HR audit?

The components of an HR audit include documentation, job descriptions, recruitment, selection, compensation, employee benefits, and policies.