HR Audit

HR AUDIT

Human Resources Audit

Introduction to The Human Resources Audit

The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organization’s HR functions. The purpose of the audit is to reveal the strengths and weaknesses in the nonprofit’s human resources system, and any issues needing resolution. The audit works best when the focus is on analyzing and improving the HR function in the organization.

The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are missing or need to improve, but it can’t tell you what you need to do to address these issues. It is most useful when an organization is ready to act on the findings, and to evolve its HR function to a level where its full potential to support the organization’s mission and objectives can be realized.

Who should conduct the audit?
The team that is responsible for the audit should represent a cross-section of the organization’s staff, including line staff, middle and upper management, and those responsible for HR functions.

How should it be conducted?
The audit process consists of a series of questions covering the eight primary components of the HR function:

Roles, head count, and HR information systems (HRIS)
Recruitment
Documentation
Training, development, and career management
Compensation and benefits
Performance measurement and evaluation
Termination and transition
Legal issues and personnel policies

The team works to collect information to answer the HR audit questions in each of these categories. The focus is on how these activities and tasks are actually performed in the organization. The first step is to collect all the pertinent information. The process of getting information, in and of itself, can be quite informative.

How are needed improvements identified?
Once information is gathered, the audit team reviews each major section and notes disparities between paper (what we think or say we do) and practice (what we actually do, as revealed by the answers to the audit questions). This can then be compared to best practice (what we should do to best support our organization’s mission).

A cautionary note: Finding out what is insufficient and inadequate is the first step toward improvement. If deficiencies are identified, it is important to take steps to correct those deficiencies. Organizations should take that first step only when they are ready to act on the findings, and to make necessary improvements in their HR skills, processes, and systems.

How is follow-up and correction done?
Improving the HR system takes some time. A workplan — with a timeline, accountability, and deliverables — should be created after the team reviews the completed audit and identifies areas where improvement is needed. Follow-up and review should be a regular management function, performed on an ongoing basis.

HR AUDIT Human Resources Audit

HR AUDIT

Human Resources Audit