ALICIA KNOWS HR Systems Audit

An HR audit is an objective examination of an organization's HR policies, practices, and procedures. The goal is to identify areas where the organization can improve its HR function, such as by reducing risk, increasing efficiency, or improving compliance.

purpose of an HR audit

Here are some of the specific purposes of an HR audit:

To identify and mitigate legal risks. HR audits can help organizations identify areas where they may be in violation of employment laws, such as those related to discrimination, harassment, or wage and hour compliance. This can help organizations avoid costly lawsuits and other legal problems.
To improve efficiency and effectiveness. HR audits can help organizations identify areas where their HR processes can be streamlined or made more efficient. This can save the organization time and money, and it can also lead to a better overall HR experience for employees.
To ensure compliance with best practices. HR audits can help organizations identify areas where their HR practices are not up to date with the latest best practices. This can help the organization improve its overall HR function and attract and retain top talent.
To gather feedback from employees. HR audits can provide an opportunity for employees to provide feedback on the organization's HR practices. This feedback can be used to identify areas where employees are dissatisfied or where there is room for improvement.

Overall, HR audits can be a valuable tool for organizations that want to improve their HR function and mitigate risk. If you are considering conducting an HR audit, it is important to work with an experienced HR professional to ensure that the audit is conducted effectively.

what will be audited ?

Alicia will interview leaders, managers, and employees as part of the audit process. Below are typical areas that will be covered.

Employee Files for all W-2 employees

The audit will review contents of the employment record. Consideration will be given to privacy laws as to what information is included or excluded from the files. Accurate and detailed records are essential for employers to defend any type of employee claim, particularly unemployment compensation or wrongful termination claims.

I-9 records and EVerify if applicable

Reviews of employer hiring practices often uncover inadequate documentation, such as missing or incomplete Forms I-9. Employers can be fined between $100 and $1,000 for each failure to accurately complete a Form I-9. Fines for these violations can easily add up, with reported cases of repayment totaling over $100,000.

Exempt Employee Classifications

Many organizations have job positions that have been misclassified as exempt from overtime eligibility. The complexity of wage and hour laws and regulations makes it easy to err in classifying a job as exempt, thereby exposing the employer to liability for past overtime.

Hiring Process and Orientation

The audit will review the organization's hiring process, including job postings, screening candidates, and HR orientation.

Onboarding

The audit will examine the process that happens during the first 90 days and possibly up to the first year of employment to fully indoctrinate new employees by both their managers as well as Leadership.

Leaves of Absence, Attendance Policies and Tracking

Controlling excessive absenteeism is a big concern for most employers. The complexity of leave laws, with sometimes conflicting state and federal protections, has made many formerly acceptable absence control policies unacceptable. Organizations may have attendance policies that do not comply with relevant laws and regulations or that grant employees more protections than required.

HR Related Procedures, Policies, and Processes

The auditor will review procedures followed by staff administering HR related processes. Additionally, they will speak with staff to determine if written procedures are being typically followed in reality. This will also include any company-wide policies that touch HR.

Employee Handbook(s)

The audit will include a thorough reading of the handbooks that are distributed to employees to seek out inconsistencies or old information as well as possible conflicts with regulations. Additional suggestions may include ways to make the handbook more user friendly or just more friendly in terms of wording.

Applicant Process and Tracking

The auditor will review how applicant data is organized, stored, and shared with hiring managers. It will also determine how applicant outcomes are recorded with an eye on equal employment opportunity.

Job Descriptions

Job descriptions are often created at different times and may contain inconsistencies or old terminology. Additionally, they can contain items that are no longer allowed. Consistent formatting and contents will be recommended.

Required Postings

The audit will review how information is posted and shared with employees as required. Hard copy and electronic media will be included.

Time Records including Overtime Payment Compliance

Employers typically require nonexempt employees to punch a time clock or complete time sheets reflecting their time worked each week. The records generated by these systems typically are the employer's primary means of defense against wage and hour claims, so time-keeping policies and practices must be clearly communicated and consistently administered. Overtime payments can be confusing when employees have alternate pay arrangements such as incentive or bonus programs.

Training and Development

The audit will review the organization's training and development programs, including how needs are assessed, how training is delivered, and how the effectiveness of training is measured.

Employee Safety & Health

The audit will include the organization's Safety and Health program and communications. Safety and health programs help businesses prevent workplace injuries and illnesses, improve compliance with laws and regulations, and reduce costs, including significant reductions in workers' compensation premiums.

Performance Measurement

The audit will review the organization's performance management process, including how performance goals are set, how performance is evaluated, and how performance feedback is given.

Disciplinary Actions and Terminations

Disciplinary actions and terminations are a large area of risk exposure for most employers. Is the goal of the system to punish or give opportunity for improvement? Are issues documented

HRIS System Compliance

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Incident Tracking & OSHA 300 Log if applicable

Benefits and ACA Compliance

The audit will include reviewing benefits offerings as well as all requirements under ERISA and ACA, including required notices.

Compensation

The audit will include a basic review of the organization's compensation processes including how salaries are set and how compliance with employment laws is ensured. A larger compensation audit may be recommended based on findings of concern around inconsistencies or imbalances.

Employee Relations and Culture

The audit will review the organization's employee relations practices, including how complaints are handled and how investigations are conducted. There will be a small amount of inquiry into company culture. If you think that may be an issue, we can contract for a more in depth dive project in the future.

What to expect

A comprehensive audit is a time-consuming and intensely focused project that may require the review of numerous documents and policies, as well as soliciting feedback from HR staff, selected employees and managers from other departments.

outcome

The expected outcome of an HR audit will vary depending on the specific goals of the audit. However, some common outcomes include:

Identification of areas where the organization's HR policies, practices, and procedures are not compliant with employment laws. This could include areas such as discrimination, harassment, wage and hour compliance, and recordkeeping.
Identification of areas where the organization's HR processes are inefficient or ineffective. This could include areas such as hiring, onboarding, performance management, compensation and benefits, and employee relations.
Recommendations for improving the organization's HR function. These recommendations could include changes to policies, procedures, or processes, as well as training for HR staff.
A report that summarizes the findings of the audit and provides recommendations for improvement. This report will be provided to the organization's management team.

In addition to these specific outcomes, an HR audit can also provide the organization with a number of other benefits, such as:

A thorough audit can help to identify and mitigate risks, improve efficiency, and ensure compliance with employment laws. This can give management and employees alike greater confidence in the organization's HR function.
An audit can provide an opportunity for employees to provide feedback on the organization's HR practices. This feedback can be used to identify areas where employees are dissatisfied or where there is room for improvement.
An audit can help management to better understand the organization's HR function and how it can be improved. This can lead to more informed decision-making and better outcomes for the organization.

If you are considering conducting an HR audit, it is important to work with an experienced HR professional to ensure that the audit is conducted effectively. ALICIA KNOWS can provide an objective and independent perspective, which can be invaluable in identifying areas where the organization's HR function can be improved.