Despite being labelled as a necessary evil; the importance of policies and procedures is greatly underestimated. Their power to govern an entire workforce and shape the structure and identity of the organisation signifies their magnitude. However, they rely on regular reviews and accurate application by both managers and employees.
What is an HR audit?
An HR audit is a highly useful process in identifying the effectiveness of the policies and practices that are in place within the HR function. It also crucially ensures continuing compliance with UK employment law.
Why conduct an HR audit?
With the nature of work and employment law remaining a fluctuating area, it is important that policies and procedures keep up with new legislation and regulations as and when they are implemented.
Employment law has been changing rapidly in the past few years with substantial changes to matters including holiday pay, voluntary overtime and Gender Pay Gap Reporting. The upcoming General Data Protection Regulation, due for implementation in May 2018 to replace the Data Protection Directive, is a further example of how policy and procedure is required to adapt to new mandatory legislation. In this instance, businesses can utilise an HR audit with a targeted focus on data processing practices.
Key benefits of an HR audit to a business include:
- ensuring legal compliance and best practice;
- ensuring policies and procedures are efficient, effective and reflect not just ‘how you do things’, but ‘how you need to do things’ to achieve business goals;
- providing an impact assessment for upcoming changes in employment law and identifying potential future risk;
- benchmarking the organisation against industry norms;
- for due diligence purposes;
- redefining the approach a business takes in times of change; and
- engaging employees in the change process and enhancing communication.
What would an HR audit normally include?
It is important to prioritise, identify and communicate the desired outcomes of an HR audit to demonstrate the value that is expected from the process. The overall strategy of the business should always be at the forefront of any changes, improvements and introductions of new policies.
We would expect a full HR audit to include a comprehensive review of policies and procedures relating to the entire HR lifecycle comprising advertising and recruitment methods, employee files, performance management schemes, pay strategies and exit procedures.
RSM audit expertise
At RSM, our teams of HR and audit professionals regularly undertake compliance, policy and procedure reviews for a wide range of clients across a variety of sectors.
Whether you require an audit of all, or one specific area of HR, our team can support and manage the entire audit process.