The HR Audit

Human Resources is a necessary part of doing business today. Companies have found that implementing human resources to their day to day business can help minimize employee issues before they become a problem. Human Resources can promote longevity in your employees by helping them feel valued and give them an understanding of what is expected of them and what they can expect from you as their employer. If you are a small company chances are that you don't need a full time HR person or even a part time human resources person. However, every company needs some sort of HR support. This can come from an outside HR consultant or someone on your staff that can be trained in HR and can perform two sets of duties. For example many small companies blend their accounting position with HR. You will need to determine what level of HR support is appropriate for your company. This person, if internal, should know what they don't know about HR so you don't create greater liability. One of the most effective tools to helping companies evaluate their HR needs is a tool called an HR Audit. This is an audit that can apply to every company. It examines your current HR practices and identifies the areas you need to work on or implement. There are 250+ items on most HR Audits that range from your legal obligations to employees to other HR practices that are not necessary from a legal standpoint but will help you develop a strong company culture and employee loyalty as well. The audit is a step by step guide that will ensure you are up to date and inline with current HR practices both legal and non-legal. You don't need a full fledged HR department to conduct this or even a full time HR person, but you will need to hire someone that is a HR professional to conduct this for you. The audit will make it very clear to you what you need to change and comply with. It takes the confusion out of employment law and will ensure that you know what action steps to take to meet your legal requirements. Too often companies don't know what they need to comply with until it is too late and they have some type of suit pending. It is critical that you protect yourself and your employees.

Compliance with the law is what you are responsible for legally. There are many different aspects to compliance and many employment laws that must be followed in order to protect your company. An HR audit can help you address issues such as; Record Retention, Posting Requirements, Exempt versus Nonexempt, I-9 compliance, are to name a few These laws can be confusing and intimidating but if you have an audit to clearly state your responsibility it becomes less daunting. For example; many companies are unaware that they need to keep employment applications for 1 year or that attendance and compensation records must be kept for 3 years. Companies also miss posting requirements that they need to comply with such as having the state and federal postings for Equal Employment Opportunity, OSHA and the Family Medical Leave Act postings.

There is also an element to the audit that is not linked to employment law but is linked to employee satisfaction. Employees want their employers to be consistent and fair. They are typically okay with having rules and guidelines as long as they know what is expected of them and their peers. Implementing the audit will help you be consistent across the board. You will create a culture that is standardized. You will be able to manage your employees more effectively, reward your good performers and manage out your poor performers in a legal and documented way. An audit can help you introduce standard HR business practices. Consistent rewards and recognition programs and standard employee orientation programs can help you build your team by boosting employee's satisfaction and therefore cultivating their loyalty. The audit addresses several other HR business practices that can be helpful to your business. Analyzing labor turnover will help you understand where your weaknesses are and will help you focus more on those areas. Another helpful policy is to develop a system tracking vacation/holiday/sick time that includes how employees get approval for time off and how it is documented.

Conducting an HR Audit will be a helpful and tangible tool for your company. It will help simplify the world of employment law and will make it easier for you to manage your employees. It will help you understand where you need consistency and policy in place. Next month we will be talking about a critical follow up to the HR Audit; developing a handbook. We will discuss the importance of having a handbook in order to ensure that your employees know what is expected of them and having written consistent policies in place.

Published Tuesday, September 05, 2006


