Business today is more complicated, fast-paced, and pressure-filled than ever before. Long gone are the days of 9 to 5, replaced for many of us by the days and nights of 24/7. And just staying on top of things can put a strain on the peace of mind of even the hardiest of business executives.
Especially in small to mid-size companies, most business executives don’t have time to properly focus on HR matters. That’s why an HR Audit (or also known as an HR Assessment) is an essential tool for the peace of mind of almost every executive. An HR Audit is a comprehensive review of all the human resources function in a company to determine if (1) the HR function is in full compliance with all legal requirements (2) HR policies and practices are up-to-date and consistent, and (3) employee relations are handled in a manner that provides optimum value for the employees, management, and ownership of the company.
Here’s what an HR Audit can provide:
The laws pertaining to human resources practices are complex and growing continually more so. There are relevant laws at the federal, state, and local levels that must all be complied with. A review of critical HR risk management areas is a key focus of an HR audit. The following is just a partial list of applicable HR-related laws which have a major impact on businesses just like yours:
- Title VII of the Civil Rights Act
- Age Discrimination in Employment Act (ADEA)
- Americans with Disabilities Act (ADA)
- Family and Medical Leave Act (FMLA)
- Pregnancy Discrimination Act (PDA)
- Fair Labor Standards Act (FLSA)
- And many more
These and other HR-related laws are continually evolving, changing, and being interpreted and reinterpreted by a host of governmental agencies and by the courts. Failure to be in compliance can cost a business thousands of dollars, critical employee morale, and irreplaceable positive reputation in the marketplace. Do you know your critical HR risk areas?
HR Policies and Practices
HR policies and practices are comprised of a vast arena of day-to-day matters and issues which face every company. Questions such as the following must be asked and carefully answered:
- Are employee handbooks and policies and procedures manuals regularly updated to reflect current policy? Do employees sign off on receipt of the employee handbook? Is the proper “at will” language included in the employee handbook?
- What recruitment techniques does the company use and is the employment application form effective, updated, and legal? Are managers and supervisors trained in proper interviewing techniques?
- Are disciplinary matters and employee terminations handled in a fair and equitable manner? Is the proper documentation in place?
- Are employee personnel files and confidential medical files kept in an appropriate manner? Are I-9 forms properly completed, filed and retained?
Failure to follow HR best practices with respect to matters such as these can seriously derail the effective operation of your company and also put your company at significant legal risk.
Some companies take care of the technical side of HR but forget the human side. It is important that companies attempt to reach out to their employees and provide them with a true sense that they are valued and respected and have a legitimate role in the success of the company.
Employees should be provided with opportunities for growth, training, and advancement where warranted. Managers and supervisors must be trained in proper supervisory techniques so as to foster a meaningful two-way relationship with their employees. Three key employee relation questions, among many:
- Is every employee provided with an up-to-date job description and a fair performance evaluation on at least an annual basis?
- Is the opportunity to attend seminars and on-going training provided to employees and is tuition assistance available for post-secondary education, if affordable for the company?
- Is a compensation program in place which awards performance, is competitive with industry and local community standards, and is fairly administered?
Proper employee relations will instill a sense of empowerment in employees which benefits not only the employees, but management and ownership of the company as well.
An HR Audit provided by a competent and experienced consulting firm will carefully evaluate all these areas of the HR operation of your business and provide you with a comprehensive report on the state of your HR function, including recommendations for change where warranted.
And will you, Mr. or Ms. Business Executive, then have peace of mind?
There’s one more thing you have to do: Act on the results of the HR audit! That’s when an HR Audit will bring you true peace of mind, and bring your business ever greater success.