When is the Best Time to Conduct a Human Resources (HR) Audit?

Companies large and small can benefit from an audit of their business practices as they relate to HR. These audits are conducted in order to ensure the company is compliant with local, state and federal regulations and that they are effectively and efficiently utilizing their resources. Audits are important in any company so the question is, “when is the ideal time to conduct an audit?”

Small companies often put basic policies and procedures in place during the early stages, when everyone is extremely busy. These policies and procedures are often quite basic and while they make sense at the time, as the company becomes more productive and stable and reaches its goals with regard to staffing levels they sometimes are no longer the right fit. It is at this time, when a company ramps up and achieves rapid growth that it is a good idea to conduct an HR audit. The HR audit will outline what current practices are compliant and make sense for the company and will also bring to light any practices that need to change.

Often times smaller companies do not employ dedicated HR staff and therefore need to outsource the audit function. Using an outside source is helpful because they have an objective eye and can also help determine if a company needs internal HR support. Having the audit performed by an outside agency can also help a company realize how they should be conducting their HR practices, implement the right practices and discover what is needed to help the company achieve its business goals.

Larger companies, who have been in business for a while, can use the audit process to discover processes that may be working but need to be tightened up. When teams perform the same steps over and over, they may begin to take shortcuts; pieces of the process may get skipped or inadvertently left out. An audit scrutinizes the efficiency and effectiveness of the team and the work. Moreover, larger companies have senior management that they have to answer to and show that they are compliant and working within the guidelines set by the company and by the law. Most large, publicly held companies have a regular audit schedule for their company.

Having checks and balances in place is ideal in almost any situation. These systems allow a company to continue to grow and become more efficient over time. HR Audits are not something to be nervous about. They are simply a process that provides a company with the opportunity to keep current and make certain that its policies and procedures remain fresh and reflective of the goals and values of the organization. Having regularly scheduled audits provide opportunities to improve processes that keep employees, managers and stake holders happy. Does your company perform audits on a regular basis? What are some of the positive outcomes you have seen as a result of an audit?

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