HR Audits: The Power of Review
The value of HR audits and key areas of focus.
A Step in the Right Direction
Your business is an ebb and flow of information, data, and of course the products or services you sell or provide. As busy as you are, reviewing your HR practices and compliance requirements could be on the back burner. However, there are two primary reasons for an internal or outsourced HR audit—ensuring your company is following state and federal labor laws and identifying any missing pieces in your HR practices. Failure to follow labor laws is risky and can leave you with significant fines and penalties, ultimately having a major impact on your business and operations. At Thrive HR Management, we can guide you through the audit process, or we can provide HR Audit services to you.
How and When to Audit
It’s best to review your HR files and practices at least annually, or when you have a major company change like administrative turnover. You can perform a mini audit by checking 10% of your files (say employee files). If everything is in order, your documents are likely in good shape. If you find anything amiss, it’s time to dig deeper.
When you perform regular audits, you can identify trends or employees that may need support to complete HR tasks. Either way, auditing your files and practices is key and will help your business THRIVE!
Employee Documents, Sure. What Else?
An HR audit should include key compliance areas, like Form I-9 and labor law posters, but also some items you may not have considered, like the questions to ask (or not ask!) in an interview. Some key HR audit items could be contingent on compliance regulations, such as employment classifications under the Fair Labor Standards Act. The nature of your business could present even more unique audit situations (we can help with that, too!). Trust us, we have over 30 years of experience in HR and helping companies identify risk and develop best practices. Here are a few primary areas to review:
● Employee Files
● New Hire Reporting
● Compensation Practices
● Employee Classifications
● Workplace Posters
● Independent Contractors
● Employee Handbook/Company Practices
An audit will give you a clear view of your current situation. At Thrive HR, we also provide guidance on any changes you should consider, along with follow-up and best practices from similar companies.
Getting Started
If you don’t have a lot of time, pick one or two items you can complete quickly or that may have the highest risk. We recommend starting with Form I-9 and your Workplace Posters. You can review them in a short period and get a quick idea if you are compliant so far. Don’t worry if you don’t know what to look for—we can provide you with checklists and information if you want to perform your own internal audit.
Next, schedule solid time in your calendar to review the rest of your human resources documents and practices or set aside time each month to audit another area. You have two goals here—peace of mind and reducing any risk (fines, penalties, etc.) your company may face if you are audited by a government agency.
We’re Ready. Are You?
Now you understand the importance of HR audits along with the value regular reviews can have for your business so you can THRIVE! Take advantage of our HR Audit Services to outsource your reviews and get the guidance you need to make your audits successful!
