What Is An HR Audit?: Employee Onboarding

The first step of corporate growth is understanding your pitfalls.
You must
know your weak points to advance further ahead. So, it is essential to conduct
a performance review to learn about the weak links in an organization.
In this regard, audits are an efficient way of doing so. They are an in-depth
study of the business processes to understand its positives and negatives. It
gives a fair idea of what needs to change. One such important audit in a
company, among many others, is the HR Audit.
What is an HR Audit?
The HR (Human Resource) Audit is the process to evaluate a human
resource department's performance. It examines various aspects of the HR
tasks in a company. These can be policies, processes, procedures,
documentation, and systems.
In ascertaining these, an HR Audit looks into the various fronts of human
resource personnel's work. Some of these are:
 Hiring Procedure
 Employee Onboarding
 Compensation Plan
 Benefits Package
 Performance Review
 Termination of Tenure
 Exit Interview, etc
These sections form a crucial part of the HR functions in a company.
Therefore, a study into these fronts gives a fair idea of the HR performance in
the company.
Besides reviewing the HR professional's work, an HR audit also serves many
other purposes. Here is a quick look at a few of these purposes.
Purpose of HR Audit
 Ensuring compliance of the company's working with the governing laws
 Helping the HR Department understand how to improve itself
 Reviewing and the proper resource allocation for human resources
 Being an act of "due diligence" for potential investors and stakeholders of a
company
 A basis for improvements in the future
These were some of the purposes for conducting an HR Audit. However,
based on the different purposes, there are also different HR Audit types to
consider. Some of these are as follows.
Types of HR Audit
For every operation audited, know the mission ... the purpose... the reason for
being.
– Larry Sawyer
1. I-9 Audit
These audits take place to ensure that there is an I-9 form for all employees in
the company. The I-9 form is a legal requirement for companies to verify that
all their workers have valid employment authorization. This step is a must for
employment in the United States of America.
An I-9 Audit checks for any mistakes in the filling procedure of this form. It
also looks into the need for further documentation in the future.
2. Policies
An audit on policies reviews the company's current and upcoming policies to

ensure consistency. Policy audits are also necessary to ensure that they have
full compliance with the governing legal norms.
Related Article: Work From Home Policy: A Definitive Guide For
Managers
3. Legal Compliance Audit

Compliance Audits ensure that the company's practices are one with all
employment laws. These audits look into the leave structure, disability
structure, health and safety, hr policies, payroll, etc.
4. Departmental
This kind of audit specifies all its efforts in one department. It can be payroll,
benefits, performance, etc. Departmental audit keeps on changing
departments to review different divisions of a company.
5. Salary and Working Hours
This audit looks into uncovering mistakes in the company's salary structure
and working hours for its workers. It reviews the legal working hours for
everyone, salary computations, overtime compensation calculations, etc.
6. Safety
A safety audit looks into the steps necessary to ensure employee health.

While working onsite or even at the office, a worker may be vulnerable to
many aspects challenging its health. This audit makes sure that a company
does everything possible to limit risk in the workplace.
7. Hiring
As the name suggests, a hiring audit reviews the hiring process of a company.
It ensures that the hiring strategies are consistent, effective, efficient, and
fair.
8. Employee Training
This audit checks up on the employee training and development programs

in a company. It identifies where new training programs are necessary and
how to improve on the old ones.
9. Benefits & Compensation Package
A benefits & compensation package audit checks up on the salary and

benefits package. This audit looks upon minimum wage, compensation as per
the company's objectives, appropriate employee benefits, etc.
These were a few HR Audits that a company must undertake to review its
legal standpoint and performance. While performing these checks, there are
also a few other things you must check.
HR Audit Checklist
An HR checklist is a list of things you must keep an eye on while performing
HR Audits on different divisions. These checklists are generally very long, but
here are some critical points for various departments to keep it short today.
1. Employee Records
 The first thing is to check the working of your Human Resource Information
System (HRIS). You must have a proper HRIS to track and search the
information efficiently.
 Ensure that you have the I-9 forms in order and all other personnel files.
 Keep the sensitive information of the employees separate. One example here
can be the health information of the workers.
2. Employee Handbook
 Have a legal counsel look at the national, state, and local laws for
employment that may have a say in your office policies.
 Conducting an annual checkup on the handbook to ensure no mistakes take
place
 Making the workforce aware of any new changes in the handbook and getting
their acknowledgment for the same.
3. Hiring & Onboarding Process

 Reviewing that your Applicant Tracking System (ATS) is working at par and as
per your requirements.
 Ensuring and checking up on the viability of the recruitment tools the
company uses
 Appraise the idea of implementing a buddy or mentor system for new hires
Related Article: 6 Employment Personality Test Every Employer Must
Know
4. Compensation
If you pay peanuts, you get monkeys
– Chinese Proverb
 Check up on the national pay scale to offer a competitive salary package and
locate any pay disparity based on race, disability, gender, caste, etc.
 Build up a system to establish how you determine a hike in salary.
 Review the governing salary law to check up on issues like average salary,
minimum wages, etc.
5. Performance Evaluations
 Have a look at the performance appraisal tool you're using currently and see if
it is meeting your requirements
 Decide on an appropriate period to judge the performance of the workforce.
Also, decide on a system to determine employee promotion and employee
demotion.
 Check up on any favoritism in the workplace harming the performance
appraisal process.
6. Benefits
 Check up and update the current employee benefits package to offer a more

competitive package to workers.
 Effectively communicate the benefits package to the working staff. Most
workers don't understand what advantages they have in the first place. An
example of this is the ESIC benefit that most individuals don't know how to
use.
 Get to know what benefits your employees require the most. You may turn
to pulse surveys to understand different employee persona and which
benefits would suit them best, etc.
7. Training
 Decide on the training programs for new hires of every department.

 Consider having a mentorship program within a company to train juniors by
seniors.
 Conducting yearly corporate Equal Employment Opportunity (EEO) training.
Related Article: E-Learning: The New Way Of Employee Training
To conduct a fruitful HR Audit, always assess the situation from the
workforce’s point of view. Evaluating the performance from a work staff’s point
of view will give you a new perspective and show you more areas for
improvement.
These were some of the points you must review for HR Audits on different
divisions of the company.
Conclusion
Audit findings are easy to come up with, successful change from a finding is true
internal audit value.
– Michael Piazza
Conducting and determining a proper action plan from an HR Audit is as
important as having one in the first place. Improper audits can give misleading
results, which can lead to wrong management decisions. So, you must have a
clear understanding of these audits.
The information above should give you a fair idea of what, why, and how
regarding a human resource audit.

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The first step of corporate growth is understanding your pitfalls.

An audit on policies reviews the company's current and upcoming policies to

3. Legal Compliance Audit

5. Salary and Working Hours

A safety audit looks into the steps necessary to ensure employee health.

This audit checks up on the employee training and development programs

A benefits & compensation package audit checks up on the salary and

3. Hiring & Onboarding Process

If you pay peanuts, you get monkeys

 Check up and update the current employee benefits package to offer a more

 Decide on the training programs for new hires of every department.

internal audit value.

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