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How is Your HR Department Doing?

Is it time to audit your HR function? The answer is...yes!

If you are taking over the HR function for a new employer, setting up the HR department for a start-up, reviewing the HR function during an acquisition or merger, or just want to know where you stand, it is time. Performing an annual departmental review is a solid best practice. It is also wise to review selected processes as things change throughout the year. Regardless of when you choose to audit, it is important to know the health of your HR operation. This is best accomplished by periodically auditing the entire HR function in a systematic way. Using a structured audit helps you consider not only how you are complying with federal, state and local law, but also how you compare to business requirements and HR best practices. Look closely at your current compliance, resource effectiveness, and functional competence. Use the initial results as a baseline and then make a plan for improvement. Use what you learn each time as another step toward operational excellence. Be strategic. Be intentional. Be consistent. Auditing your entire HR function requires a significant time commitment and subject matter expertise. It often includes partnering with a consultant who can guide you through the process and recommend solutions to problems identified during the audit. You may also need an outside advisor who is knowledgeable of the complex legal requirements affecting your operations. Legal obligations change frequently due to changing regulations and evolving case law.

Cindy Doty - Human Resources with PassionHR
Cindy Doty - Human Resources with PassionHR

In addition, your organization’s requirements can change when you cross a size threshold, move into a new area of business or make other changes. Failure to comply with laws covering your labor, benefits, immigration, safety and other HR functions can be costly, not only in terms of legal penalties, but also in terms of your organization’s reputation. Therefore, it is important to regularly audit your legal compliance. Regardless of the scope of an HR audit, you can generally expect it to include the following steps.