HR Audit | Meaning and Definition

What is an HR Audit?

A human resources audit is a comprehensive examination of a company’s human resources processes, operations, and protocols. The goal is to identify weak points as well as locations where you can make changes. You can either hire an independent agency to execute the audit or direct the Human resources department to do it.

An efficient HR audit aids in recognizing the need for HR function development and betterment. It also assists the company in remaining compliant with continuously updating norms and standards.

Despite the fact that HR auditing is not required in the same way that financial auditing is, many firms are choosing regular HR audits to evaluate the existing HR system in light of the company objectives, plans, and objectives, as well as statutory obligations. HR auditors can be both inside and external to the company. External HR auditors are usually provided by HR consulting firms. To ensure the audit’s success, top management must explicitly define the audit’s terms and scope well before an outside firm arrives. This involves establishing the audit’s explicit goal, such as assessing adherence to policies and rules, identifying issue areas to avoid a crisis situation with good preparation, and studying how to effectively look after the interests of parties concerned.

Documentary evidence, work instructions, recruitment policy, regulatory frameworks, job evaluation, skills development, remuneration welfare system, talent management, people management, achievement assessment and reporting procedure, discontinuance, key performance metrics, and HR Information Systems are the major elements of the HR system that are commonly audited (HRIS).