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HR Audit: Why Do You Need It?

April 21, 2017

You might have heard a lot about financial audit. But how about HR audit? In general, it can be said that the auditor functions just like a police within the company. Perceived most often in a negative light, they hold reputation as being nit-picker and fault-finders. However, if you put on a positive lense, good auditors play a very crucial role in helping organisations uncover problems, that lie in their HR department and ensure overall business efficiency.

When you run a small-scale business, you might think that there is no need to conduct HR audits. Considering the small workforce, you feel that even the slightest problem can be easily spotted early on and fixed. However, this is a widespread misconception.

Regardless of your business size and type, HR audits are needed to evaluate performance and progress of your HR department. Audits do not only serve to help identify the underlying human resource issues, that will potentially disrupt your business, but it also help your company achieve seamless development and growth.

Every company should hold regular audits in various aspects of the business. Be it HR, finance, marketing, or health and safety, hiring professional auditors is necessary to identify long-term sustainability of the business. Even if everything seems to run smoothly, there could be a hidden loophole in your organisation that causes inefficient practices. And HR department is no exception to this disorganised manner of workings. Therefore, you need to audit the HR practices, policies, systems, and programs within a particular period of time.

If you want further convincing details before initiating HR audits, then take a closer look at the following reasons on why you should consider HR audit:

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  1.    Evaluate current compliance

Along with the changing times, employment laws continue to change in accordance with the current circumstances. Therefore, it is important for companies to keep up with the change, if they do not want to lag behind.

HR audits are useful to help evaluate your company’s progress and stay in compliance with the current laws and regulations. Rather than forfeiting a penalty for law violation which you are unaware about, it would be better to take preventive action by conducting timely HR audits to maintain check and control.

  1.    Identify the best practices

Each organisation has their own distinctive culture and way of conduct, so there is no one-size-fits-all HR practices that can be applied without customisation for every business and  industry. HR audit helps you find clarity, so that you can document and identify best practices that can be implemented by your company’s human resource management.

Best HR practices should be personalised to fit your business goals and objectives, which means you will have to take various factors into account. Thus, you can stay up-to-date with the latest trends and developments in the industry.

  1.    Reduce risks

Conducting HR audits can be a critical part of your efforts in designing risk management strategy. Auditors will help you prevent and deal with issues related to legal claim and lawsuit. By finding and addressing potential issues before the government inspector gets sniffing, you can avoid prosecution that can smear your brand’s goodwill and repute. Additionally, when a problem arises, HR audits help provide the necessary evidence of compliance.

  1.    Gain honest advice

More than a report on your HR department’s assessment, you can get honest advice from the experts. With their recommendations and constructive feedback, you can improve on your HR function more effectively.

Towards the end, HR audits assist you in planning for the future of your HR department. When you have found the best practices suitable for your business and gain the right advice to enhance your role in the management, only then can you move forward to a better future.

Read also: Job Market in Singapore Picks Up, Just Before the Annual Candidate Migration Season

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