Most of us do a pretty good job of keeping up with our annual checkups, some of us go kicking and screaming but we know that they are necessary, as Human Resources Professionals, Business Owners, and Executive Management Team Members, we should be equally as concerned about making sure that our Company’s HR Department also has an Annual Check Up, it is important that we check the pulse of the department and make sure that the policies and procedures and processes that we put in place are being followed, and that the people running the department and managing the process day to day are insuring full compliance. HR is a huge undertaking, there are so many moving pieces and so many legal aspects that we need to make sure are working properly.
Human Resources is managed by humans, therefore as humans we are going to make mistakes and errors as we go, that is expected; and because it is expected, companies should make sure that they follow up and check in on the process. Setting an annual schedule, and taking a few days to review the processes and files is something that could protect companies from being fined or penalized for non-compliance, and it will show that they are proactive in managing the function. It is also a great idea to use a third party, to perform your Annual Checkup, it’s a fresh set of eyes, and it’s a non biased party who will come in and give you an overview of those things that need to be updated, fixed or adjusted. Human Resources Professionals should never take this as a knock on them or their department, they should welcome it as additional help in insuring compliance and success within their department.
Do all of your employees have a signed Position Description in their Employment Folders? Are all of your employees classified correctly? Are you following through on your employee I9 updates? Are you separating your Employee Benefits Files from your Regular Employment Files? Are you following your New Hire Policy? Are you following your Performance Management Policy? Are you updating your employee handbooks, and policy and procedures to reflect the newly implemented DOL Regulations?
These are just a few of the things that are reviewed during an HR Annual Check Up, there are many many areas that are reviewed. At the end of most checkups, you get a diagnosis and a remedy for whatever may be ailing the department, it is better to perform an internal audit by choice, than to be caught off guard by an agency audit, such as DOL or OFCCP. Government Contractors in particular need to be extremely careful, because noncompliance can mean a loss of contract or worse.
1The last ﬁve years has seen signiﬁcant change in the nature and purpose of HR auditing. No longer a simple checklist of ‘‘yes’’ or ‘‘no’’ questions, HR audits have become part of a comprehensive, sustainable process that seeks to identify and measure the organization’s success at: 1) identifying and assessing how human capital affects the strategic and operational aspects of the organization; 2) determining how the organization’s human capital impacts the management and use of its internal controls, due diligence, and risk management activities; and 3) ascertaining how human capital contributes to the weaknesses and strengths of the organization. Increasingly, HR audits have become an assessment of the HR function — its contributions, weaknesses, and risks — rather than an assessment conducted by HR.
As a result, the HR audit is becoming a formal process that assesses the changes in HR’s role and activities, discusses the external and internal forces affecting the management and use of HR resources, and provides information about current and potential risks.
HR auditing is or should be a process that allows the organization to independently and objectively provide assurance that: 1) HR is meeting compliance and governance requirements; 2) business and talent management objectives are being achieved; 3) human resource management risks are fully identiﬁed, assessed, and managed; and 4) the organization’s human capital adds value. As noted, under this deﬁnition HR audits are more than an audit activity that solely collects and presents evidence to management of compliance. HR audits are increasingly expected to look behind and beyond the organization’s assertions of sound and proper HR management practices and to assess the assumptions being made, to benchmark the organization’s processes and practices, and to provide the necessary consultative services that help the organization achieve its business goals and objectives.
Risk is a critical issue to be investigated. Organizations face numerous risks, which the Institute of Internal Auditors (IIA) deﬁnes as: ‘‘The possibility of an event occurring that will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood.’’ Among these risks are the perils and liabilities related to employment decisions, including strategic risks, ﬁnancial risks, human capital risks, and employment practices risks. These risks can result in a signiﬁcant threat to organizations’ strategic, ﬁnancial, and operational Well-being.
CEO’s are responsible for Overseeing HR Compliance and making sure that their HR Departments are running efficiently, the HR Director/Manager/Administrator are all responsible for insuring that they implement the policies and processes. Everyone has their role in insuring compliance, being proactive, and being consistent is a part of Management. Don’t drop the ball on the Health of your HR Department. Audit your processes, review your policies, and schedule your annual checkup. https://kjthrconceptsllc.com/kjt-hr-checkup-audit/