Complete Human Resources (HR) Audit Checklist
An HR audit is a comprehensive assessment of the HR function. An HR audit evaluates the effectiveness and efficiency of how an organization manages its people, including recruitment, selection, performance management, and development phases.
Employment laws change, so organizations must keep up with them to exhibit updated HR compliance. One of the many benefits of auditing is that it helps organizations identify areas for improvement and cost savings, such as improving leadership development programs or reducing turnover rates through improved performance reviews.
If you want to learn more about the human resource audit process checklist via video, watch the video below. Otherwise, skip ahead.
We have created a human resource audit checklist that asks a series of questions about critical areas of the HR department. You can use it to make your audit successful. Let’s dive in.
6 HR Audit Checklists to Streamline Your Organization
Here is the regular HR audit checklist that you can use to make the human resource audit process successful:
Overall Company
Here are points for you to include in your checklist regarding the overall company:
- Do you have mission and vision statements?
- Is the HR department following the company’s goals?
- What’s the number of supervisors and managers in the company?
- How many employees does the company have, including full-time and part-time employees?
- What hours in total do they have to work as full-time employees? Part-time employees?
- Do they know their status as full-time or part-time employees?
- For how long does an employee have to stay temporary?
- Is your company EEO-1 compliant? How often do you file for Equal Employment Opportunity (EEO) compliance?
- What are company timings? If there are shifts, do they follow a set schedule?
- What are the means of communication for HR professionals with employees and higher management?
Are you interested in learning more about human resources, management, audit, payrolling, recruitment, and much more? Enroll in our top-rated human resources certification courses right now:
Recruitment
Here are points for you to include in your checklist regarding the recruitment:
- Who is the recruiting manager?
- What’s your recruitment process for new employees?
- Who does the initial assessment of candidates?
- Who gives the go-ahead to call someone for an interview?
- Is there a training process for those who take the interviews?
- How does the recruitment procedure get logged?
- Are there procedures set for checking candidate backgrounds and references? If so, how are they cataloged?
- What mediums are used to hire staff (social media, job portals, or print media)?
- What about job descriptions? Do they exist and are ADA compliant?
- Are I-9 forms created for each employee, and are they reviewed yearly?
- Is there a mechanism set for e-verifying new hires?
- Are protected health information and I-9 documentation kept separate from public records?
- Where does a job opening get posted? Can the current employees utilize an opportunity?
- Do employment contracts’ applications discourage requesting information about an applicant’s criminal record?
- Does the application form ask whether or not the applicant needs accommodation?
- Who makes the final decision to hire someone?
- Once hired, are they notified through a conventional offer letter?
- Is there a way to distinguish Independent contractors from other employees?
- Is there a test to classify independent contractors?
- Is there a culture that raises issues about the classification of employees?
- How do exempt employees fit into the classification process?
- How does your organization handle the complex issue of timely reporting new hires?
- Does there exist an employee handbook?
- Is the employee handbook updated and according to the workplace?
- Do the employees have to attend orientation?
- How long does it take to finish orientation?
- Are harassment, attendance, and wellness HR policies in place?
- Are the employees briefed on harassment and discrimination problems?
Compensation and Employee Benefits
Here are points for you to include in the checklist regarding employee compensation and benefits:
- Who negotiates compensation and benefits?
- Is there a compensation committee in place?
- What are the salary ranges for different positions in your organization?
- Is there a process to designate the exempt and non-exempt per the provisions of FLSA?
- What are the company’s policies on recruitment and employee retention?
- Does your organization offer benefits to its employees such as health coverage, disability, life insurance, bereavement leave, and others?
- Is there a proper pay structure in compliance with the national pay scale?
- Are the work hours monitored?
- Are the vacations and holiday schedules structured right?
- Is the company’s vacation policy compliant with local laws or regulations?
- Does your organization compensate non-exempt employees according to the law for extra work?
- Do the employees know about their compensation rights?
- Is the company’s wage and hour compliance plan current?
- What is the organization’s policy on overtime compensation?
- Does the company comply with the COBRA law to protect employees from losing their health coverage when they leave or are terminated?
- Is the employee leave time in line with the FMLA guidelines?
- Are the supervisors and managers responsible for notifying the HR department if an employee misses work due to a medical condition?
- Are paychecks distributed on time?
Employee Relations
Here are points for you to include in your checklist regarding employee relations:
- Do supervisors work with staff to provide a positive work environment?
- Is the company’s attendance policy clear and well-communicated?
- How are performance evaluations conducted? Do employees know about the several types of assessments?
- Is there a way to assess the quality and volume of work done?
- Is there a straightforward procedure for resolving performance issues?
- How flexible are disciplinary actions for violating workplace policies? Does documentation exist to support each incident of infractions in the future?
- Is there a way to file complaints against coworkers?
- To discourage retaliation against employees who exercise their rights, are there policies in place that prohibit such actions?
- Are the employment criteria following the anti-discrimination federal laws?
- Is the company’s EEO statement clear and available to all employees?
- Is there any performance appraisal tool?
- What about exit interviews? Do they happen to find reasons for their departure?
Safety, Wellbeing, and Worker’s Compensation
Here are points for you to include in your checklist regarding employee safety:
- Does the company have a policy to protect employees from workplace violence and threats?
- Do managers know how to react when an employee is exposed to physical, emotional, or sexual abuse at work?
- Is there any employee training for supervisors and middle management on bullying prevention?
- Are employees protected against verbal abuse?
- Do you know if workplace accidents are reported and investigated?
- Are employees encouraged to report injury without fear of retaliation?
- Is there a clear policy for drug testing, and what are its rules?
- Are there any policies in place for pregnant workers?
- Is the workplace lit for ergonomic purposes, and is the temperature within a reasonable range?
- Is there an emergency response system in place in the event of an emergency?
- Are the disabled employees briefed on official structures?
- Are new employees aware of OSHA regulations and how to report incidents?
- Are minors kept away from work involving hazardous materials?
- Is there the availability of MSDS sheets for cleaning supplies and other chemicals in the workplace?
- Are the programs to help employees get back on track after a leave of absence effective or sustainable?
- Are employees provided with safety training and information?
- Is there a written policy for handling confidential material in the workplace?
Record Keeping and Documentation
Here are points for you to include in your checklist regarding the employee record and documentation:
- Are personnel records, performance reviews, and other HR documents logged promptly?
- Is there an audit trail of system activities to ensure that changes are authenticated by authorized users only?
- What kind of information is held in personnel records?
- Is there a system for storing and retrieving personnel records, documentation, and other HR information?
- Are sensitive documents stored in a secure location?
- Who has access to sensitive documents and records?
- Do the managers and supervisors undergo training on personnel files?
- Do the federal and state labor posters show in an easy-to-read location where employees will not miss them?
- What does your office do to maintain the integrity of its document retention policy? Do you have a written record-retention procedure in place that is followed by employees and enforced through periodic reviews?
- What’s the process to keep track of paid time off, FMLA, and Worker’s Compensation?
Final Words
This is the HR audit checklist, which covers all the aspects of human resource management. Any organization that wants to maintain good workforce management practices should follow it.
If anything else is left, it is the implementation part. You must ensure the information and procedures are implemented across the organization. After all, the gist of an audit is that the company is a better version of itself.
Here are a few more things to note for a successful implementation:
- Keep employees informed of the changes due to the human resources audit through memos and other communication methods.
- Hold training sessions on updated or new HR policies so all employees know about them at once, with clear explanations as required. Employees must take it all in and provide feedback to the HR team.
- Include a small section about company policies on employee handbooks so that employees know what is expected of them.
FAQs
Here are the most frequently asked questions about HR audit checklists.
What is the purpose of an HR audit checklist?
An HR audit checklist is a structured tool for helping organizations systematically review their human resources practices, policies, and procedures. It is designed to assess HR operations’ effectiveness, efficiency, and compliance, ensuring that the organization adheres to legal and regulatory requirements while aligning HR functions with strategic business goals.
How does the HR audit process work?
The HR audit process involves a comprehensive evaluation of various HR functions and activities to identify areas for improvement and ensure compliance with labor laws and regulations. It typically starts with setting objectives, collecting data, analyzing current HR practices, and benchmarking them against industry standards. The process concludes with recommendations for improvements and a roadmap for implementing corrective actions.
What are the key components of an HR audit checklist?
An HR audit checklist usually includes critical components such as reviewing employee records, compliance with employment laws, payroll processes, recruitment and onboarding practices, training and development programs, performance management systems, and employee benefits. Each component is assessed to ensure it aligns with legal requirements and contributes to organizational efficiency.
Why are HR audits important for organizations?
HR audits are vital for organizations as they clearly understand the strengths and weaknesses of HR functions. They help identify compliance risks, improve the overall efficiency of HR operations, and ensure that HR practices support organizational objectives. Moreover, audits can uncover issues that might lead to legal penalties, helping organizations mitigate risks proactively.
How often should HR audits be conducted?
HR audits should be conducted at least once a year to ensure the organization complies with evolving employment laws and regulations. Additionally, audits may be required more frequently during periods of significant organizational change, such as mergers, acquisitions, or updates to labor legislation, to address new challenges and ensure HR processes remain effective.
What are the benefits of an HR audit for HR departments?
HR audits offer numerous benefits for HR departments, including identifying gaps in compliance, enhancing operational efficiency, and ensuring that HR strategies align with business goals. They also help uncover inefficiencies or inconsistencies in processes, enabling HR teams to make data-driven decisions for improving workforce management and overall employee satisfaction.
What challenges can arise during the HR audit process?
The HR audit process can encounter challenges such as limited access to accurate data, resistance from staff or management, lack of resources to implement recommended changes, and difficulty in interpreting complex legal requirements. Overcoming these challenges often requires careful planning, effective communication, and support from leadership to ensure the audit process achieves its intended outcomes.
How can HR practices be improved using insights from HR audits?
HR audits provide actionable insights into areas where HR practices may fall short, such as outdated policies, ineffective recruitment strategies, or compliance risks. Organizations can use these insights to implement targeted improvements, such as updating policies, enhancing employee engagement programs, or streamlining administrative processes, to ensure their HR practices remain competitive and compliant.
What tools are commonly used for HR audits?
Organizations frequently rely on specialized HR software, compliance management tools, and detailed checklists to streamline the audit process. These tools help standardize data collection, facilitate analysis, and ensure that all critical HR functions, such as payroll and benefits administration, are thoroughly reviewed for compliance and efficiency.
Can HR audits address employee satisfaction issues?
Yes, HR audits can play a significant role in identifying and addressing employee satisfaction issues. By evaluating engagement surveys, turnover rates, feedback systems, and communication practices, audits can pinpoint areas where employee morale may be low, or processes negatively impact the workforce. This information enables HR teams to implement initiatives to improve satisfaction, such as better training programs, clearer communication channels, or enhanced recognition and rewards systems.
If you are new to Human Resources and are looking to break into an HR role, we recommend taking our HR Certification Courses, where you will learn how to build your skillset in human resources, build your human resources network, craft a great HR resume, and create a successful job search strategy.
