How would you assess the HR health of your business? What does it include? And why do you need it?
As a business that employs people, there is both, a legal obligation to comply with specific local employement regulations as well as an opportunity to streamline operations to maximise productivity.
A number of Start-Ups and Small businesses grow and expand organically which sometimes does not allow the luxury of consciously building a legally compliant HR Framework.
This is where an HR Audit is most useful.
It reviews all aspects of your people-operations, including Employment Contracts, HR Policies & Procedures, Employee Handbook, HR Documentation, HR Systems and other processes in place to support the people operations of your business.
The most significant outcome of an HR Audit is that it reveals compliance to local employment regulation, at a minimum. It gives you a clear picture of where you stand today versus the desired state and the gaps to address. This ensure that, in the event of any unforeseen issues, your business is protected from a legal perspective.
For instance, if you have to exit an employee due to poor performance or any other misconduct and this employee takes you to the labour court, would you be able to demonstrate that you:
- Had a clear Employment Contract in place that defined the terms of employment?
- Have clear documentation that was issued to the employee to clarify their role, responsibilities and the expectations of performance i.e. Job Description and annual objectives
- Had a clear process that guided how you arrived at the decision to end the employment i.e. a Disciplinary Policy? Etc.
- Have a clear policy of how you manage the exit of an employee and process all their financial dues as per their entitlement i.e. a Separation Policy.
Moving on from legal compliance, an HR Audit also helps identify key areas of further development to further enhance your people operations.
For instance, often in smaller teams, employers do not put HR Policies in place as they are ‘deemed’ unnecessary due to the size of the team. This means that when it comes to managing standard HR operations such as, Time and Attendance or Leave, you will have to manage each employee scenario individually as opposed to managing only the exceptions. In addition to a waste of time, it also results in decision-fatigue i.e. the exhaustion associated with continuously having to make decisions.
Similar to financial audits, HR Audits are often carried out by external HR Consultants as an independent third party. This process is a detailed process and can take anywhere from 3 – 5 weeks, depending on the size of the business.
Should you wish to assess the HR health of your organisation, please reach out to us at firstname.lastname@example.org.