Why a periodic HR audit is necessary in every organisation? The answer to this is that it can qualify its effectiveness, strengths and weaknesses in training, communications and other employment practice within an organization.
The HR audit serves as a study of the HR department for identifying problems and thereby helps in ensuring that sound accounting principles are followed and the organization can be assured of an effective and efficient human resource function.
Objectives of the Human Resource Audit
- To identify and address HR-related problems
- To search for HR-related opportunities
- To efficiently conduct the much-needed diligence for mergers and acquisitions
- To support initial public offerings
- To review the performance of the HRD
- To look for lapses, irregularities, short-comings, in the implementation of the HR policies, practices, procedures, directives of the department
- To suggest remedial actions to rectify the mistakes and shortcomings
- To evaluate the performance of the managers, executives, administrative officers, executive officers and others in the organisation.
- Last but not the least, to evaluate the job chart of the Human Resource.
Benefits of Human Resource Audit
Several benefits associated with Human Resource audit are given below:
- Identifies the contribution of the HRD to the company
- Improves the professional image of the HRD
- Encourages greater responsibility and professionalism among employees of the department
- Proper framing of HR department’s duties and responsibilities
- Ensures uniformity of HR policies and practices
- Identifies critical HR problems
- Ensures on-time compliance with legal requirements
- Reduces human resource cost through more effective HR policies and procedures
- Paves the way for increased acceptance of the required changes in the HRD
- Reviews thoroughly the department’s information system
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