February 01, 2022
The Importance of an HR Audit


Blog > The Importance of an HR Audit

When we first hear the word “audit” often times it sends a shiver down our spine. No one ever gets super excited when the IRS decides it's time to audit them, we get that. However, an audit doesn’t always have to be a terrifying experience. Whether you have in house HR, or you are a small business with no current plans to have HR on site in the near future, you should still prioritize an audit. The results obtained from it can help identify gaps in HR practices, as well as mitigate your risk on current policies or practices. An audit can help you prioritize these gaps in an effort to minimize lawsuits or regulatory violations.

So, what will the audit be evaluating? Following are a few key elements that are included in an HR audit.

  • An evaluation of your company’s operational HR policies, practices and processes with a focus on key HR department delivery areas:
    • recruiting
    • employee retention
    • compensation
    • employee benefits
    • performance management
    • employee relations
    • training and development
  • A review of all documents and policies to ensure you are following all legal parameters set forth by the government, as well as best practices:
    • Personnel Files
    • Form I9s
    • Leave Paperwork, ADA Paperwork, and Medical Files
    • Disciplinary Process and Templates, List of Previous Discipline
    • Job Descriptions and FLSA Designations
    • Employment Posters
    • Diversity or Affirmative Action Plans
    • Emergency Preparedness Plans

What should happen once you have a completed audit?

  • Provide feedback about the results:
    • At the end of the audit process, the audit team will summarize the data and provide feedback to the organization's leadership in the form of findings and recommendations. Findings are typically a written report with recommendations prioritized based on the risk level assigned to each item.
  • Create action plans:
    • Creating an action plan to act on the information you have uncovered is critical. Conducting an audit and then failing to act on the results actually increases legal risk.
  • Foster a climate of continuous improvement:
    • At the conclusion of the audit, leaders must engage in constant observation and continuous improvement of the organization's policies, procedures and practices so that the organization never stops improving. One way to do this is to continuously monitor HR systems to ensure that they are up-to-date and to have follow-up mechanisms built into every one of them


If your company has not had an HR audit in over a year, now is a great time to consider one. Random and targeted government audits (as well as the fines associated with them) are increasing. Not having things in order can cost your business hundreds of thousands or even millions of dollars. Although an audit may seem overwhelming, the results are worth the effort.


ALT HR Partners provides comprehensive (and painless) HR audits. Contact us today to get started!

Want to know how you stand today? Click here to complete our quick HR audit and let us know your results.



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