The unexpected benefits of an HR Audit

Regular HR audits can help minimize potentially painful legal risks and offer opportunities to improve HR policies and practices. However, business owners in charge of HR or even dedicated HR professionals for a small business already have their hands full with day to day tasks and an audit (done right) takes considerable time. This is a valuable effort and should have the proper energy and resources devoted for a lasting return.

If you’re asking yourself ‘What is an HR audit?’ and why do I need it, you are not alone. An HR audit is simply an objective examination of your business's HR policies, practices, and procedures with the goal of identifying trouble spots and ways to improve.

Ailee Nelson, Owner & HR Consultant at Approach HR shares her recommendation for the right approach to an HR Audit, “We recommend that any business with one or more employees bring in an HR consultant to have an audit done. Our approach is to start out with a conversation where I or a team member begin by asking questions about their current set up. Do you have a COVID-19 Preparedness Plan? Is it posted? Do you have Federal and State Employment Posters posted and visible to staff? There are many details that can get employers into trouble if these things are not completed correctly.”

Things that feel straightforward can easily be missed. Employee records, for example, have many small considerations that can add up to big legal trouble. Are your employee records together or separate? Are there critical forms missing from your records? Are all of your application questions appropriate? Even after termination, these files should be retained for a certain amount of time. Having dedicated time, resources, and expertise is the key to a good audit and a clean future for your HR department. 

Approach HR has handled HR needs, including HR Audits, for a number of local businesses including Two Bettys Green Cleaning. “For Two Bettys Green Cleaning, we focused on making sure employee files were correctly separated, necessary paperwork was included, and forms were completed correctly. If they weren't, I corrected them and attached a form saying the file had been audited. One of the biggest areas of errors I find in companies is on completion of I-9 Forms. Dates, name of documentation, and name of issuing authority must be very specific.”

Anna Tsantir, Founder Lady at Two Bettys Green Cleaning shares her perspective on feeling ready for an HR Audit and the most unexpected and helpful outcomes that will shape the future of their HR processes.

What made you feel it was time for an HR Audit?
We were recovering from a really awful hire and termination in a leadership position, and one of the things that came to light during that situation was that we didn't have all of our HR processes locked down as tightly as we should. I realized at that time this is something we need to be doing regularly, have an outside HR organization check on us and our compliance as well as advise best practices across the board as well as have a great HR lawyer on retainer.

What part of the HR Audit did you find most helpful?
We ended up identifying key areas where we needed quite a bit of work done. Ailee and her team developed a plan with us to get our files in order, our documents corrected and make these corrections standard practice moving forward. 

Was there anything unexpected from the experience?
Plenty. However, it was mostly what we didn't know we didn't know. Ailee was great at identifying what we needed to do and helping us make all the necessary changes in a timely, organized manner.

What have you changed in your organization since the HR Audit?
As a result of the audit we knew we needed to hire a specific type of HR Manager and Ailee supported those efforts to make sure we hired someone with the right experience and credentials so that this situation doesn't happen again. It is truly peace of mind knowing this liability is shored up.

When will you do your next one?
We are now doing annual check-ins with Ailee and Approach HR to keep my HR Team both more accountable and comfortable. As a Founder, HR is not my area of deep expertise, nor do I want it to be. But we are a service business with almost 100 employees, so HR is crucial here. Partnering with Approach HR for an immediate audit and ongoing support is how I solved for holding a crucial part of our business accountable. 

What would you say to a business owner on the fence about conducting an HR Audit?
DO IT! I once had someone tell me that the greatest risk to business owners in most industries is what could happen if an employee created legal issues for us because of something we did, even if it wasn't intentional. HR law and compliance is deep and complicated. This is just what you do to shore up or de-risk this part of your business. We have been very satisfied with the work Approach has done for us and alongside us, I recommend them with confidence.

Business owners, now more than ever, have so much on their plate. HR related functions often fall to the bottom of the list because they are detailed, require focus, and are often not everyone's favorite thing to do. 

“I always tell my clients that it isn't that they can't do it, but it isn't the best use of their time as a business owner. Delegating out HR responsibilities makes sense. Delegate to elevate!” 

Being proactive with an HR Audit from Approach HR will help you make sure you have your employee files, forms, employment posters, and other HR details buttoned up to save you from costly audits with penalties that could have been avoided.

“My clients often tell me how good it feels to have things organized and on track. I leave them with a functional system they can continue to use, providing templates, forms, etc. Our services are always available as needed, so never hesitate to call on us to begin or continue supporting your HR needs.”