Platt Perspective on Business and Technology

Human Resources audits 101 – 1: starting a new series

Posted in HR and personnel by Timothy Platt on November 1, 2013

I have been writing recurringly about Human Resources and their processes, approaches and operations in this blog, and about how their activities enter into and support the rest of the business (see my directory HR and personnel.) Most of that has focused on specific functional areas where HR would help meet focused ongoing business needs (e.g. managing overall processes for hiring and onboarding new employees, managing employee performance reviews, and organizing company-wide employee training courses and programs.)

I step back from that type of functional area-specific analysis with this posting, to consider:

• Human Resources performance as a whole and best practices for reviewing and auditing them
• With meaningful benchmarks and performance criteria that can be used strategically in keeping this department effectively and even proactively aligned with the overall business and its needs.

My goal for this series is to systematically pose and respond to a series of questions that together address much of that overall goal. And at a minimum I will pose and discuss six such questions, and with an intention of provoking thought as to how to apply this discussion to the specifics of your own business:

1. What HR functions should be tracked and audited here?
2. What metrics should be employed in doing so?
3. How should operational exceptions and problems be identified, measured, tracked and resolved, and how should that be included in an HR audit?
4. How often should an HR department undergo audit procedures, and who should do this?
5. How can this process and its ongoing findings best be incorporated into overall business operations and strategy?
6. How can overall business strategy and operational planning be connected back to HR through incorporation of actionable feedback into their practices and policies?

I fully expect to add more basic questions and discussion of more issues to this series before I complete it, but will start here with this list. And I begin this discussion as the balance of this first series installment with at least the start of a discussion of the first of these questions:

• What should be tracked and audited?

There are two basic approaches that I see as useful in addressing this question; they are tracking and auditing

• Processes and their outcomes for activities that follow and help manage the employment lifecycle at the business, and
• Processes that are directed towards better managing risk as that comes from personnel-oriented policy and practice.
• And I note here that employment lifecycle supporting tasks and business due diligence tasks can and generally do overlap and if for no other reason, because a problematical employee lifecycle practice quickly becomes a due diligence risk factor too.

The basic lifecycle tasks that have to be considered here and that merit explicit, systematic auditing should be familiar to essentially anyone who has ever worked for others at a business. They include HR process and function areas such as:

• Employee hiring, which as discussed in other postings is itself a complex process in its own right (see for example my series Hiring 101 at HR and personnel as postings 93 and loosely following for Parts 1-9),
• Employee onboarding (see the same directory and postings 119 and following for its Parts 1-13),
• Ongoing management of employee benefits which with time can change, and both for individual employees and employees who fall into specific employee classes, and for all employees at a business at once.
• Promotions,
• Transfers and reassignments,
• Terminations of employment and for every possible anticipatable reason (e.g. voluntary severance as for example when an employee moves out of the area or takes a new job with another business, downsizing or lay-offs, separation due to injury or disability, retirement, termination with cause, etc.)
• Post-employment benefits (e.g. HR’s role in managing unemployment benefits and pensions, which for benefits at least often begin when an employee first comes onboard and certainly when they have completed their new hire probationary period).
• And other processes.

Obligatorily risk remediation and due diligence functions include but are not limited to:

• Workplace antidiscrimination training, that in many cases begins in the job description with its boilerplate wording about this hiring business being an equal opportunity employer. And this is often formally presented as a component of a new employee orientation meeting that every new employee would be required to attend within some maximum number of days after their start date.
• Coordinately with this, HR should provide access to third party counsel, not affiliated as a direct employee of the company who employees can turn to if they do find themselves facing what they construe to be harassment or discrimination.
• And both company-wide manager training, and HR staff training are essential in making this work. As explanation of that last point, I have seen HR managers who have experience discussing workplace discrimination and harassment issues at new employee orientations, make the mistake of arguing with employees against their seeing this third party council when they feel they are being actively harassed and discriminated against at that workplace. This attempt on HR’s part to approach employee issues from the business’ perspective, needless to say, makes their own HR department and the business as a whole a part of the problem and a potential litigant if such an employee were to seek legal action as a remedy. I will come back to this and I add other specific examples where HR practices need to be audited and at times course-corrected as an important and even crucial part of a business’ overall risk management effort.

And to round out this part of this first question discussion, the issues that I have touched upon up to here are all fairly generic and apply essentially equally to any business organization, and in any industry. And effective and connected Human Resources department also manages or at the very least co-manages a range of business and industry-specific task and process requirements too.

• For many industries (e.g. healthcare and financial come immediately to mind as does the airlines industry) licensure and certification can be essential requirements for continued employment eligibility
• And HR should track who needs what license or certification updates, upgrades or renewals
• And what training or continuing education certification they would need for securing them.

I am going to continue this discussion in a next series installment where I will at least begin to address question two from the top of this one:

• What metrics should be employed in performing an HR audit for these and similar processes and activities?

Meanwhile, you can find this posting at HR and Personnel.

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