The HR Audit process

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In the last blog, I had written about what an HR audit is and why is it important for organizations to have an HR audit conducted periodically. In this blog, I am going to write about how the HR audit is conducted as well as its various phases.

While there are various ways of conducting an audit the following roadmap is commonly followed with the HR audit process being conducted in 5 different phases. Each phase is designed to build upon the preceding phase so that the organization will have a very strong overview of the health of the people function and its effectiveness after the audit. These phases include:

  1. Pre-Audit Information: This phase involves the acquiring and review of relevant HR manuals, handbooks, forms, reports and other information. A pre-audit information request is forwarded to the client to compile the necessary information for review by agency conducting the audit.
  2. Pre-Audit Self-Assessment: To maximize the time spent during subsequent portions of the audit, a pre-audit self-assessment form is sent to the client. The self-administered yes/no questionnaire asks several questions about current HR policies and practices. The completion of this self-administered questionnaire allows the agency conducting the audit to identify key areas for focus during the HR audit.
  3. On-site phase: This phase involves on-site visits to client’s facilities and comprises interviewing staff regarding HR policies and practices. During this visit, based on the findings, a very detailed HR audit checklist is completed. In case the HR audit is as per PCMM model, the checklist is completed as per the PCMM format.
  4. Review of documents and processes: During the on-site visit, a separate review is conducted of people related documents and processes. Employee personnel files are randomly examined as well as performance management process, compensation, employee claims, disciplinary actions, grievances learning and development framework and other relevant people related aspects are checked.
  5. Audit Report: The information gathered is used to develop an HR audit report. A comprehensive audit report categorizes action needs into various areas. Some actions could be urgent and important and need to be implemented immediately while others while being important may not be urgent and hence the management can implement these actions at a later point of time.
  6. Create an action plan: Once the audit is complete, senior leaders of the company and the audit team sit down to discuss the findings and formulate a plan to address each problem or area of concern identified in the report. Action items may include changes to policy, procedures and/or training practices as well as the timelines for achieving each of the actions. Organizations should also consider their available resources when setting a timeline for correcting noncompliance issues, and ensure any corrective actions are realistic and achievable.
  7. Evaluate the progress: Once corrective measures have been implemented, organizations should continuously monitor and periodically review the new processes or procedures to ensure the organization stays compliant. A good practice is to decide on a periodic review which could be every 3 months.

An HR audit gives a comprehensive picture of the various people related policies and processes in an organization and helps organizations set clear action plans to ensure compliance with legal requirements as well as achieve benchmark standards.

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Rajiv is the principal consultant at R Square Consulting. Rajiv can be reached at for any query, discussion or professional requirements.

About R Square consulting: R Square consulting provides end to end services in the field of building leadership and managerial capability to include leadership development interventions based on a holistic blend of exploration, reflection, action learning, executive coaching, assessment centers and various Organizational development interventions.

R square consulting provides customised and holistic HR interventions for developing the human capital of an organization through:

Executive Coaching
Assessment and Development Centers
Organizational Development Interventions
Leadership and managerial development
Flexi HR support for SME

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