Human Resources Audit Tips

When evaluating HR department staffing levels a common method divides the total number of agency employees by the number of staff in the HR department. This provides a ratio, i.e. 1/175. When compared to similar sized organizations in the same industry the calculation is used as a benchmark for HR staffing levels. This can be very misleading and should be used with caution however. Without adjusting for variations in growth and turnover rates, investment in HRIS, experience level of HR staff, and other factors, averages don't tell you as much as we may think. For example, HR work volume is significantly affected by organizational growth and/or employee turnover. Both factors require significant HR participation either in recruitment, orientation, on-boarding etc., and/or exit interviews, benefits termination, and severance. A 10% annual growth or turnover rate vs. 15% is a 50% difference in work volume in these labor intense HR duties. The solution, use this ratio as an internal bench mark, and include in your department’s strategic plan continuous year over year improvement in your department’s productivity (ratio).

Organizations waste more money on training than on any other area we audit.

To reduce the cost of training without losing its effectiveness consider pre-testing all potential training participants prior the scheduled date of training. The test should measure the skills/knowledge intended as outcomes of the training. If a trainee scores above the level considered acceptable, then the training should be voluntary for them. You will save countless man-hours by reducing the number of participants sitting through training for skills they already have.

Also, measure the success of your training programs by quantifying the outcomes you seek. Most training programs include a post-training evaluation, but these tend to measure things like room accommodations, trainer enthusiasm, and if attendees enjoyed their bran muffin. Instead training program success should be determined by outcomes. For example, successful harassment awareness programs should result in a measurable decline in harassment related incidents, complaints and litigation and/or improved employee attitudes and behaviors determined by employee attitudinal surveys. Supervisory skills training success should be measured by changes that occur following the training, i.e. improved employee morale, increased retention, fewer conflicts, increased productivity or reduced costs. Without measurable results from training, the only things for sure are that the program reduced productivity and increased costs.

  • Check to ensure that job descriptions include both "essential" and "non-essential" skills. Only include "essential" skills and not all desirable skills. 62% of our sample was non-compliant.
  • Use the same standards/management practices established for the organization's supervisors when managing the HR department. That means, doing timely, thorough performance appraisals, posting openings, documenting discipline etc. 78% of the HR departments in our sample, did not follow their own policies, procedures and management practices.
  • Don't just track turn-over. Instead track what percent of all turn-over is among experienced, skilled and high performing staff. Even a low turn-over of say less than 10% can be problematic if a disproportionate number of those leaving are top performers. Increased turn-over can be desirable if the increase is among those with the poorest performance or unacceptable conduct.
  • Establish quantifiable goals for all training programs. Don't worry so much about whether the instructor was affable or the room temperature comfortable. Instead measure the outcome based on your objective for having the training in the first place. For example, whether your organization's liability and the frequency of formal complaints decrease after harassment/discrimination training. Be prepared to answer the questions, "What is the return on the investment for the training program?"
  • Allow trainees to "test out" of attending training programs. If they already know the material why make them sit through it? Instead, consider incorporating them into training team for a portion of the program. Remember, only employees who are willing to learn, and need to learn the material will benefit from the training. Those who are unwilling or already doing what is to be trained will not benefit.
  • On your organization's I-9 forms, double check to ensure that signatures are dated within three days of the employee's start date, particularly if you have multiple locations and decentralized hiring. 76% of our sample was non-compliant in this area.