Why you need to conduct an HR audit

While HR professionals have acknowledged the value of conducting HR audit exercises, they still struggle with overcoming the complexity of the processes and making them more efficient. Asha Menon, former vice-president of human resources at Citigroup Malaysia, shares her views and experiences of HR auditing.

When I was first introduced to the concept of HR audit three years ago, the first thing that came to my mind was the scepticism reaction exhibited towards internal auditors.

Auditors are nit-pickers and fault-finders. Would HR practitioners be seen in the same light and be branded similarly? Isn’t it bad enough we are already seen to be discharging duties as the corporate “police function?”

Only when I embraced the underlying concept and understood the rationale and missionary behind an HR audit exercise was I able to comprehend and conceptualise the immense benefit and potential revolution it could bring to the human resource department (HRD).

So, what is an HR audit?

A HRD audit is a comprehensive evaluation of the current human resource development strategies, structure, systems, styles and skills in the context of the short and long-term business plans of a company.

Why perform an HR audit?

Conducting HR audits is an integral part of an an HR professional’s role in any company. Not only will an HR audit help a company ensure it’s in compliance and conformance with the law, but it will help HR professionals standardise processes, identify risk areas, and tie HR goals to strategic business goals. There are various types of audits designed to accomplish a variety of objectives. An HR audit can be as comprehensive as needed within the constraints of time, budgeting and resources. There are also various steps an HR professional can take during the audit process to make the process run smoothly, effectively and efficiently. An HR audit attempts to find out the future HR needs of the company after assessing the current HRD activities and inputs available.

Why do organisations hesitate, and what are the challenges?

Well, I would not talk of imbibing at this stage because an HRD audit per se is still a challenging idea to be accepted by many organisations, even among the contemporary HR managers. We often feel disgusted at auditors and the checks they perform. We often take the approach, “it’s best not to tell the auditors anything unless they specifically ask”.

It’s the same I would say that was the idea behind an HRD audit. Auditing is an opportunity for introspection if it’s done voluntarily by the HR managers. Most of us spend a lot of our time and effort in conducting internal surveys, building systems and processes and administering training programmes without estimating the relevance and impact on our business. The HRD audit methodology addresses this and enables HR managers to assess the ground reality.

The challenge lies in the un-organisation of the companies. The HRD is still the most neglected department. It is mainly confined to staffing. The whole of the HR department is busy conducting interviews, managing high attrition rates, and in the name of HRD, the manager co-ordinates the dates and logistics for the induction of new recruits. The plight is the vicious cycle never comes to an end.

The way forward

HRD competence and business impact assessment are the magnum opus in this audit process. If all of us in HR undertake auditing in our respective companies and concentrate on the weak areas identified, I am sure we can enhance HR credibility in the business.

I do not find any reason for HR managers to shy away from this introspection. I concluded by going through some of the books written by the profound writers in this area that the idea is simple and aims at the good of all.

The HRD audit is in a nascent stage. Its adoption will need a very high sense of integrity, an enormous amount of intellect, and an even greater conviction in the betterment of processes. It could very well be linked with the concept of HR accounting.

In future, only the organisations which hold a true value for its people will survive, while the rest will creep into the darkest corners. That’s why there is a dire need of some accreditation for the HRD audit which compels the organisations to follow the basic processes.