5 Business reasons to carry out a HR audit

Last updated: April 17th, 2023

First published: April 17th 2023
Last updated: April 17th 2023

Your business is only as good as your team of employees.

If your staff are not performing well, your business won’t perform well.

While all businesses do regular financial audits to identify inefficiencies, fewer companies conduct HR audits which could help identify outdated policies and procedures, how your business has responded to changes in employment law and crucially how your staff perform within your business.

What is a HR Audit?

At the most basic level, a HR audit will assess how compliant your HR policies and procedures are. As employment laws in Ireland are regularly updated, many employers struggle to keep their employment documentation up to date.

A HR audit can also go further and help you identify staffing issues that might be holding your business back. Possible HR issues impacting your business range from recruitment and retention problems to employee conduct and performance issues.

A HR audit won’t just examine issues that are limiting your business, it will help you identify the strengths in your operations and how you can build on them.

So, let’s take a look at five reasons why your business might need a HR audit.

Reason number 1 – Employee engagement

Research has found that businesses with high levels of employee engagement are more profitable than companies with lower levels of employee engagement.

A HR audit is a perfect opportunity to engage with your employees and to seek their feedback on how to improve operations.

Reason number 2 – Identify risks

Staying on top of everchanging employment law compliance is a perennial challenge. The last number of years in particular has seen the introduction of a slew of new employment laws in Ireland.

A HR audit is a perfect opportunity to ensure your business is compliant with all the new regulations around gender pay gap reporting, statutory sick pay, transparent and predictable terms of employment and the new work life balance rules that will come into force in 2023.

A HR audit will also examine how employee conduct could be undermining your business. A HR audit is a perfect opportunity to examine risks like workplace harassment or excessive absenteeism.

A through HR audit will ensure you minimise the risk of employee claims, orders to pay compensation, and negative public relations stemming from employment law breaches.

Reason number 3 – Performance management

Is your employee appraisal system effective? Many businesses rely on a template appraisal document and standard appraisal interviews. Some companies might have no staff appraisal systems in place.

A HR audit allows you to review your approach to employee performance and come up with a performance management model that best suits the type of business you operate.

Reason number 4 – Recruitment and retention

With the labour market remaining tight, a HR audit provides an opportunity to see if there are any reasons that you might be failing to attract talented staff to your business or why you might be losing the services of valued employees to your competitors.

There are numerous reasons why your recruitment and retention levels might not be where you want them to be. A HR audit ensures you accurately identify the causes of recruitment and retention issues and helps you develop tailored solutions.

Reason number 5 – General HR process review

A HR audit will also focus on identifying gaps in your business processes and where you might have a skills shortage.

HR areas like training and development, employee communications and all employment practices that are specific to your business should be examined.

The audit will help you get a full picture of how your approach to HR is helping or hurting your business performance.

Interested in a HR audit for your business?

A HR audit is a great way to identify the HR issues that might be holding your business back.

Contact us today to find out more about how we help business owners with HR audits.

Call (01) 866 0350 or request a callback here.

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