This blog is written by Syed Asim Habib, Senior Manager HR and Consulting. Please read this blog and provide your valued comments.


Continuing from the last blog from the same Author, in this version HR Audit Process will be discussed along with the famous FCC’s (Five Critical Components).

HR audit process is conducted in different phases. Each phase is designed to build upon the preceding phase so that the organisation will have a very strong overview of the health of the HR function, at the conclusion of 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.
  2. Pre-Audit Self-Assessment: The self-administered yes/no questionnaire asks a number of questions about current HR policies and practices. The completion of this self-administered questionnaire allows auditors to identify key areas for focus during the HR audit.
  3. On-site Review: This phase involves an on-site visit at the client’s facility interviewing staff regarding HR policies and practices. An in-depth HR audit checklist is completed.
  4. Records Review: During the on-site visit, a separate review is conducted of HR records and postings. Employee personnel files are randomly examined as well as compensation, employee claims, disciplinary actions, grievances and other relevant HR related information are checked.
  5. Audit Report: The information gathered is used to develop an HR audit report.
  6. The critical areas: The comprehensive HR audit covers all areas of HR management like recruitment practices, training and development, compensation and benefits, health, safety and security, miscellaneous HR policies and practices-welfare, strategic HR issues, manpower planning/budgeting.

An HR audit is much like an annual health check. It can perform the same function for the organization. An audit is a means by which an organization can measure where it currently stands and determine what it has to accomplish to improve its HR functions. It involves systematically reviewing all aspects of human resources, usually in a checklist fashion, ensuring that the government regulations and company policies are being adhered to. The key to an audit is to remember that it is a tool to discover and not to test. There will always be room for improvement in every organization.

The Five Critical Components of the HR Audit Process

These five critical components, which should be addressed in every HR audit, are shown and discussed below in the HR Audit Model.

  1. Activities: The starting point of the HR auditing process is a review of the organization’s activities, that is, the tasks and actions that create or implement employment policies, practices, procedures, and programs.
  2. Behaviors: Behaviors in this context are actions and conduct that affect either positively or negatively the implementation or effectiveness of the organization’s policies, practices, procedures, and programs, and demonstrate the organization’s commitment to stated goals and objectives.
  3. Risk Assessment: Risk assessment is the identification of events or conditions that create new opportunities for the organization to achieve its business objectives.
  4. Internal Controls: Internal controls are processes, tests, and assessments that help ensure compliance, manage risks, identify fraud, and help ensure the achievement of organizational goals.
  5. Outcomes: Outcomes are quantitative and qualitative measurements and metrics that measure and help assess the achievement of organizational goals and objectives.

Syed Asim Habib

Please read this blog and provide your valued comments.