HR audit is the verification of availability of all mandatory HR documents and auditing of HR documents for their compliance with the current legislation of the Russian Federation and internal requirements of the company.
HR audit belongs to voluntary types of audit. Its performance is not compulsory by law. An HR audit may be initiated either by the head of the HR department or by the head of the organisation.
The objective of an HR audit is to reduce the risks of violation of the applicable labour legislation and to increase the efficiency of HR management.
According to the method of conducting the audit, it is divided into internal and external.
Internal audit is the inspection carried out in-house by the company’s specialists.
This type of audit is expedient where it is necessary to analyse a small section of personnel records or a set of documents on a certain situation. A disadvantage of this type of audit is the need to transfer the available human resources from their current job tasks to auditing and to delegate their functional responsibilities to other specialists. This may lead to an increase in the workload of other professionals involved in HR accounting. If the scope of the audit is expected to be significant, it may require more time and the involvement of more than one internal specialist, resulting in a decrease in the efficiency of the company’s HR accounting process.
In case of external audit, third-party specialists are involved in verification.
It is advisable to use this type of audit to perform an independent assessment of the current state of HR accounting. A specialized company has the opportunity to engage a team of experts for the auditing, which will allow it to conduct an extensive and comprehensive analysis of the company’s HR accounting system without interfering with internal processes.
The audit of personnel records management is useful in cases where the company faces “personnel problems” manifested not only in difficulties with the staff but also by improper execution of the necessary HR documentation.
This stage includes the following procedures:
The law does not provide for the uniform list of documents that should be maintained in each organization. Various legal acts contain references to mandatory keeping of certain registers, orders and other documents. Depending on the industry in which the company operates, it is necessary to draw up a list of documents which the organization shall maintain in compliance with legal acts.
The list of mandatory documents includes:
This is not an exhaustive list of the required HR documents. The company may keep the registers of personnel data files, leaves, business trips, certificates of incapacity for work, issued certificates, verification of the military registration status, compulsory medical examination of employees, etc.
First, the availability of HR documents is verified. The submitted documents are then analysed from the point of view of their compliance with legislative requirements. All documents shall be checked for signatures of the authorized person, authorizations, registration numbers, notes of the employee’s familiarization with the order, and execution notes.
Much attention is paid to relations between documents. For instance, in employment contracts, the job title and the salary shall correspond to the approved staffing table and the hiring order, etc.
The employees shall be familiarized with the results of the performed special assessment of working conditions; the working conditions shall be entered into the employment contract (this is a mandatory labour practice). If harmful factors are identified at workplaces, the report shall contain additional guarantees for employees working at such workplaces, e. g. additional leave, hazardous-duty pay, reduced working hours, etc. In this case, it is necessary to check whether the employer provides these guarantees.
The law does not provide for the form of report on the audit of HR documentation. The report shall be compiled in any format developed by the organization which conducts the HR audit. It shall contain the data on the current state of the personnel records management, on identified deficiencies, on the risks of keeping the HR accounting system unchanged, on the recommended corrective measures.
The professionals at Sterngoff Audit employ the HR audit methods developed and approved according to our regulations. Due to the cumulative experience and substantive due diligence, we conduct the HR audit to a high standard.
The result of the HR audit performed by our company is the report that contains:
Within the framework of the organization audit, we assess the state of business and the activities of key employees responsible for specific areas of work. The HR audit is conducted by an external employee who is unbiased and objective towards the company personnel and thoroughly inspects the HR documentation governing the employees’ labour activities.
Thus, the customer has a complete impression of the state of HR documentation in the company and of the identified risks presented as issues that need managing. Due to our recommendations, the customer obtains an efficient tool, enabling the company to manage these risks in order to mitigate them.
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