HR Audit

HRD audit means the methodical authentication of job analysis and design, recruitment and selection, direction and placement, training performance appraisal and job evaluation of the HR of the organization.

HRD audit is useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization and helps company remain competitive.

Audit Process

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HRD Audit – Pre-Requisites

An HRD Audit provides quick way to take stock of a company’s Human Resources and Practices with an eye towards. Improving them the advantage of HRD audits is that they bring a level of expertise to bear on issues. Once the audit is complete the findings are presented to management.

Reasons to Conduct an HR Audit

  1. An HR audit helps ensure compliance with important HR regulations. Staying up to speed on the latest compliance and regulations updates is critical. Whether you’re trying to avoid ACA-related penalties or provide appropriate overtime compensation, HR audit services can help you ensure you’re avoiding any potential fines or penalties.
  2. An HR audit helps eliminate the guesswork around benefits packages. Making sure your employee benefits package is legal and competitive is one of the most challenging aspects of human resources. An HR audit can help you answer all of your questions around which healthcare benefits package is right for your business and how you can simplify your annual renewal and enrollment process.
  3. An HR audit helps you stay up-to-date with the latest employment laws and trends. The business world is changing rapidly, including the laws that govern human resources departments. Employing HR audit services can ensure that you’re not only adapting to the employment law trends that are shaping today’s workplace but that you’re also up-to-date on the general business trends that could impact your organization.
  4. An HR audit helps ensure that your employees are being paid fairly. As an employer, you need to know what fair pay should be for your employees and how to communicate about fair pay and compensation. An HR audit can provide insights into both areas and help address inequities or inconsistencies. Starting in 2019, companies with more than 100 employees must provide the U.S. government with data about worker compensation, broken down by sex, race, and ethnicity. HR audit services can help you be prepared for these reports, while also helping the company avoid any unwanted surprises.

  5. An HR audit will accurately classify your employees. As the popularity of freelance work and independent contractors has risen in recent years, so has the ambiguity on how to classify employees. An HR audit can help you determine how an employee should be classified or what type of hire you should make.

  6. An HR audit can analyze and reduce employee turnover. The economy is booming, and the competition among employers to acquire and retain top talent has never been fiercer. Using HR audit services can help identify reasons why employees may be leaving and improve retention. Whether you’re looking to capture insights through an effective exit interview or ways to boost morale and improve your company culture, an HR audit can provide insights to help you reduce employee turnover.
  7. An HR audit can improve organizational structure and update job descriptions. Whether you’re just starting your business or experiencing rapid growth, using HR audit services can help you evaluate and improve the people, processes, and procedures you use to run your business. An employee handbook is a foundational element for businesses just starting out. As your company grows and evolves, an HR audit can help you re-assess job descriptions in the same way you evaluate finances and budgets.
  8. An HR audit will help you adapt to the evolving expectations of Millennial..
  9. An HR audit can help address and prevent harassment. With the dialogue  #MeToo movement, workplace harassment has become a hot button issue at companies across the country. Using HR audit services helps companies identify potential harassment issues and ways to foster a safe working environment.



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FIVE Approaches to HR Audit

Comparative Approach.- Auditors Identify another Company as a MODEL. Result of their Organization compared with those of Model Company. Outside Authority Approach – Often, Auditors use standard set by Outside Consultant as BENCHMARK for comparison of own Results.

Outside Authority Approach.- – Often, Auditors use standard set by Outside Consultant as BENCHMARK for comparison of own Results.

Statistical Approach- statistical measures of performance are developed based on the company’s existing information. … In the compliance approach, auditors review past actions to determine if they comply with legal requirements and company policies and procedures.

MBO Approach Auditors may choose any of the five approaches for the purpose of Evaluation. This is a goal and objective-based approach. Specific targets are laid down against which the organization’s performance is measured so as to arrive at a final decision. The Audit team conducts a survey of the actual performance then compares that performance with the desired objectives of the organization.

Compliance Approach.- Auditors review Past Actions to determine if those activities comply with legal requirements and Company Policies, & Procedures. A Final approach is for Specialists & Operating Managers to set objectives in their areas of responsibility.