The value of HR Audits for organisations: From purpose to process

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The value of HR Audits for organisations: From purpose to process
by Christine Botha

The SA Board for People Practices (SABPP), the HR professional and quality assurance body, launched its HR Audit Unit during 2014.  After the evolutionary roll-out of the National HR Standard, SABPP has reached literary thousands of HR Professionals in internalising the National HR Standard that has now become auditable.

Necessitated by significant gaps and inconsistencies in HR standards throughout the country and across industries, the SABPP in association with HR Future, developed the first set of national HR standards. The HR Management System consists of 13 Standard Elements considered key for effective HR management ranging from Strategic HR Management, Talent Management, HR Risk Management, employee wellness to HR measurement.

The purpose of the HR Standards Initiative is to professionalise the field of HR Management with clear standards of practice in HR professionalism, thereby reducing inconsistencies and poor quality HR work.  Also, the HR standards are focused on ensuring that HR management contributes directly to the achievement of business objectives.

An HR audit can be of particular benefit to organisations in providing an independent professional assessment of the current status of the HR function across all 13 Standard elements and will provide details of what requires attention, according to priority. Kholeka Ngubeni-Henderson, HR Executive at Telesure Holdings, the first company successfully audited says: “The audit process was very insightful and enlightening. It reminded us that we need to make sure that we track every process we execute from end to end. This allows us to be able to constantly check and ensure that our processes stay relevant to the business and people practice standards.”

So what exactly can you expect during the audit process?  Firstly, once a date for the audit has been fixed, the HR Audit Unit will sign a contract with you and complete an audit scope document.  You are then issued with a comprehensive HR audit preparation manual which will guide you step-by-step on how to prepare for the audit.  Your HR team will receive a briefing on the Standard and the process to follow.  In addition, your management team will be briefed to ensure buy-in to the process. You will also be given the Audit Assessment and Rating tools to assist you in evaluating your HR function prior to the actual audit taking place. The outcomes of the HR audit are drawn directly from the main 13 HRM Standard elements.

Secondly, from the national pool of 128 trained auditors, the HR Audit unit will select a team of 4 auditors chaired by a Lead Auditor.  The audit team members all sign confidentiality agreements to ensure that all company information is fully protected.

Thirdly, on the day of the audit, which normally consists of one day, depending on the size of the organisation and the number of sites to be audited, the Lead Auditor will conduct an opening meeting with the HR team and key executives.  The audit team will inspect the relevant documentation and interview the Standard Owner of the particular standard element they are auditing, e.g. the Labour Relations Manager for the Employment Relations Standard.  Additionally, they will conduct random interviews with pre-selected managers and staff to find out the extent and the reach of the various HR interventions.  They will then meet to agree on the ratings for each of the 13 Standards, and conduct a close-out meeting.

Lastly, the Lead Auditor will compile an audit report with recommendations and submit it to the HR Audit Unit for a final decision, whereafter you will be informed of the results of the audit.

Typically, the kind of things that the audit team will be looking for are the quality of your HR approaches, the extent of application, and the quality of results achieved. Our experience shows that some companies have sound approaches, but that these approaches do not permeate throughout the organisation in a consistent manner, and there is insufficient focus on clear and tangible results.

One cannot over-emphasise the importance of proper preparation for an HR audit, especially in terms of the evidence to be presented to the audit team.   The HR Standard Assessment Tool provides clear and comprehensive guidance on the types of evidence to prepare as well as likely sources of such evidence.

The HR auditors are all qualified senior HR practitioners with many years of HR experience and are all registered at a level of HRP, CHRP or MHRP in accordance with the NQF Act.  They undergo a 360° assessment and an extensive training process with various exams which they have to successfully complete prior to being certified as auditors. Furthermore, they are from a wide range of industries and sectors and bring a wealth of knowledge and experience to the table.

As evident from the above explanation, it is clear that the HR Audit consists of a rigorous risk-based framework to ensure an integrated, aligned and well-governed approach to auditing the National HR Standard. Not only does the audit process safeguard the integrity of the audits, it also ensures that the audits are adding value to organisations in terms of business impact.  Essentially, HR Audits provide you with an opportunity of improving the quality of your HR function and in doing so, contributing to sustainable business performance.

christine

Christine Botha, is Head of HR Audits at the SABPP.  The first Annual National HR Audit Report summarising the successes and challenges of the first year of HR audits will be launched on 17 September at the National HR Standards Roll-out on 17 September. You can follow news about the HR audits on twitter @SABPP1 or email Christine on hraudit@sabpp.co.za

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