HR Audits highlight gaps and opportunities to improve HR functions: 6 lessons

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HR Audits highlight gaps and opportunities to improve HR functions: 6 lessons
by Christine Botha

Since the SA Board for People Practices (SABPP) in association with HR Future launched the first set of National HR Standards for South Africa in 2013, the HR Standard journey has progressed, not only within companies but also nationally and internationally.  Last year, at the 2nd National HR Standards Roll-out we launched the SABPP Audit Unit to audit companies against the National HR Standard.  Since then a strong pool of 120 HR Auditors have been trained, and some of them have already audited companies against the HR Standard.

This year the SABPP Audit Unit had a busy first seven months rolling out the National HR Standard and HR Audits.  To date nine audits were completed and we are very pleased to report that there are 21 more companies lined up who are preparing themselves to be audited later this year or early next year.

During the HR Audits conducted, we have made some interesting discoveries about the state of HR in a typical South African organisation.  The following six factors have emerged from the audits:

  1. HR teams are generally more ready to be audited that they give themselves credit for.

During the National HR Standards training workshops, we ask HR Professionals to assess their own readiness to be audited.  We compared these results from more than 200 organisations against that of actual HR Audits conducted and found that their current performance against the HR Management Systems Standard is of much better quality than they anticipated.  The results are reflected in the illustrations below:
Picture11

Picture22
The code to colours used in these illustrations have the following meaning:  Green (above 6) means that the Standard is achieved, Yellow (or amber) (between 5 and 6) means that minor adjustments are required in order to meet the Standard, and Red (below 5) means that the Standard requires significant improvement.  From the actual audits conducted, it is clear that talent management and HR Measurement are the most serious HR gaps in South Africa.

  1. It is all about integration, alignment and communication.

In all instances we have found that where HR Systems fail to achieve the Standard, it is due to lack of integration, alignment and communication.  In some instances exceptional work is being performed, but in isolation or in silos.  Even in cases where pockets of excellence have emerged within HR functions, these good practices are not adequately shared within companies.  With minor adjustments and focused effort, these areas can be easily improved by ensuring alignment takes place.

  1. Fit-for-purpose.

Some HR Professionals tend to think that it is all about policies and procedures.  While this is obviously true from a governance and operational perspective, it is important that such policies and procedures meet the necessary outcomes, i.e. be fit for purpose.  In evaluating this aspect, HR Auditors will look for the following evidence:

Has the Board defined and documented its policy and objectives for HR management in relation to the organisation’s core objectives?

Is this policy specific to the requirements of this organisation?

Are there too many or too few policies?

  • Who knows about the policy?
  • When last was this particular policy reviewed?
  • Is it used as a guide managers and internal auditors?
  • How does it relate to practices?
  • Does it have a measurable outcome?
  1. Size does not matter.

Regardless of the size of your company, the HR Standard is the minimum standard required.  If we compromise on the Standard, our HR will not achieve the desired results and will not add the value it aims to create.  Bigger organisations often have the benefit of more specialised resources in HR but battles to integrate the various functions due to more complex approval processes, operating in silos and internal politicking.  Smaller organisations benefit for fast decision making, outsourcing of specialised functions to external parties (or hiring the resource for a specified period of time) but battle with high volumes of work, excessive demand on resources and managers abdicating responsibility due to workload or lack of training or knowledge.  In fact, smaller organisations are at a higher risk than large organisations.  A large company can afford and survive a few HR set-backs, but a deficiency in the HR system of a small company can pose significant business risk.

  1. Executive support is critical.

We found a direct link between the qualities, consistency and value add of good HR Standard Systems and the commitment and support that HR receives from the organisation’s executive.  Where the CEO or MD is in full support of HR, HR excels.  Where the CEO or MD has little regard for HR, they fail to achieve the impact they desire.  This places additional burden on HR to take their rightful place in the boardroom, by improving the way in which they communicate their contribution and influence change within their own departments and the organisation as a whole.

  1. Measurement, measurement, measurement.

It is critical for HR to identify what they need to measure, how, when, where and how these results are used for reporting purposes, to influence decisions required, and to use this information to implement improvement measures.  If it cannot be measured, it is not worth doing.

In conclusion, it is evident that HR audits can play a significant role in identifying gaps and improving HR functions.  Using the National HR Management System Standard as a quality framework for improving the relevance and impact of HR functions, it has become a useful instrument to the sustainable success of HR work in a systematic and integrated way.  While excellence within the 13 HR standard elements is key, utilising, leveraging and integrating all 13 standard elements into a synergistic well-functioning system provides the best value for HR departments.  On 17 September at the 3rd Annual HR Standards Roll-out, the first annual HR Standards Report will provide more details, lessons and case studies about the first companies that have been audited.  Visit www.sabpp.co.za or www.hrfuture.net for more information and follow SABPP on twitter @SABPP1 for daily updates.christine

Christine Botha is Head of the SABPP Audit Unit and can be reached on hraudit@sabpp.co.za

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