HR audit helps in assessing the contribution of the human resource processes to the organization and take improvement measures. It is like an regular health check-up which instills a sense of confidence in the management and the HR functions of an organization.   It ensures that one’s HR process is functioning effectively, compliant with local laws and is linked to organization’s strategic goals.

1. www.verde.co.in
HR Audit
How an organisation
can get Benefits out
of it?
measure & improve your
HR compliance and
performance

2. Inspiring Excellence
about the presentation
HR audit helps in assessing the contribution of the human resource processes to
the organization and take improvement measures. It is like an regular health check-
up which instills a sense of confidence in the management and the HR functions of
an organization.
It ensures that one’s HR process is functioning effectively, compliant with local laws
and is linked to organization’s strategic goals.
www.verde.co.in

3. Inspiring Excellencewww.verde.co.in
Now on the subject:
HR Audit

4. Inspiring Excellence
What is HR audit
HR audit is an in-depth analysis of all people related initiatives to
identify strength and areas of improvement
An HR Audit can help to ensure legal compliance while measuring
the effectiveness of HR programs and practices

5. Inspiring Excellence
Objectives of HR audit
• improve efficiency of HR processes and practices
• determine corrective measures for HR practices that don't address
employee and employer needs and assess compliance with international
standards and global best practices
• state and local regulations

6. Inspiring Excellence
HR Audit
Measurement &
Improvement of
Statutory
Compliance
Process
Improvement
based on audit
findings
Improvement in
• Productivity
• Employee Satisfaction
• Stakeholders’ confidence
• Brand image
• Customer satisfaction
Unleash your productivity
with HR Audit

7. Inspiring Excellence
components of HR audit
Mandatory components
 HR governance system
 Legal compliance
 People competence
 Human resource cost
Optional
• Manpower planning & forecasting
• Recruitment, selection, Induction
• Performance management
• Compensation benefits
• Career development & succession planning
• Reward recognition & employee benefits
• Employee exit
• Industrial relations and ethical practices
• Human resource information system
• Occupational health & safety of employee
• Corporate social responsibility

8. Inspiring Excellence
Four stage HR audit
process

9. Inspiring Excellence
Audit Plan
 Offsite information
collection
 Development of
custom built audit
protocol based on
People Capability
Maturity Model
(P-CMM)
 Selection of audit
team
 Preparation of audit
plan
 Communication
1
Onsite Audit
 Opening Meeting
 Discussion with top
management
 Self assessment
(cross functional
perspective (sampling)
 Interview of different
process owners
 Process / task
observation
 Document Audit
 Closing Meeting
Audit Report
 Findings are rated through
assessment protocol
 Finalization of HR rating
 Finalization of Risk rating
(prioritization)
 Preparation of
Recommendations in the
areas of Strategy, People,
Process, Documentation
& Infrastructure
 Report with strengths and
areas of improvement
 Issue of Certificate
3
Audit Follow up
 Submission of
improvement plan
by the organisation
 Closure of
improvement plans
and programs
 Re-audit after one
year
 Re issue of certificate
with new rating
42

10. Inspiring Excellence
Challenges
Compliance
Challenges
Performance
Challenges

11. Inspiring Excellence
• Help to comply legal requirement
• Identify the focus areas for management action
• To improve contribution of the HR function to
the achievement of our business objectives.
• HR objectives can be aligned with strategic
objective
• Reduce the HR cost
• Contributee in people capacity development
• Performance Appraisal Systems
Benefits

12. Inspiring Excellence
Role of HR manager in HR audit
• To initiate the process of HR audit
• To make the corrective action plans based on
the identified issues
• Periodic checking of the health of the system
• Give input to the top management for
business decision making
Role of compliance manager in
HR audit
• To ensure statutory compliance
• To ensure compliance with
Companies Act, 2013
• Input for CSR planning
• Cost benefit analysis in HR

13. Inspiring Excellencewww.verde.co.in
This is a
knowledge
initiative
About the author:
Madhabi is a consultant of Verde Ventures, which provides consulting and advisory services in the field of
business management. She worked in manufacturing and service industries in different people functions
as an auditor, consultant and trainer. She has expertise in process development, strategic management in
the areas of people excellence, sustainability and business excellence.
Madhabi is a trainer, consultant and assessor and worked with more than 100 organizations across India.
Madhabi is masters in human resource management and presently pursuing doctorate in management.
She is a certified Neuro Linguistic programme practioner and trained social impact assessor. She has
conducted 100+ assessments in different industries in the areas of HR, legal, social, CSR and sustainability.
Her knowledge of industrial relations and labour laws helps her to contribute in the HR audits effectively.
Madhabi can be reached at madhabi.guha@verde.co.in

14. Inspiring Excellence
What Verde does?
Verde is an international advisory firm involved in the field of Responsible
Business, Business Excellence and Risk Management.
1
Assessment
Identifying the
gaps in a
system against
standard(s) and
requirement. to
meet
compliance and
facilitate
improvement.
2
Consulting
Supporting &
handholding
organisations
to solve their
problems and
to meet the
gaps identified
during the
assessment or
any other audit.
3
Training
Empowering
people to
perform their
duties
effectively and
efficiently.
4
Assurance
&
Certification
Ensuring that a
process,
product, or
service meets
relevant techni
cal standards
and fulfils
relevant
requirements.
www.verde.co.in
Verde services in
People Excellence
• HR Audit
• HRD Climate Survey
• Workplace Stress
Management
• Human Resource Process
Management
• Performance Management
• Strategic Competency
Management
Safety,
Health &
Environment
People
ExcellenceFood Safety
Social
Compliance
Quality &
Business
Excellence
Information
Security