A Human Resources Audit is a comprehensive method (or means) to review current human resources policies, procedures, documentation and systems to identify needs for improvement and enhancement of the HR function as well as to ensure compliance with ever changing rules and regulations. An Audit involves systematically reviewing all aspects of human resources, usually in a checklist fashion.

Sections of review include:

> Hiring and Orientation
> Benefits
> Compensation
> Performance evaluation process
> Termination process and exit interviews
> Job descriptions
> Form review
> Personnel file review

The purpose of an HR Audit is to recognize strengths and identify any needs for improvement in the human resources function. A properly executed Audit will reveal problem areas and provide recommendations and suggestions for the remedy of these problems. Some of the reasons to conduct such a review include:

Ensuring the effective utilization of the organization’s human resources
> Reviewing compliance concerns with a myriad of administrative regulations
> Instilling a sense of confidence in management and the human resources function
> Maintaining or enhancing the organization’s and the department’s reputation in the community
> Performing “due diligence” review for shareholders or potential investors/owners
> Establishing a baseline for future improvement for the function