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What Does It Mean To Self-Audit?
A self-audit is a multi-step process that, in this specific case, Human Resources (HR) can follow to reduce risks and mistakes within an organization. A self-audit includes regular check-ups on details within an organization that could be costly if unresolved.
HR can depend on doing things right the first time, like ensuring that all information on an employee’s I-9 form is filled out. But every now and then details like the employee start date might go unnoticed. This can lead to a costly fine if caught by federal organizations’ auditors such as Immigration and Customs Enforcement (ICE).
To self-audit, HR can follow some simple but useful steps to constantly monitor their own practices and records. These steps can include:
- Create auditing management: Decide who will be responsible for overseeing the audits and when they will conduct them.
- Organized record-keeping: Document all HR operations and list anything relevant to the scope of your organization’s activities.
- Conduct surveys for all the employees: This allows you to collect information on how HR is doing and what may need some attention.
- Analyze survey results and share them: Recurring questions or problems will be areas to concentrate on and resolve. Once addressed, share your feedback with employees to gain more insight and information on what can and needs to be done.
- Hold training sessions as needed: This will help reinforce existing HR practices and new ones as they come. An action plan for these training sessions and continual improvement would be recommended as well.
Self-audits are intended to be done within the organization and without external help. It adds another layer of responsibility for HR but ultimately will benefit the company immensely by protecting company assets and upholding workers’ rights and pay.
HR Asset Management
There are many aspects of an organization that HR will need to keep track of and manage. All of them are important and can cover a large range of topics from company taxes to employee work hours. The assets that HR will need to manage and keep track of include but are not limited to:
- Job postings and applications
- Selecting and hiring new employees
- Employee information such as rates of pay and salary
- Financial information such as turnover, cost-per-hire, compensations, etc.
- Interactions between management and employees
Every asset of HR needs to be self-audited and no part of it should be left out. It may seem like a lot, but there are simple and effective ways to manage all this information and help HR self-audit more easily.
ITAM: IT Asset Management
IT Asset Management (ITAM) refers to the process of keeping track of an organization’s resources and assets. It tracks specifically the use, maintenance, and disposal of all these assets while ensuring they are accounted for. An organization’s assets can include many different things such as software, hardware, employee information, etc. ITAM software can manage basically anything from company tools to tax paperwork.
HR can benefit from ITAM when self-auditing because it is an efficient system for reviewing and updating company information all in one place. With this, HR can more easily self-audit and avoid issues or inconsistencies within their organization.
If you have a larger organization, looking into ITAM software may be beneficial to keep track of all your employees’ information. Simpler means such as spreadsheets may be a more effective ITAM system for smaller companies by saving them money.
Internal Newsletters
Another helpful tool to move along the process of self-auditing continually is to send out internal newsletters to the employees. These newsletters can be sent out by email weekly or sometimes even daily. They are intended to remind employees of important practices they need to follow or information they need to update.
This way, employees can be more involved with HR, who in turn won’t have to specifically address them in order to fix potential errors found during self-audits. These newsletters are also a helpful informative tool that can be part of ITAM by utilizing resources such as company insurance out to the employees.
Some other important information that can be included in an HR internal newsletter might include but is not limited to:
- New hire announcements
- Company achievements and goals
- Policy changes
- Event announcements
- Updates on team projects
Consulting an External Auditor
Self-audits are intended to be completely internal. However, a viable option for organizations to self-audit is to bring in an auditor from outside the organization. Doing so can be beneficial because it allows for a fresh pair of eyes to review the company information and look for errors. It isn’t always necessary but can be beneficial, to gain an unbiased perspective on your organization’s activities.
External auditors can come from a variety of careers, all depending on which aspect of HR needs help. For example, concerning legal policies and procedures, you might enlist the help of a lawyer as an outside auditor. For financial accounts, an accountant would be an effective external auditor to ensure all financial paperwork is in order.
Whatever area of HR that needs external help in self-auditing will determine who you consult for help with the process.
Benefits of HR Self-Auditing
There are many benefits to self-auditing that are mostly internal. This means the benefits are mostly based on the successful prevention of possible future issues. The result is a more organized and efficient company. Some of these internal benefits include:
- Improvement of employee performance and compliance
- Protection from lost revenue
- Identification of billing or documentation problems
- Preparation for spontaneous inspections and external audits
- Security of company reputation and reliability
- Saves company time and increases productivity
An organization’s ability to find and resolve its own problems demonstrates responsible and reliable action. This all begins with HR and their constant efforts to verify company information. Corrections to issues save organizations from losing money, headaches, and potential fines or lawsuits.
Search for Common Mistakes
There are some HR mistakes and issues that are common and need to be looked out for especially during self-audits. There are other items that have major consequences for going unresolved and need to be a high priority for HR’s self-audits. Knowing these can give you a good place to start and potentially begin a checklist of items to go over during a self-audit.
Some of these major risks and common mistakes include:
- Mistakes in admitting federal or state family and medical leave
- Form I-9 Employee verification errors
- Failure to pay employees for overtime hours
- Failure to onboard and train employees adequately
- Missing legal deadlines
- Out of date employee handbooks
There never is a one-size-fits-all solution for these mistakes or for conducting regular self-audits. Finding a rhythm and system that works best for your company may take time, but it should be as involved and open-minded as possible.
The “Human” in Human Resources
Perhaps the most important aspect of HR and self-auditing to remember is that it all comes around to the people within the organization. Self-auditing ensures that everything is not just done right and fair for the company, but for the employees as well.
Paying close attention to the assets and resources is vital, but so is paying attention to your own efforts and priorities as an auditor. Greater awareness of what needs to be done to protect employee rights and pay, as well as a greater appreciation for their efforts within the company, will help you better self-audit and manage human resources.
Not only are the employees human, but so are you. It is normal and even healthy to make mistakes so long as you learn from them and seek to improve. Listening to the advice of others will help you in the process of self-auditing not only the organization but also in the process of becoming a more reliable auditor and employee.