Human Resource Management is the process of managing people in organisations in a structured and strategic manner. Various goal-orientated HR strategies and/or processes are normally in place to ensure an organisation functions optimally by effectively applying its human capital.

An HR Audit is the process of examining policies, processes, practices and/or the organisational climate with respect to an organisation’s HR function. The purpose of the audit is to determine the strength and weaknesses in the HR system, and all issues which require resolution.

The aim of the HR Audit is threefold:

• Identifying human resource relevant areas which are currently absent and/or need organisational improvement
• Determining the organisation’s level of compliance with relevant labour legislation, employment regulations and good practices
• Assessing the organisation’s efficiency and effectiveness of its HR services in achieving operational and strategic goals and objectives

The following can be considered some of the advantages of an HR audit:

• Identify the HR function’s contributors to the organisation
• Determine compliance deviations in policies, procedures and labour legislation
• Stimulate uniformity in the implementation of processes
• Keep up to date with and implement relevant labour legislation, good practices, technology and latest HR trends and requirements to ensure maximum efficiency
• Identify potentially high-risk job areas, policies or practices
• Reduce HR costs through more effective personnel procedures

Organisations that conduct an HR audit for the sole purpose of compliance, will ultimately enjoy an improved organisational climate and healthier bottom line. All compliance related labour legislation and good practices will be adhered to, and will ensure minimum employment benefits.

Organisations that prioritise maximum benefit of such an audit, will be able to use the results to develop their most important business resource successfully, i.e. their human capital, and also to align all relevant business processes strategically to ensure best possible planning and execution.