Form Follows Function: How to Build the HR Framework that Supports Your Business
“Form follows function.” This often quoted phrase, coined by American architect Louis Sullivan, was uttered to convey the idea that the purpose of a building should be the starting point for its design. This same principle applies to the role of Human Resources within your business. How it supports your business should be the foundation of your human resources strategy.
So, where to start?
There is no “one size fits all” human resources strategy. HR supports all businesses from large to small, profit to non-profit, union & non-union, financial services, construction, education, manufacturing, etc. – you get the idea. Regardless of the type of business or industry, a properly designed human resources strategy can help to accelerate growth and profitability while reducing risk and liability.
Sounds good, right? Even better news is that no matter what industry you’re in, an HR Audit is the first step toward building an HR framework that truly supports your business.
What Is An HR Audit?
An audit is defined as “an official inspection of an individual’s or organization’s accounts, typically by an independent body.” An HR audit is an important high-level assessment tool for companies seeking a more efficient and proactive approach to employment matters and workplace compliance issues. It is designed to:
- Review current employment-related policies, procedures, documentation and systems to determine effectiveness of implementation
- Assess overall compliance in each of the above areas
- Identify best practice HR processes in line with strategic business goals
As with a financial audit, an HR audit is best conducted by an experienced outside consultant. Engaging an outside consultant to complete your audit gives you an unbiased assessment. However, an audit should be conducted at least annually regardless of whether you go with an outside firm or perform one internally.
What Does the Audit Include?
In the Gartner 2019 Future of HR Survey, 843 HR leaders agreed on three areas crucial to driving business success: building critical skills and competencies, strengthening the company’s current and future leadership bench, and improving the employee experience. All of these areas are examined as part of a comprehensive HR audit. An important part of the audit is examining risk from a legal and compliance perspective and then looking at industry best practices.
As every company is different, every audit is customized. Typically the following areas are examined:
- Prevalent issues affecting the company’s industry – this could include both internal and
external factors – regulations, politics, current economy, environmental issues, etc.
- Culture/Climate – this includes the company’s core values and employee engagement. Some companies don’t have an answer when asked, “What’s the culture like here?” Or worse yet – some have called it “the land of the misfits.” If the existing culture (or lack of it) is an issue, your HR audit will help you to identify what you want your vision and core values to be.
- Recruiting, Hiring and Onboarding – How are they currently handled? Are your methods effective? What can be done to improve things? Are your job posts compelling? Do you leverage social media? Online recruiting? Try to think of recruiting, hiring and onboarding as a marketing campaign; this approach can help you to stay relevant and competitive.
- Employee Relations – Employees are the heart and soul of every company, yet employee relations processes don’t always support that. In an era where there are more positions available than can be filled, getting your employee relations right is important. An HR audit should examine:
- Employee Benefits – If you’re hiring a younger workforce, benefits might not be as important as work-life balance would be. But an older workforce will place more value on health coverage. It’s important to be purposeful about what your benefits program should look like and customize your strategy so it’s meaningful to your employees.
- Employee Files
- Employee Handbook – this is unique to your company – no two are alike!
- Employee Discipline and Documentation
- Job Descriptions/Organizational Chart
- Termination Process
- Safeguard your business by addressing compliance in relation to:
- Equal Employment Opportunity (EEO) and Affirmative Action Compliance
- Labor Law requirements for FMLA, ACA, and etc.
- OSHA/Safety/Workers Comp
- FMLA/PTO/Time Off
- Performance Management/Salary Management – how does your process compare to industry benchmarks and best practices?
- Leadership Training – are you equipping your team with the leadership skills they need to help your company grow? Are you creating opportunities for leadership? ConnectedHR’s Learning Series is a great resource.
- HR Action Plan – this is the end result of the audit. It is built to support your company’s unique vision and culture.
When it comes right down to it, by building an HR framework to improve the employee experience, you can have a profound impact on the success of your company. Improving the employee experience was identified as one of the biggest challenges for companies in 2019 according to the 2019 Deloitte Global Human Capital Trends. It found that, “Eighty-four percent of our survey respondents rated this issue important, and 28 percent identified it as one of the three most urgent issues facing their organization in 2019.”
The HR Audit is your first step toward addressing the employee experience and creating a compliant and satisfying work environment for your employees. The experienced team at ConnectedHR can help. If you’re intrigued, you might be interested in reading the book, Traction: Get a Grip on Your Business by Gino Wickman. The book features EOS®, the Entrepreneurial Operating System, a process that ConnectedHR embraces. Or, if you’re ready to start your audit, let us know.