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The threats and risks from human capital management issues are increasing. They are no longer measured in only fines, penalties, and awards for non-compliance. Human capital management affects keys business metrics, including the organization’s valuation and credit rating. Further, improper human capital management significantly reduces managerial prerogatives and seriously damages the organization’s reputation and employment brand. Thus, HR audits have become a critical tool in identifying problem areas and are evolving from an ad hoc audit activity to a critical element of organization's risk management and compliance processes.

In this environment, HR audits have become an important activity in identifying current and potential problems, and a critical element in demonstrating the organization’s commitment to addressing key issues.

Numerous external and internal forces and factors have an impact on the demand for and scope of HR audits. First, in the global economy, human capital has become for many organizations the single most important determinant of competitiveness, productivity, sustainability, and profitability. Increasingly, the organization’s human capital is the source of innovation and a driver of business success.  

Second, a confluence of economic, political, and social factors, including corporate scandals, the failure of the financial industry to adequately assess risks, and increasing stockholder initiatives, have resulted in increased statutory and regulatory requirements, a call for greater transparency, and increased internal and external audit activity.

Third, governmental agencies have become more active — some would argue more aggressive — and have committed more resources to conducting assessments of employment policies and practices. Importantly, the EEOC, the OFCCP, U.S. DOL, and ICE have advised employers that they consider self-assessments and audits a “best practice.”

This session discusses the development and use of HR Audits in answering such questions and addressing such critical risk management issues as:

  • How effective is your organization’s human resource management activities?
  • Are your human resources management activities helping you achieve business objectives?
  • Arce your employment policies and practices creating material risks and liabilities?
  • What are your organization’s critical issues that should be audited?
  • What HR audit tools and processes should be used in auditing your organization?

  • HR professionals
  • Internal auditors
  • External auditors
  • Risk managers
  • Compliance officers
  • CEOs
  • CFOs

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Ronald Adler is the president-CEO of Laurdan Associates, Inc., a veteran-owned, human resource management consulting firm specializing in HR audits, employment practices liability risk management, HR metrics and benchmarking, strategic HR-business issues and unemployment insurance issues. Ronald has more than 42 years of HR consulting experience working with the U.S. and international firms, small businesses and non-profits, printers, insurance companies and brokers, and employer.

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