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HR audits are designed to help your organization focus its attention on its human resource management practices, policies, procedures, processes, and outcomes by providing you with a structured and systematic series of questions about key compliance, risk management, internal auditing, and human resource management issues. As an auditing process, HR audits are designed to help your organization identify potential and actual problem areas, help assess the effectiveness of HR management activities, help assess weaknesses in HR internal control processes, and help assess human capital strategic and compliance related risks. HR audits then typically provide suggestions for corrective action.
Importantly, HR audits consider human capital related risks and opportunities from an enterprise risk management (ERM) perspective. That is, HR audits take a holistic approach in assessing human capital risks and attempts to indicate the interrelationships and interactions between HR and other management and organizational issues.
Recognizing that no two employers are alike and that the practices, policies, and processes that may be appropriate and effective for multinational corporations may not be appropriate for small and medium size companies or non-profits, an organization's HR auditing should help it develop and tailor employment practices, policies, procedures, and processes to meet its specific needs. Thus, your HR audit should first provide your organization with the "right" questions to ask about various employment practices issues; then help you determine the optimal answer for your organization.
Thus, while HR audits alone will not guarantee that your workplace will be selected as a "best place to work" or be free from all legal challenges, they will serve as a guide through the maze of human resource management best practices and employment and labor laws and regulations. HR audits will further enhance the value of your organization's human capital, enhance your organization's competitiveness, and reduce your organization's exposure to employment practices liabilities.
Surveys of organizations identify the human capital risk as one of the most important risks facing organization and one of the least effectively managed. Meanwhile annual surveys of CEOs concerning high-impact risks, consistently ranks the "availability of key skills" as a critical risk a risk-if not effectively managed-can negatively affect the achievement of strategic and business objectives, negatively affect competitiveness, and hamper the organization's ability to innovate.
HR experts and business leaders further note that misaligned, ineffective, and improper human capital management policies, practices, and processes create financial, operational, and reputational risks that can threaten an organization's bottom-line, adversely impact sustainability, and reduce the organization's value for its stakeholders. Conversely, effective human capital risk management can create a competitive advantage, create new business development opportunities, enhance the effective deployment of resources, and create value.
As a result, organizations that effectively manage their human capital risks can increase the value of their human capital, be better positioned to seize new business opportunities, be more resilient to volatile markets, and more responsive to political and governmental constraints.
Ronald L. Adler, president of Laurdan Associates Inc. has 42 years of HR consulting experience and has served as a consulting expert on work force, workplace, and HR management issues for The Wall Street Journal, HRMagazine, and other publications and newspapers across the country. Mr. Adler's research findings have been used by the Federal Reserve Board, the EEOC, the National Conference of State Legislatures, the National Federation of Independent Business (NFIB), insurers, and international organizations.
Mr. Adler is a frequent lecturer and author on HR management, employment practices, and UI issues. Mr. Adler is the author and editor of the Employment-Labor Law Audit (ELLA), the internationally recognized HR auditing and employment practices liability risk assessment process.
Mr. Adler is an adjunct professor at Villanova University where teaches a graduate level course in HR Auditing. Mr. Adler is also a certified instructor for The Chartered Property Casualty Underwriters (CPCU) Society on employment practices liability and HR auditing issues and has conducted continuing education courses for the American Institute of Certified Public Accountants (AICPA) and the Society for Human Resource Management (SHRM) on HR management and HR auditing topics. Additionally Mr. Adler has served as an adjunct instructor at the Baltimore City Community College on workplace diversity and sexual harassment.
Mr. Adler is an appointee to State of Maryland's Unemployment Insurance (UI) Oversight Committee and previously served as an appointee to the State's UI Funding Task Force, the UI Advisory Committee, and the state's Workforce Training Initiative. Mr. Adler has served as a moderator at the State of Maryland's Annual Human Relations Conference and at the state's Annual Small Business Conference.