HR Audit for Small Businesses New Jersey

An HR Audit is a comprehensive review of policies and HR practices to identify areas of strength and weakness and where improvements may be needed. The information gathered from the audit helps determine whether current HR processes comply with State and Federal regulations and support business goals and can help determine if an organization is properly utilizing their human capitol. The audit includes a summary of findings and recommendation for next steps.

An HR Audit includes a comprehensive discussion and review of current practices, policies, and procedures, and often includes benchmarking against organizations of similar size and/or industry. Specific areas examined in the audit include:

• Compliance with applicable federal and state employment laws
• Record-keeping (personnel files, I-9s, applications, etc.)
• Compensation/pay equity
• Employee relations
• Performance appraisal systems
• Policies and procedures/employee handbook
• Terminations
• Health, safety and security (OSHA compliance, Drug-Free Workplace, Workplace Violence)

An HR Audit is typically completed when we first engage with a client, so we can get a full understanding of their needs and design an appropriate fulfillment strategy. Subsequent mini, or follow-up HR Audits, can then be completed every year; however, these are much less extensive and tend to focus on and expand certain functional areas of importance to the client, such as the revamping of performance appraisals.

First, your company probably is out of compliance in some areas. We have yet to do an audit with a client and not find exposure. Employment laws and regulations are incredibly vast and ever-changing; it’s almost impossible for businesses to keep up. Second, this is why you have hired us. We will put a plan in place and execute it to get you in compliance as soon as possible. And if you are ever audited by an external agency (ICE, DOL, etc.), you will be able to show that you made a “good faith” effort to be in compliance, which often mitigates fines.

The cost of an audit depends on your company’s size but typically ranges from $825-$2400. The benefits are immeasurable.  First, if there are issues with I-9s, employment documentation, and the manner in which employees are classified and paid, and these issues are identified and cleaned up as a result of the audit, you could be saving anywhere from hundreds of thousands to millions of dollars in potential fines and back-pay. Second, if you utilize the audit to capitalize on your talent, providing employees with more direction on their job, giving them more complete and constructive feedback, putting them in the right “seats” on the “bus,” you can drive productivity and profitability in ways previously unseen and reduce many of the costs associated with recruiting and hiring, low morale, and turnover.