By Anita M. Gavett, PHR, Lead Consultant, Virtual OfficeWare

The investment in effective management of human resources will keep your business compliant and prevent potentially costly litigation in the future.  Particularly in today’s economic climate, employees are more likely to sue an employer for adverse employment actions.  Ensuring that your organization and leadership team are compliant and effective with HR systems is paramount in protecting your organization and improving productivity of your greatest asset your employees.

 What are the risks of ineffective and noncompliant HR systems?

The financial impact of improperly managing employee relations or staffing issues can be immense.  Retaliation claims are one of the most common discrimination claims and are on the rise. According to the Department of Labor, EEOC intake, relief obtained and charges resolved hit record highs in 2011.  In addition, responding to even one wrongful discharge claim can cost your organization thousands of dollars in attorney fees and your staff’s time.  If the charge or complaint ends up going to trial, even if you win the case, it will cost your organization several thousand dollars.  If you lose, you could be looking at several hundred thousand dollars in settlements, compensatory damages for pain and suffering, punitive damages, attorney fees, and back pay and benefits. Not to mention loss of productivity to the organization and negative publicity to your company.

 How can I find out if my HR practices are compliant and effective?

One way to ensure that your organization’s HR systems are effective and compliant is to conduct a Human Resources Audit.  A HR Audit is a systematic, objective tool that assess regulatory and policy compliance in your organization to determine the effectiveness of your HR systems and those managing them.  The auditor partners with your leadership team to review your organization’s compliance and effectiveness in the following areas:  recruitment/selection/hiring; employee relations; performance management; training and development; compensation and benefits administration; payroll; and workers’ compensation and safety.

 Most HR Audits processes include:

• Interviewing key staff
• Reviewing relevant documents
• Completing a comprehensive questionnaire
• Compiling data and preparing a customized written report
• Assembling specific recommendations to improve the efficiency and performance of your practice’s HR functions.

The auditor will provide the organization with a comprehensive report comprised of data obtained from the audit.  The report will serve as a guide to follow when implementing change and resolutions to any areas of concern.  The report includes an overview of the organization’s current HR status, specific outline of areas of concern, and a specific action plan to ensure HR effectiveness and compliance.

 What are the benefits of a HR Audit?

In addition to identifying and understanding potential HR system noncompliance, conducting a HR audit and implementing the game plan derived from the audit will benefit your organization in several ways.  An audit will assist the organization in creating a HR business plan and identify ways to streamline HR work processes which will improve business operations.  Most importantly, an audit can identify ways to increase employee satisfaction and retention, which will positively impact the bottom line.

 How can a leadership team promote compliance?

Trained supervisory staff will also help to ensure that your organization is compliant with human resources laws and regulations.  Consequently, untrained supervisory staff can lead to noncompliant actions and potential claims that can cost your organization time and money.

A HR audit will also identify areas of training opportunity and best HR practices for your leadership and supervisory team. It is in the best interest of an organization to ensure that the supervisory team is well trained particularly with employment law, so that they can work together to ensure the chosen audit action plans are achieved.

Ensuring that your supervisors are well trained will empower them to lead their teams. Effective supervisory training can lead to improved employee morale and communication (both supervisory and subordinate) and better protection (against legal actions, disputes, or litigation). Effective and updated leadership skills and education of your supervisory teams will positively affect your bottom line. Training will also provide your supervisors with opportunity for growth in their positions, which will help an organization with succession planning goals and meeting corporate objectives.

 When organizations improve the performance and skills of supervisors they are improving the performance of everyone in the organization.  Supervisors with proper training will be able to better direct and lead their staff for a more fit organization.

Schedule your check up today.

Whether you conduct the audit yourself or utilize the services of a professional human resources consultant, keep in mind that a check up of your current HR practices will help develop your areas of current practices and bring your organization back into compliance. Remember, an ounce of prevention is worth a pound of cure and will save you a lot of money and time.

About the Author

Anita M. Gavett, PHR, is Lead Consultant with Virtual OfficeWare. She has over 15 years experience as a human resources generalist and leader in a variety of industries including HR consulting services, health care, construction and manufacturing, wholesale distribution, insurance, retail and communications. For more information, visit    www.virtualofficeware.net/hr-consulting-services.

 About Virtual OfficeWare, Inc.

Virtual OfficeWare enhances organization’s clinical, financial and administrative systems. As a one source IT vendor and provider of human resources consulting services, we offer solutions in HR management as well as provide product training, support, technical services and custom development. Our goal is to aid in the delivery of quality outcomes and leverage business performance.  Through the utilization of effective technology, we contribute to the overall success of physicians and other organizations and in turn help them to provide exceptional care and service to the communities they serve.