Why an HR Audit is Important for your Small Business?

Wednesday March 31, 2021

Before you dismiss the idea of a human resources audit, take a moment to consider that, according to Forbes, “somewhere between 36%-53% of small businesses are involved in at least one litigation in any given year and 90% of all businesses are engaged in litigation at any given time”.

Given that litigation is a very real possibility for small-business owners, a comprehensive review of HR policies, procedures and practices is not just recommended – it’s essential.

A HR audit is not something you need to do yourself. The HR Dept can conduct a HR audit for your company for free, to evaluate your processes and ensure your business is compliant. We can help you minimise your risk of litigation, improve employee retention and maximise your business’ growth.

We recommend a HR audit to check that your business is up to scratch on the following:

  • Compliance: A comprehensive HR audit is important because it assesses recruitment and selection processes, as well as how your small business deals with terminations and redundancies. A HR audit ensures your business is adhering to the most up-to-date Australian laws and legislations around employee contracts, workplace guidelines and disciplinary procedures. This isn’t something you can afford to get wrong!
  • Performance: A HR audit can take a close look at staff performance, to ensure that your team leaders and managers are coaching and mentoring appropriately. If necessary, a HR audit can identify which supervisors and managers need leadership training or performance improvement steps.
  • Salaries: A HR audit determines whether your salaries and wages are competitive, and ensures the benefits you’re offering are appropriate, legal and competitive. A HR audit can help address inequities or inconsistencies – ultimately reducing staff turnover and increasing your attractiveness as an employer.
  • Employee classification: A HR audit can help you determine how an employee should be classified – whether that’s as a part-time contractor or full-time permanent member of staff. A HR audit will accurately classify your employees, removing the ambiguity around freelancers, contractors and staff members.
  • Employee turnover: A HR audit can identify reasons why employees may be leaving. As a small-business owner, it’s difficult to take a step back and answer the important questions around staff retention and turnover. A HR audit will provide insights into a business’ shortcomings – whether that be the rate of pay, the benefits on offer or low morale across the workforce. A HR audit can provide useful insights to help you reduce employee turnover.

Have a chat to the friendly team at the HR Dept to find out how we can help with a complimentary staff audit.

Preventing People Problems

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