TPO HR Audits: All Gain, No Pain

May 14th, 2015
Written by: TPO

From time to time we talk to TPO Consultants about their experiences with clients across different aspects of the business and HR spectrum. In this article we get the unique perspective of TPO consultant Christine Stout, who has not only conducted several comprehensive TPO audits, she has also experienced the value of a TPO audit while in a previous role as VP of HR.

Q: Christine, what usually triggers an HR audit? What’s happening in the business that leads to it?

A: It could be several things: Sometimes the company is new enough that it has no formal HR presence and isn’t sure where they stack up as it relates to HR programs and processes that would be appropriate for a high functioning organization. Another scenario is that they’ve had an issue or problem and want to make extra sure they’re buttoned up. Or it could be an organization that has a good handle on their HR function but wants to take things to the next level. They want to get a prioritized list of action items to work on so they can up their game.

Q: So it sounds as though the audit is triggered by an overall feeling more so than a specific business issue?

A: Not necessarily. In many cases there are compliance questions or challenges and the senior leadership team doesn’t have a good understanding of what is and isn’t required by Federal, State and Local employment laws. Or there are issues related to employees, such as Performance Management, Employee Onboarding or other topics that may have come up in employee reviews or surveys or exit interviews.

Q: When you hear HR ‘audit,’ you might tend to think of a very disruptive, invasive and lengthy process. Is that the case?

A: Actually, it’s not disruptive at all and there is a wide spectrum of options available. For the things a company currently has in place, we’re giving them a read on what we see. And if they’re not doing something, for example, Onboarding, we simply make note of that and move on to the next thing. The purpose of the audit is not to try and fill gaps or create anything. The intent is to get a full and accurate list of priorities that are really going to have an impact on the client’s business and on the employee experience.

Q: How long does an HR audit take?
A: It ranges, but generally it takes a few hours to assemble all the information we request before we come on site—the employee handbook, a sample of employment files, policies, etc. If there’s someone in the company who knows where everything is, then that step is pretty straightforward. We always do a physical tour to review things like safety and the required postings. We review documents and online files and ask questions of the HR point person—but most of that work is independent and doesn’t require much, if any, of the client’s time.  So from the kickoff to wrap-up where we present the findings, it’s about 30 – 60 days.

Q: What are some of the reactions clients have when you present the audit findings?

A: I’ve never seen a negative reaction. Clients are relieved to have a baseline—to have visibility in an area where they had little or none before. Our recommendations are very clear—it’s basically a roadmap with specific recommendations on how they should move forward to rectify areas that may not be at 100%. They feel very empowered to make changes—and, with TPO, they have a partner to help with more complex things.

Q: What happens after you present the findings?

A: There’s a range—in some cases the client asks us to come back the following week to execute one or several of the recommended fixes. Sometimes they say, “We get what we need to do.” Then they go off and do it and might call us two months later to come in and do a spot check.

And in some cases the client asks TPO to implement all or most of the audit recommendations.  In fact, I was hired as the VP of HR at an organization just after TPO completed an audit. On my first day the CEO handed me the results and said ‘here’s your road map.’ As an HR pro it was a great thing for me to come in and have the audit already done. It was a huge time saver and helped me ramp up quickly. 

Q: Bottom line, Christine, what’s the value of an HR audit?

A: Ultimately it is peace of mind for a senior management team that things are as they should be from two perspectives: First, if someone should come knocking—whether an auditor, regulator, banker, investor or potential acquirer—you’ll be buttoned up and ready. And second, optimizing employee metrics such as performance, satisfaction and retention that are key to achieving the overall business results.