A small business in Providence hires a new employee after interviewing an impressive field of applicants. But one person not picked for the job sues, alleging discrimination, and the business is fined when an investigation reveals the HR manager who conducted the employee search failed to post a job description when advertising the position.
It’s a theoretical scenario, but it happens all the time, and businesses can avoid such lawsuits by regularly auditing their human resources departments to ensure their programs and procedures are in line with the law, according to HR experts.
“Auditing your HR department can be very useful, because you don’t know what you don’t know, and it’s certainly worthwhile to protect yourself as an employer,” said Joyce Maynard, vice president of HR Express, a human resources services firm in Johnston.
Especially for small businesses, Maynard and other human resources consultants recommend regular HR audits under the watch of an employment attorney. Much like a financial audit, an HR audit essentially takes a fine-tooth comb to every facet of a business or organization’s human resources practices.
Audits often turn up small but critical procedural omissions that expose businesses and organizations to lawsuits, such as failing to document even a quick meeting between a manager and an employee to discuss unsanctioned Internet usage, Maynard said.
Other potential problems that an HR audit will reveal include whether a business or organization is paying women and men equally when they are equally qualified, in the same position or contributing equally, or whether an HR office is keeping confidential files for employees’ medical information and other private matters that a manager should not be privy to, she said.
In particular, Maynard said audits call attention to recruiting practices that are at odds with the law, such as failing to notify job candidates when conducting criminal background checks, or failing to interview candidates from a variety of racial backgrounds.
“If you’re an employer of 100 or more employees, you’re supposed to be looking at the diversity of where you are recruiting from,” she said. “So if you’re located in Providence, are you recruiting from a diverse applicant pool to avoid trouble with discrimination laws?”
HR audits range in length and cost depending on the size and complexity of the business or organization, Maynard said. A small business can typically conduct a meaningful audit in half a day; an HR audit for a larger company with several locations can take three to five days. The average HR consultant charges between $1,000 and $4,000 a day, she said.
Bryant University’s HR department has conducted comprehensive internal audits on a regular basis since 2003, at the same time that the department brought in new technology to manage its programs and services, said Linda Lulli, associate vice president for human resources.
“We were implementing new technology, and it evolved into a planning discussion of, ‘Maybe it would be great to have a longer-term approach and a more comprehensive strategy for looking at service delivery and operational effectiveness,’ ” Lulli said. “We really broadened it to not only encompass making sure [that] we’re in compliance with appropriate regulations, laws and procedures, but also to ensure that we’re looking at a continuous improvement orientation.”
The HR department at Bryant is responsible for roughly 770 employees and oversees about 600 more student employees through the academic year. Each year, Bryant’s HR audit focuses on an individual aspect of the department, Lulli said. Over the last three or four years, the audits have focused on Bryant’s rewards, compensation and benefits programming, its HR systems infrastructure, and the school’s recruiting and retention strategies.
Lulli’s team measures its progress by compiling metrics and translating them into an “HR scorecard,” she said.
