Why is an HR audit important?

An HR audit helps you to fully understand how effective your people processes are, to give you an idea of how to get the best out of your teams, ensuring they are motivated, engaged and performing to the best of their potential.

Here, we take a look at the value an HR audit brings and why a regular review of your HR processes is essential.

Conducting an HR audit allows you to review how your business manages some of its most critical processes and policies to identify what’s performing well and where there’s room for improvement.

It’s a bit like taking your car for an MOT or visiting the Dr for a health check. On the surface things might appear to be fine, but closer inspection could reveal a different story. Looking at your processes and procedures closely offers you the same opportunity to identify what your business could be doing better and empowers you to enact positive changes within your organisation.

Benefits of conducting an HR audit

A greater understanding of your business. An enhanced relationship with your employees. A way to streamline and create cost savings. Reviewing your HR workflows through the lens of an HR audit opens up a multitude of value-adding benefits to your business.

Increased employee engagement and retention

HR plays a pivotal role in an employee’s experience of working for your business, and that relationship begins before they’ve even set foot in your organisation.

An HR audit gives you an opportunity to review how your business engages with your employees through ways such as on-boarding, benefits, and booking holiday. Any insights you gather can be used to make improvements that can help to increase employee satisfaction, leading to better reviews of your company on sites like Glassdoor.

This can have the positive benefit of attracting new talent to your organisation, as well as helping you to retain staff you want to keep.

The assurance that your business is compliant

As an employer, you have the responsibility to comply with employment laws, internal policies such as equal opportunities hiring, and registering employee PAYE with HMRC.

Many processes and functions within your business are strictly governed by law, and non-compliance can result in substantial penalties and fines. An independent HR audit allows you to make sure you’re conducting your business according to the latest legislation, while doing everything by the book to avoid damaging your reputation or your professional integrity.

Identifying opportunities to cost save and streamline

An HR audit is also a great way to identify areas in which you can run your business more efficiently or better utilise your resource, perhaps by outsourcing certain functions or moving from a manual process to a digitised or automated one.

By taking time to review the current processes and policies you have in place, you can gain a better understanding of which tasks are most time-intensive, error-prone, or costly; challenging yourself to find solutions that free you up to distribute your time more evenly, while saving money.

Not all changes need to be substantial, an HR audit could reveal some minor tweaks you could easily make to improve a particular way of working. An HR audit forces you to confront things head on, and implement changes that add immediate long-term value.

Conducting an HR audit for the first time can be daunting. Fortunately, there’s plenty of resource available to help you. Go to for more information on the HR audit process and how you can gain professional support from HR professionals who can audit your organisation and streamline your HR function.