Laurdan Associates, Inc.

HR Audits

Ineffective, misaligned, and unlawful employment policies, procedures, and practices negatively affect an organization's employee relations, public reputation, employment brand, and competitiveness and can significantly threaten the bottom line.  Negative employee relations and unlawful employment practices increase the frequency of third party intervention.  Misaligned human capital strategies reduce the contribution of human capital and the valuation of the organization. 

In response to these threats, top management, boards of directors, internal auditors, and HR professionals are increasingly using HR audits a management tool to assess alignment, to ensure compliance, to reduce the exposure to employment related liabilities, and to improve the value of the organization's human capital.  Like financial audits, HR audits are being used to assess management activities, identify policy, procedural, and process weaknesses, perform due diligence, benchmark best practices, and to quantify and evaluate outcomes.

Laurdan Associates, Inc., an internationally recognized thought leader in HR auditing and employment practices liability (EPL) risk management, has developed a suite of HR auditing and EPL risk management products and services that help organizations increase the value of their human capital while reducing their exposure to EPL related losses.  In addition to ELLA^®, the Employment-Labor Law Audit, the leading HR auditing and employment practices risk assessment process, Laurdan Associates conducts on-site and off audits, assists organizations develop internal auditing tools, develops internalized experiences rating programs, conducts employee and applicant surveys, trains clients' staff or the use of HR audits, and develops other assessment methodologies.

Using the HR Audit Model™ to assess the five critical components of the HR auditing process, Laurdan's approach is to help employers identify and assess problems, then develop cost-effective solutions.  In addition to a review of HR managment practices, procedures, and processes, Laurdan's HR auditing activities include:

Quantifying and measuring outcomes
The best employment practices are of limited value if they produce the wrong or ineffective outcomes.  A critical element of Laurdan's HR audits is the determination of current and potential outcomes.

Comparing activities and results to standards and goals
Like financial audits, Laurdan's HR audits compare activities and results to external and internal standards and to expected and budgeted goals.

Reviewing structural, organizational, and cultural issues
The effectiveness of various employment policies, practices, and procedures is determined by a number of external and internal factors.  Laurdan's HR audits help identify and assess those factors.

Assessing the employment brand
Like product branding, employment branding influences customers' (employees') desire and willingness to buy the product (becoming and staying an employee).  Laurdan's HR audits help assess the organization's employment brand.

Assessing written and virtual policies

All organizations have policies, procedures, work rules, and important messages that they communicate to their employees.  Sometimes HR management issues are addressed in a memo distributed to all employees; sometimes they are posted on a bulletin board; and sometimes they are communicated orally by supervisors or management.  While virtual policies are not always be incorporated into a formal employee handbook, they have the same effect, frequently contradict written organizational policies, can cause employee confusion and misunderstanding, and can lead to possible disparate treatment.  To help reduce areas of conflict, Laurdan identifies and reviews both written and virtual policies.

Assessing internal controls

Internal controls are processes, test, and assessments that help ensure compliance, manage risks, and help ensure the achievement of organizational goals.  Laurdan's HR auditing activities include assessments of the effectiveness and efficiency of HR management policies, practices, and procedures; the reliability of HR management reporting; and the level of compliance with laws and regulations, industry and professional standards, codes of ethics, organizational policies, and budgets

Risk assessment:  Risk assessment is the identification of current and/or future events that have the potential to cause loss, peril, or vulnerabilities; or that create new opportunities for the organization to achieve its business objectives.  Risk assessment provides management with the information to make informed decision about the allocation of the organization’s human, physical, and capital resources and about effective ways to eliminate, mitigate, control, or transfer risks.  Human resource and employment practices liability risk management include an assessment of: 1) employment law and regulation compliance failures; 2) lost business opportunities due to the failure to attract and hire top talent; 3) intangible asset losses due to turnover of top talent and key employees; and 4) lower profitability due to the inability to control labor costs.  Laurdan’s HR auditing activities include assessments of external and internal factors that impact human resource management and employment practices – including the economy; legal, regulatory, and litigation trends; and changes in the workplace and work force.