Leadership

HR Audit Study 2016

25 February 2016|

Updated on 6 March 2019

The 2016 People Maters HR Audit Study asked companies in India Inc. about their HR auditing processes. With a detailed survey, expert opinions and in-depth interviews with leading companies with best practices, we present the findings of the study in this feature.

HR Audits is a process that is routinely undertaken in 8 out of 10 companies, but as many as 96 percent of organizations do not have dedicated HR resources for audits, according to the People Matters HR Audit Study 2016. In a first-of-its-kind benchmarking exercise, People Matters HR Audit Study asked companies in India Inc. about their HR audits procedures, which included the frequency of their HR audits, types of audits, length of an audit engagement, processes that are audited and benefits accrued, among others.

The assertions made through the study are a result of the compilation of the responses of the 72 companies that participated in the survey which was rolled out during December ’15 and January ’16 and aimed at learning about various HR audits practices in organizations to benchmark the audit procedures in India Corporation along with other notable metrics.

Qualitative interviews were also conducted with HR heads of leading organizations as a part of the study to understand their perspectives and frames of reference on audits and their respective organization’s best practices and examples. The most intriguing findings of the study revealed that almost half, that is, 48 percent of the companies do not perform audits to establish an “early warning system” for identifying issues before they become crises. This is also worrying and reinforces the notion that HR is a reactive function and does not identify business risks before they escalate into crises. Besides this, the dominant guiding objective of 8 in 10 companies has been found to be “examining organization's compliance with established regulations and/or company policies”. Dilpreet Singh, Vice President – HR, India

and South Asia at IBM, says that audits are instrumental for three reasons – for avoiding financial loss, process compliance, and risk assessment. But as mentioned, proactive risk assessment (or establishing early warning system) is not the guiding objective of audits in almost half the organizations.