The threats and risks from human capital management issues are increasing.  They are no longer measured only in fines, penalties, and awards for non-compliance. Human capital management affects key business metrics, including the organization’s valuation and credit rating. Further, improper human capital management significantly reduces managerial prerogatives and seriously damages the organization’s reputation and employment brand.  Thus, HR audits have become a critical tool in identifying problem areas and are evolving from an ad hoc audit activity to an important element of organizations’ strategic, risk management, and compliance processes.

Numerous external and internal forces and factors have an impact on the demand for and scope of HR audits.  First, in the global economy, human capital has become for many organizations the single most important determinant of competitiveness, productivity, sustainability, and profitability.  Increasingly, the organization’s human capital is the source of innovation and a driver of business success. 

Second, a confluence of economic, political, and social factors, including corporate scandals and increasing stockholder initiatives, have resulted in increased statutory and regulatory requirements, a call for greater transparency, and increased internal and external audit activity.

Third, governmental agencies have become more active — some would argue more aggressive — and have committed more resources to conduct assessments of employment policies and practices.  Importantly, the EEOC, the OFCCP, U.S. DOL, and ICE have advised employers that they consider self-assessments and audits a “best practice.”

In this environment, HR audits have become an important activity in identifying current and potential problems, and a critical element in demonstrating an organization’s commitment to addressing key issues. 

Understanding and measuring the importance of your organization’s human capital has taken on new importance. How effective is your human capital in helping your organization achieve its business objectives? Do your employment practices create material risks and liabilities? Have you identified and are you managing key human capital decisions? Is your organization prepared for numerous changes in critical employment issues—including the use of AI?

This session discusses the development and use of HR Audits in answering these questions and in addressing critical risk management and due diligence issues.