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Getting the Basics Right

Have you ever had an HR Audit?

A full HR Audit can look at any potential pitfalls in current policies and documentation and can recommend remedial action. Depending on other systems in place and the reason for the Audit - it could be a regular health check with the support of an in-house HR/Personnel specialist or sometimes a review - often on the departure of the long-term incumbent in the position - before recruiting a replacement. Sometimes, it stems from a feeling of dissatisfaction with “HR/Personnel” and what it does/should deliver.

Why should you have an HR Audit?

Procedures and documentation may sound boring but most employers who lose Employment Tribunal cases do so because of poor procedures and documentation or - if they have procedures in place, particularly Disciplinary and Grievance, and do not follow them correctly.

Contracts of Employment

The 1996 Employment Act consolidated much previous employment law but also introduced some new requirements - are you sure your contracts of employment are up to date? Do they incorporate provisions from the previous Wages Act which restrict employers from deducting amounts from an employee’s pay without their written or contractual consent - however justified it may seem?

Staff Handbooks

Staff Handbooks sit alongside contracts of employment and enable you to create a good image as a modern employer (Sexual Harassment and Equal Opportunities policies are two examples of areas which need to be covered nowadays). Your Health and Safety policy and your obligation to provide VDU Screen Users with Eyesight Tests should also be spelt out. Other useful policies are rules concerning the use of the Internet at work for private use and banning pornographic material etc.; policies on bribery, accepting business gifts and rules for dealing with the media - different businesses will have different policies which are important to them and which need to be explained clearly and concisely to both new and existing employees. King Associates has produced Staff Handbooks for both large and small clients from a small Design Consultancy to a Global Bank.

Business Confidentiality Agreements

Another area of major importance to some businesses is the validity of their Business Protection and Confidentiality Agreements (sometimes known as Restrictive Covenants). Case law is always evolving in this area and if they are drawn up too broadly or are deemed as too restrictive, they could prove worthless. It is always worth having your contracts of employment and associated documentation checked periodically to ensure that they are working for you and not against you.


Are your policies and documentation ‘discrimination free’? Increasingly, litigation is being brought against employers under the discrimination banner - even at the recruitment stage by non-employees. Sex, race, age and disability are just four areas of nine ‘protected characteristics’ to be aware of in establishing your recruitment policies. If you have one, the Application Form is a good starting point - does yours pass the discrimination test?

What would an HR Audit Cover?

We would need to spend some time in your office with access to your Personnel documentation and records but most of the work would be done off site (we are registered under the Data Protection Act for handling confidential employee data). A full report would then be produced with recommendations followed by a meeting to discuss any action to be taken.

A typical HR Audit Report would cover the following:

1. Introduction/Background

2. Methodology

3. Staffing Levels and Locations

4. Existing Contracts of Employment

5. Review of and commentary on existing HR Policies

6. Review of Existing HR related Documentation including Staff Handbook

7. Checking Procedures

8. Personnel Files, Employee Databases and Records

9. Security and Confidentiality

10. Financial Controls

11. Other Issues Arising from Audit or Requests from the Company to Review

12. Summary of Findings and Recommendations

Appendices (Copies of forms, master documents and so on)

Other Specific Audits Undertaken Have Included:

What do you want from HR/Personnel?

For one Client, facing this particular problem, we designed a questionnaire and then interviewed Directors and Senior Managers to find out “What they wanted from a Personnel Function?” The results highlighted the Company’s needs which were not being met and served as a basis for recruiting a replacement for the existing jobholder whose skills and knowledge had been overtaken by a rapidly growing company. We provided outplacement support and career coaching to smooth the transition for the individual concerned and successfully recruited a more highly qualified and experienced Personnel Manager to take the company forward.

Peace of Mind for Pension Scheme Trustees (AVC Audit)

For another Client we audited their Pension Scheme administration on behalf of the Trustees, to ensure that following an earlier merger, all employee AVC (Additional Voluntary Contributions) funds were correctly accounted for and invested and were correctly recorded in the records of the appropriate AVC providers. This was a painstaking reconciliation exercise and involved gaining co-operation from and liaising with - individual staff members; the Client’s in-house Pension Scheme Administrator; their external Administrators (past and present); their Scheme Actuary and the various AVC Providers. The Client was left with complete records and an audit trail together with peace of mind for the Trustees who knew that they had discharged one of their responsibilities arising from the Transfer of Undertakings requirements.

Areas where Documentation has been Provided/Streamlined include:

  • Sickness and Statutory Sick Pay Records
  • A Medical Questionnaire to replace costly pre-employment medicals
  • Training Records and Individual Training Logs (essential for many Compliance Audits in financial services)
  • Fixed Term Contracts; Temporary/Casual Worker Agreements; Directors' Service Agreements
  • Declarations for Home Office or Police checks on individuals working with children or vulnerable adults
  • Induction Manuals and Compliance checklists
  • Redundancy calculation formulae and selection criteria/consultation/guidelines
  • Pension Scheme information and Benefit Statements for staff
  • Equal Opportunity Application Forms
  • Access to Medical Records/Report Forms
  • Loan repayment documents for repaying fees arising from Educational Assistance Policies for early leavers
  • Season Ticket Deduction Forms
  • Nomination Forms in conjunction with Pension Scheme benefits
  • Holiday and Absence Record sheets and forms
  • Accident Report Form

    If you need a form
    King Associates can design it for you.

The following is an excerpt from a Chief Executive's personal 'thank you' letter:

"When I originally was so keen to include an “audit” element within your consultancy, I was anticipating there may be skeletons in the cupboard - I don’t think even I was quite prepared for the amount that has been uncovered”.

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