What is an HR Health-Check?
What is an HR Health-Check and how can this benefit my organisation?
What is an HR Health-Check?
An HR Health-Check is a diagnostic exercise that is used to get a detailed understanding of how an HR department is functioning and how effective it is in achieving its overall purpose and departmental objectives. Ideally, an HR Health-Check should investigate all aspects of the HR function which includes but may not be limited to:
• HR strategy
• HR organisation structure
• Roles and responsibilities of the HR function
• HR capability assessment (individual & team)
• HR policies and policy implementation
• HR processes and procedures
• HR service delivery
• Employee records and data integrity
• Compensation and benefits
• Recruitment and selection
• Training and development
• Career development
• Performance management
• HR systems
• HR metrics
• HR work environment
A well-executed Health-Check will not only provide a detailed view on the ‘current state’ but will also identify specific gaps that need to be addressed to drive optimal performance of the HR function. An HR Health-Check should ideally result in prioritized recommendations that address the specific gaps identified through the audit process.
What are the benefits of an HR Health-Check?
Unlike an ‘internal audit’ that focuses primarily on auditing HR processes, an HR Health-Check takes a broader and more strategic perspective investigating all aspects of the HR function and benchmarking the ‘current state’ against the following aspects:
• Legal and regulatory compliance
• Alignment to company policies and procedures
• Alignment to business strategy / strategic objectives
• Alignment to HR best practices
• Industry standards
The key benefits of an HR Health-Check include:
• Getting an accurate, unbiased perspective of the ‘current state’ giving a factual evidence based perspective of the HR function highlighting what works well and the areas of improvement
• Assessment of the potential risks for a business in terms of legal and regulatory compliance
• Provides a formal feedback mechanism to embed continuous improvement activities
• Benchmarking against best practices
• Driving process efficiency and identification of non-value added activities
Who should carry out an HR Health-Check?
An HR Health-Check should be carried out by someone that is independent from the HR department and is experienced in all aspects of HR. Maintaining objectivity is critical and and will go a long way in ensuring credibility of the process
What triggers the need for an HR Health-Check?
An HR Health-Check can be carried out at any time and may be initiated by either internal or external factors. Whilst there is no statutory obligation to conduct this type of audit, external factors such as changes in labour regulations may trigger the need for an audit.
Triggers may include:
• Merger or acquisition takes place – the Heath-Check forms part of the due diligence process and provides critical information that helps in the integration and streamlining of the HR function when two companies come together in this way.
• Certifications or accreditations – e.g. ISO, JCI etc., can drive the need to review HR practices and align these to specific standards.
• Growth – organisations that are experiencing or planning for growth, often conduct an HR Health-Check when they realise that the HR function may not be fully equipped to support the growth strategy.
• Cost reductions – equally in times of business uncertainty and economic instability, many organisations conduct Health-Checks in search for opportunities to reduce costs and drive efficiency.
• Assessment of the HR function – reviewing the adequacy of the HR strategies, policies, processes, procedures and systems will help organisations to remain abreast of what is working well and where improvements are needed.
Whatever the reason, an HR Health-Check provides a strong basis for driving change and making improvements in this key support function. Establishing and measuring performance against key HR metrics e.g. attrition rates, engagement levels etc., can help organisations to instill a mindset of continuous improvement which can reduce the need for in depth Health-Checks or audit as this serves as a regular temperature gauge.
What is involved in conducting an HR Health-Check?
The first step of conducting an HR Health-Check is the review and data collection phase. This can involve qualitative and quantitative data which often requires a lot of interaction with people within the HR team. This can prove to be challenging at times, therefore it is important to communicate and engage people in the process in an open and transparent manner. The Health-Check can in some instances be dependent on people providing accurate information so it is important to explain why the process is being carried out, how the results will be used and how this benefits not only the HR department but the wider organisation. Remember a disengaged respondent, who is suspicious of the motives of the Health-Check is unlikely to support the process in an open manner, therefore transparency and tact is key to addressing this potential issue.
Once the data has been reviewed this should result in a gap analysis exercise and supporting recommendations which are prioritized based on the impact to the business.
What happens after the Health-Check?
The value of conducting an HR Health-Check is really derived from implementing the recommendations resulting from the process. This can take time and of course will depend on various things such as strategic priorities, budgets, available skills and resources etc., therefore the planning and prioritization is a decision that should be made with the business and not in isolation.
How can we help you?
PeopleFirst has extensive experience in successfully conducting HR Health-Checks for large, small and medium sized organisations and across a diverse range of industry sectors. We adopt a consultative style and work with our clients to conduct detailed audits and take a hands on approach support the implementation of recommendations.
If you have questions, please do not hesitate to contact us:
T: +971 4 4475210