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The HR Business Function Effectiveness Audit Standard

Getting Talent Right
March 16, 2017
March 17, 2017

This Audit Standard deals with the ability of management to attain a productive and healthy workplace culture as well as anticipate and avoid risks within the workplace and apply effective practice in the management of employees. The existence and application of practices considered to be effective in ensuring a productive and well-managed organisation where the HR function supports the overall business strategy. This standard also has to do with the proactive planning for current and future staffing needs of the organisation, as it entails key positions to be identified and succession plans to be created. The adoption of this Audit Standard from a strategic perspective will assist business leaders to plan and support their current and future business strategy. From an operational perspective it offers consistent framework, principles and process for workforce planning.


The HR Business Function Effectiveness

There is an increasing pressure on the HR function to be a true business partner and deliver value.

HR departments will have to rethink their roles and responsibilities

Studies Reveal Disconnect Between Employees and HR on Key Issues. Recent research by the ADP Research Institute measured perceptions of employees, HR leaders and other senior leadership on key metrics and found a wide disparity in opinions of various HR functions including benefits administration, talent management, and responsiveness to HR-related inquiries.

  • Employees Are Less Satisfied with Benefits than HR Thinks they Are
  • HR and Employees are not Aligned on Talent Management Issues
  • Employees Indicate Getting Answers to HR Questions Isn’t as Easy as HR Leaders Think

HR Governance, Depth and Future Orientation


The management capacity of the organisation

  • The management capacity of the organisation as it relates to the HR function, along with its ability to prevent and manage employee issues with legal ramifications is satisfactory.
  • The Human Resources Department demonstrates a clear understanding of organisational and customer needs and adds value and supports our organisation’s strategy, and undertakes an annual planning and review process.
  • The HR function is structured, organised and equipped to provide overall strategy, direction and effective management of the organisation's human resources function to accomplish organisational objectives.
  • HR strategy is responsive and agile to make a difference to the organisation’s sustainability.
  • HR moves beyond being a transactional processing function towards being proactive to the changing market trends, and in mobilising the organisation.
  • HR is designing performance management, talent development and reward processes to help recruit best talent and retain key performers.
  • HR is designing balanced HR management policies
  • Our HR function has the opportunity to act as a business partner to the organisation –, in addressing the organisation's strategic, tactical and policy issues. Integrates all HR activities with the organisation's strategic business plan, by developing broader business acumen, strengthening analytical skills, and optimising talent; hence, contributing on a more strategic level.
  • The HR department is sufficiently staffed for the industry and the size of our organisation and the department personnel is professionally and technically competent to meet organisational challenges.
  • There is know-how in the human resources function. Functional disciplines (staffing, compensation, benefits, payroll, employee relations, management and organisation development, health and safety, and human resources systems)
  • Our talent management strategy is directed in attracting, developing, and retaining talent as identified in the Workforce Plan to ensure a sustainable pool of talent and drive growth.
  • We are creating talent strategies and we are communicating and integrating them with shared purpose experiences.
  • We are leveraging employee networks that share innovative ideas by embedding shared purpose awareness into talent management practices, and by implementing collaboration tools/systems, such as blogs, goal management software, and recognition management systems.
  • Information about employees and their jobs is comprehensively captured, analysed, shared and used to support performance-oriented conversations (Personnel Data. Recruitment/selection data. Work experience data. Compensation data. Performance appraisal / career promotion data. Benefit Plan data. Health/safety/accident data. Frequency of long term absence, certified illness and uncertified short-term absence) and this information is translated into usable forms for identifying trends, educating and supporting managers on effective management techniques.
  • The Human Resources department is results-oriented (i.e., measuring cost-effectiveness and the bottom line results of human resources initiatives).
Risk Management in HR Our HR Risk Management is evaluating the potential risk impacts with regard to strategic and operational HR activities.
  • A periodic review of relevant legislation should be conducted to ensure compliance.
  • Labour Standards & Relations Legislation
  • Occupational Health and Safety
  • Human Rights
  • Privacy Legislation
HR Risks
  • Health, Safety incidents
  • Stress & Mental health
  • Brand risks
  • Skills shortages
  • Incompetence & poor employment relationships
  • Harassment, Conflicts, Disputes, Diversity problems
  • Fraud, Corruption
  • Employee disengagement, Low staff satisfaction, Staff turnover & impact on customer satisfaction
  • Cyber security
  • HR is managing brand risk, challenging business leaders to think again about ad hoc actions that may run the risk of damaging the reputation of the organisation.



How the organisation has a focus on the future to anticipate future human resource requirements and is responsive to change

Future priorities

  Leaders communicate future priorities and the organisation’s purpose, vision and objectives.

  We adhere to shared values that guide behaviour.

  The Human Resources department takes a lead in striving for a more empowered and participative work force (productivity improvement, cost reduction, quality improvement and improved quality of work life initiatives)


The organisation has a focus on the future and is responsive to change 

  Where change happens it is communicated in a timely and transparent way across the organisation. Managers share an understanding of the Change Cycle and how it will impact business and employees. Are aware of what Employment Laws apply and are trained to handle change and manage their employees through the change cycle.

  Our organisation has the capacity to attract, retain and motivate employees to accomplish organisational objectives, and can readily address cost containment issues that affect profitability.


Workforce Planning

"Where is our organisation going and how will it get there?"

Each organisation has a unique planning cycle.

Workforce Planning: the management of adequate human capital resources to meet service and production requirements, and planning for changes in personnel in roles to drive organisational goals

Identifying current and future skills gaps is a key HR management function that by linking business needs and HR strategy drives growth. HR needs should be reviewed in conjunction with other planning activities.

Connecting organisational development and workforce need projections with workforce skills.


  The HR function's ability in connecting organisational development and workforce need projections with workforce skills and to design and deliver services is satisfactory. (Meeting internal customers' requirements / Managing the costs to deliver services / Pooling and accessibility of services).

  A well structured process of identifying and providing ways to fulfill the organisation’s future developmental and human resource needs. Encompasses activities associated with maintaining and processing employee events such as promotions, transfers, employee personal changes, and providing headcount information.   Includes time spent with managers to assess individual needs, one-on-one consultations, counseling, coaching managers on employee relations, performance management, and succession planning.

Anticipating future human resource requirements


  Business plans (e.g.; major changes in sales, production; and/or technology) are used to anticipate future human resource requirements. We have a process to deal with the anticipated gaps between the current skills and future requirements. This process, assessment and projections (workforce requirements - i.e., numbers, job classifications, skills, knowledge, ability and educational levels) are used for career planning (matching organisational and individual skills, abilities and needs)

  The organisation has a process for regularly reviewing staffing needs. At an operational level, we put HR management practices and activities in place to support management and staff in achieving their day-to-day goals and determining how many staff are needed to deliver services over the next year or how performance will be monitored.

  The organisation engages in planning at least annually or has a system to identify organisational goals and/or directions, trends/changes in social and economic conditions, general labour market conditions, legislative, and/or technology developments which impact on recruiting and retaining talent.

  Our workforce planning process entails an assessment of talent needs and identifying gaps in capabilities, followed by an action plan specifying what actions are needed to close these gaps.

  Key positions are identified and succession plans are established to provide ‘backup’ as to ensure continuation of service.

  The succession plan involves nurturing and developing talent from within the organisation. Employees who have the skills, knowledge, experience and the desire are identified and supported as part of succession planning activities

  Information which profiles current staff such as skills, age/projected retirement, allows the organisation to look at employees who can contribute in other positions.

  The organisation has processes in place to address internal transfers in the event that individuals in identified positions leave or move into other positions in the organisation.