The threats and risks from human capital management issues are increasing. They are no longer measured in only fines, penalties, and awards for non-compliance. Human capital management affects keys 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 a critical element of organization's 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, the failure of the financial industry to adequately assess risks, 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 conducting 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 the organization’s commitment to addressing key issues.
• The important role of HR auditing
• Identifying and assessing the strategic, operational and transactional impact of HR audits
• The role HR audits play in measuring and communicating critical information about your organization
• The basics of using HR audits in assessing human capital related risks
• How your organization can use HR audits to improve strategic and operational decision making
Ronald Adler is the President-CEO of Laurdan Associates, Inc., a veteran-owned, human resource management consulting firm specializing in HR audits, employment practices liability risk management, HR metrics and benchmarking strategic HR-business issues and unemployment insurance issues. Mr. Adler has more than 39 years of HR consulting experience working with U.S. and international firms, small businesses and non-profits, printers, insurance companies and brokers, and employer organizations.
Mr. Adler is an internationally recognized thought leader on HR auditing and is the developer the Employment-Labor Law Audit™ (ELLA®), the nation’s leading HR auditing and employment practices liability risk assessment tool. He is an adjunct professor at Villanova University’s Graduate Program in Human Resources Development and teaches courses on HR auditing and HR management. He is also a certified instructor for the CPCU Society and conducts courses on employment practices liabilities.
Ronald has served on two national task forces developing professional standards in human capital measurement and performance management. He is a member of the Institute of Internal Auditors and also a member of the Society for Human Resource Management (SHRM) and serves as a subject matter expert (SME) to SHRM on HR metrics and workplace issues.
He is a member of the Maryland Chamber of Commerce and chairs the Chamber’s unemployment insurance subcommittee. Mr. Adler has also been a member of the U.S. Chamber and its Labor Relations Committee.