END of year is a great time to check in on the more holistic, personal parts of HR like employee happiness, compensation, retention and benefits among other HR related issues.
As we head into the final stretch of 2023, there are a number of important tasks related to payroll, benefits, compliance and general HR to take care of by the end of the year so as to make the beginning of next year, 2024, a little less hectic!
Why are end of year HR compliance audits necessary?
Whether you are starting or managing an old company, as long as you have employees, the benefits and need for an occasional thorough human resource compliance audit remain the same. Please let it be known that not only do proper HR policies help you to avoid compliance penalties, it also ensures fair labour standards, by keeping your employees protected as well as motivated, boosting the overall performance of your business.
The best time for an HR audit depends on your business and how you operate. When considering the resources needed for an audit, the best solution is to schedule full-scale audits annually and conduct smaller audits throughout the year. That is what the majority of companies opt to do towards end of each year so as to map the way forward for the following year.
Audit HR and all personnel files
Human resource audits can help to identify whether HR department’s specific practice areas or processes are adequate, legal and effective. Another way to end your year as an HR is to delve into employee files and audit them together with other HR activities of your organisation. On this, you will be checking if everything included in the file is HR-compliant and relevant. You may also need to check key information for the employees to ensure that you close the year with adequate information for all your employees. As any HR professional knows, keeping up on HR filing is no easy task. This is a good time to catch up on any back filing and pull any terminated employee files from your active files.
Employee feedback
- Signs that your HR department is a failure
- Why businesses need year-end HR compliance audits
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The end of the year can be an opportunity to identify areas of improvement and this information we get from the employee during such feedbacks. Employee feedback is the process of sharing information with employees about their performance, skills or behaviour at work. But it is not just about meting out criticism. The goal of employee feedback is to direct staff towards practices and resources that help them do their job better. Employee engagement surveys can give organisations meaningful feedback from employees about what is working and what is not. By soliciting employee feedback, organisations can gather insights to improving employee engagement and morale, boost productivity, strengthen retention, refine internal processes and meet organisational goals.
Employee compensation and benefits
The final months of the year are a great time for HR professionals to ensure they are prepared for everything that needs to be done to successfully wrap up the year. One of the key things to do is to review compensation so as to start the following year in a competitive manner.
Organisations often review employee compensation and benefits at year end. In fact, it is the responsibility of HR to compare employee salaries to the market average and consider making cost-of-living adjustments to stay competitive. HR can also do the same for its benefits offerings by conducting employee benefits surveys. HR professionals should consider completing year-end compensation and benefit activities, which helps in coming up with the new year compensations that are competitive on the market.
Updating your performance records
Another strategy is to conduct HR compliance audits at the end of the fiscal year, to better track year-over-year performance and get a better picture of how your HR initiatives benefit your company. This is why the majority of companies opt for performance evaluations at the end of each month. Updates of such records are vital when evaluating employees for a promotion or raise, so it is important to regularly update these records using the required level of detail. Conducting HR compliance audits gives you a competitive advantage. After all, a detailed look into all your current practices and processes helps your business to determine if it is legal as well as effective.
Workforce analysis
Workforce planning is a common year-end HR task. Workforce analysis provides information regarding the current workforce across the organisations’ critical occupations, including demographic and background characteristics of the current workforce, retirement eligibility, turnover and various workforce management issues (ie recruitment and retention). Such planning allows organisations to forecast staffing needs for the upcoming year. This also provides HR with an opportunity to review and analyse the organisation’s workforce strengths. By engaging with leaders and managers, HR can help to identify outstanding talent and ways to develop their capabilities.
This allows an organisation to maximise the full potential of its workforce.
Value alignment
Values alignment means making sure that everyone has the same values and understands how their goals help the organisation to succeed. HR is generally responsible for developing and reinforcing an organisation’s values and can have a positive impact on an organisation by aiding employees in understanding the significance of their contributions and how they align with the organisation’s overall values. The year end is an excellent opportunity to re-inforce an organisation’s core values and define employee engagement initiatives for the following year. In fact, it is within the jurisdiction of HR to re-inforce organisational values by highlighting them at a year-end meeting, or tying them into a holiday party for example.
An end of year HR compliance audit is an important tool for all businesses to ensure the company’s practices align with employment laws. As it allows you to accurately evaluate your business’ leave structure, disability structure, health and safety, HR policies, payroll, etc.
Put simply, it helps HR in finding out how to keep up with current rules and regulations for compliance and will help your company to build an HR operations roadmap for the future or the following year. It is, therefore, vital to conduct these end of year HR compliance audits and checklists for organisations.
Emmanuel Zvada is a human capital consultant and international recruitment expert
