Eight HR mistakes auditors keep finding

July 5, 2017

Eight HR mistakes auditors keep finding

Human resources is a complex and multi-faceted function. With so many details to keep track of, it’s almost inevitable that you’ll make a mistake or two. Everybody does.

But some HR mistakes are more common than others. In fact, some mistakes are picked up so often by HR consultants and auditors, that they arrive on the scene pre-equipped to handle them!

To help you make sure you’re running a tight ship, I’ve been speaking to a selection of HR experts, auditors and consultants, to find out which HR mistakes are the most common, and how you can fix them.

A typical HR audit looks at eight different areas

First, let’s clarify exactly what an HR consultant or auditor might be interested in looking at:

  1. Documentation
  2. Recruitment
  3. On boarding & induction
  4. Training & development
  5. Performance management
  6. Compensation & benefits
  7. Employee relations
  8. Process efficiency

These eight areas make up the backbone of any strong HR function, which is why they are normally the hot points for HR auditors and consultants. So it’s no surprise that the most common HR mistakes tend to fall into these categories.

1. Key documents and contracts are often missing or wrong

One of the most expensive mistakes – in both time and money – is when key documents or contracts are missing from the company’s HR system, according to Nickie Elenor, Managing Director of Your HR Lawyer.

“When we audit their HR system, they are missing key documents like contracts of employment, proof of the right to work in the UK, disciplinary warnings, notes of absence reviews, agreements to pay back training fees and appraisals notes” she says. “And if they do have the documents, they are rarely as good as they could be.”

Elenor suggests that this stems from HR being seen as more of a ‘lip service’ function for some organisations. And this is a dangerous game to play. She says that if employers do not create and store accurate data, then they’ll be on the back foot if a situation arises that requires evidence.

2. Too much bias in the recruitment process

I doubt you consider yourself racist, or sexist, or anything like that. But according to ex-recruiter Taylor Dumouchel, you probably do discriminate – whether you realise it or not.

“People are unconsciously drawn towards a certain gender, age, or ethnicity” says Dumouchel, who now works for Peak Sales Recruiting, “but the truth is that none of these factors translate into an exceptional employee.”

Dumouchel says that sub-conscious bias during recruitment is extremely common, but that there’s a simple fix. You need to take out all identifying information from applications.

“Implementing blind CVs helps us to conduct an objective assessment. Comparing blind career profiles allows our clients to conduct a more apple-to-apples comparison, and eliminates bias.”

3. Contracts not issued fast enough during induction

For both Kevin Smith and Linda Marsh – senior HR consultants at Guardian Support – the biggest issue they face with clients, is a failure to promptly issue new starters with employment contracts.

“Often we find that the employer has not carried out a proper induction” says Smith, explaining how necessary details are not obtained, no contract of employment is issued, and new employees are not informed of company rules. “Consequences of this are that where there is a later dispute, the employer cannot show the terms on which the employee was employed.”

Marsh advises that companies issue contracts within 8 weeks of commencing employment.

“The Contract of Employment sets out the terms of the employment relationship” she explains. “If this is not clear, then the employer can face difficulties in managing the employment relationship, and potentially leave themselves liable for an award of 2-4 weeks’ pay on top of any successful Employment Tribunal claim.”


ACAS explains that while a verbal contract is still legally binding, you are required by law to provide a ‘written statement of particulars’ once an employee has been with you for two months. Source.

4. Training not being taken seriously

For Chere Taylor, President of Fulcrum HR Consulting, the biggest bugbear by far is training. Or rather, the lack thereof.

“The lack of training is by far the most negligent and short-sighted way that companies fail not only their employees, but themselves as well” explains Taylor. “Everything from initial new hire on-boarding to harassment and manager training are generally viewed as a nice-to-have… but not really necessary.”

Taylor is quick to remind us that nothing could be further from the truth. Employee turnover is much higher in companies that don’t provide training. And Taylor adds that companies get sued all the time because they didn’t provide a basic level of attention to making sure their people know what they are doing!

5. Long-standing performance issues get ignored

For trusted CIPD partner Bradfield HR, the biggest mistake they often find themselves working the hardest to fix, is a failure to deal with long-standing performance issues.

“Many employers have let performance problems fester, sometimes for years” reveals Caroline Griffiths, Managing Director. “The impact on company performance is great, and this permeates further through the organisation as high performing staff see underperforming colleagues ‘getting away with it’.”

The solution, Griffiths advises, is to tackle performance issues as soon as they arise, making sure to apply sound investigative skills, and best-practice processes.

Martine Robins – an expert with 25+ years’ practical HR experience

So what about the other areas an HR consultant might investigate? To help you with the rest of the HR auditor checklist, I asked for a bit of advice from experienced HR expert Martine Robins. Robins runs the HR Dept Woking branch, and is a Chartered Fellow with the CIPD. Her experience covers all angles of HR, including:

  • Employment law
  • People management
  • Disciplinary and grievance
  • Training and development
  • Policy writing

Robins’s HR wisdom is often shared by media platforms such as The Telegraph. So I decided to ask if she could help me understand the biggest mistakes companies are making in terms of compensation, employee relations, and process efficiencies.

6. Employers are failing to pay at least the minimum wage

One of the biggest compensation stumbling blocks, according to Robins, is basic compliance. In particular, compliance in making sure you’re paying the minimum/living wage.

“This mistake is often due to a lack of knowledge or awareness” explains Robins, adding she speaks to many employers who think “it does not apply or can be avoided.”

At the time of publishing this article, the National Living Wage (also called the National Minimum Wage) was set at £7.50 per hour, for employees aged 25 or over. You can keep up with current rates on the government’s website here. Also, try not to confuse this with the ‘Real Living Wage’ – also called the ‘Voluntary Living Wage’ – which is not a legal requirement, but aims to set a more realistic rate of pay based on what people really need to live.

7. Managers need to follow processes and document conversations

When it comes to employee relations, Robins highlights that too many managers fail to follow appropriate processes. They also fail to document important conversations, such as disciplinary hearings.

“Typically, there are clearly stated legislative frameworks for such areas that companies are legally obliged to adopt” she explains. “Unfortunately, there are occasions when these processes are not properly followed, and this is when companies put themselves at risk of legal action.”

Robins remarks that the simple act of documenting these kinds of conversations often stops the issue going further. And when it does go further, it is the absence of this documentation that often leads to claims being awarded in the employee’s favour.

8. HR departments tend to stick to what they know

When it comes to running an efficient HR department, Robins says that the biggest hurdle is the tendency to ‘stick with what we know’. Roberts gives a number of reasons why companies often keep whatever feels comfortable:

  • Big companies find change tortuous, because of the need to convince stakeholders
  • Smaller companies may find it’s a question of affordability
  • For some companies, it’s simply an emotive decision – they don’t like to feel they’re leaving something behind

“Continuous improvement has to be a constant process in any department, in all businesses, regardless of size” she advises. “The investment made in good change initiatives – such as HR automation technology, or new payment methods – is often recouped very quickly, because it stabilises and de-risks your processes.”

Eight things you can do right now to improve your company’s HR function

Based on the excellent insight from today’s contributors, I’ve put together a quick to-do list, containing eight things you can do right now to get your company’s HR function into top shape. I’m not claiming this will solve every problem you’ve ever encountered – but I’m pretty sure it’s a good start.

  • Check that every single existing employee has a contract of employment.
  • Ask your recruiters to consider a blind CV test the next time they hire somebody.
  • Design a quick automatic process that issues an employment contract each time you add a new starter to your HR system – this tutorial by WebMerge is a great place to start.
  • Revisit a handful of employee records, and check for training gaps – if you find any, start a more thorough review.
  • Check your performance review process, and make sure it contains regular follow-ups – not just an annual interview.
  • Make sure every single employee is receiving at least the National Living Wage.
  • Find out when your last HR-employee interaction was. Can you find the documentation that accompanies it? If not, re-consider your protocol.
  • Start researching HR software solutions – our handy free guide will teach you how
 

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