27.05.2023
Taslim Ahammad
HR Audit in Bangladesh: Compliance and Performance
Human Resource (HR) is the most valuable asset in any organization. It is crucial to manage and develop the workforce effectively for the growth and success of the company. As a developing country, Bangladesh is no exception to this. In recent times, organizations in Bangladesh are recognizing the need for an HR audit to ensure the effectiveness of their HR function. This article will explore the necessity of an HR audit in Bangladesh and its benefits.
An HR audit is a comprehensive assessment of an organization’s HR policies, practices, procedures, and strategies. It evaluates the compliance of HR activities with legal requirements and best practices in the industry. HR audits identify areas that require improvement, provide insights into current HR practices, and help organizations develop and implement effective HR strategies.
In Bangladesh, the labour force is predominantly young, with a median age of 26 years. As a result, it is essential to have effective HR policies in place to attract and retain the best talent. Furthermore, Bangladesh has various labour laws and regulations that organizations must comply with, such as the Labour Act, 2006, and the Bangladesh Labour Rules, 2015. An HR audit helps organizations ensure compliance with these laws and regulations, minimizing the risk of legal actions and penalties. Another reason why an HR audit is necessary in Bangladesh is to ensure that organizations have a diverse and inclusive workplace. Diversity and inclusion are crucial for any organization’s success, as it leads to increased creativity, innovation, and better decision-making. An HR audit can help identify areas of improvement in the recruitment and retention of diverse talent and provide recommendations for creating a more inclusive workplace culture.
Moreover, an HR audit can help organizations modernise their HR processes and reduce costs. It can identify redundant processes, inefficient workflows, and non-value-added activities. Eliminating these processes and activities can save time and money, allowing organizations to invest in areas that bring more value to the business. Finally, an HR audit can help organizations align their HR strategies with their business objectives. It evaluates HR activities’ effectiveness and identifies areas that require improvement to support the organization’s goals. It also provides insights into the current HR practices, enabling organizations to develop and implement effective
This study outlines the procedure of HR audit in Bangladesh: (i) Identify the need for HR audit: The first step is to identify the need for an HR audit in the organization. An HR audit can help organizations improve their HR function, streamline HR processes, and align HR strategies with business objectives. It can also help ensure compliance with labour laws and regulations and create a diverse and inclusive workplace. Once the need is identified, the organization can move to the next step (ii) Pre-Audit Preparation: The first step in the HR audit process is to prepare for the audit. The HR audit team should review the organization’s HR policies, procedures, and practices. They should identify the areas that need to be audited, such as recruitment and selection, performance management, compensation and benefits, training and development, and compliance with labour laws and regulations. The audit team should also define the scope and objectives of the audit and communicate them to the organization’s management (iii) Data Collection: The second step is to collect data through surveys, interviews, and document reviews. The HR audit team should collect data on HR practices, compliance with labour laws and regulations, and employee feedback. The data collected should be analysed to identify areas of improvement and compliance gaps (iv) Analysis: The third step is to analyse the data collected in the previous step. The HR audit team should identify compliance gaps and areas that require improvement. They should also compare the organization’s HR practices with best practices in the industry and provide recommendations for improvement (v) Reporting: The fourth step is to prepare an HR audit report that includes findings, recommendations, and a plan of action. The report should be comprehensive and provide details on the areas that require improvement and the recommended solutions. The report should be presented to the organization’s management and HR team (vi) Implementation: The fifth step is to implement the recommendations provided in the HR audit report. The organization should allocate resources to implement the recommendations and monitor progress regularly. The HR audit team should provide support and guidance throughout the implementation process (vii) Follow-up Audit: The final step is to conduct a follow-up audit to evaluate the progress made in implementing the recommendations. The follow-up audit will help identify any areas that require further improvement and ensure that the organization’s HR function is continuously improving.
Conclusion
In summary, conducting an HR audit in Bangladesh is crucial for organizations to ensure compliance with local labour laws and regulations, as well as to assess and improve overall HR performance. By undertaking a comprehensive review of HR processes, policies, and practices, companies can identify areas of non-compliance, potential risks, and opportunities for enhancement.
The compliance aspect of an HR audit involves a thorough examination of various legal requirements, including employment contracts, working hours, minimum wage, health and safety regulations, and employee benefits. Identifying any gaps or deficiencies in compliance enables organizations to take corrective actions, mitigate legal risks, and establish a strong foundation for fair and ethical employment practices.
Moreover, the performance aspect of an HR audit allows organizations to evaluate the effectiveness of their HR strategies, procedures, and systems. This involves assessing recruitment and selection processes, training and development initiatives, performance management systems, employee engagement practices, and succession planning. By identifying areas of improvement, organizations can enhance their HR practices, leading to increased productivity, employee satisfaction, and retention.
Furthermore, an HR audit can provide valuable insights into the alignment of HR practices with the organization’s overall business objectives. It enables companies to identify potential barriers or misalignments that may hinder growth and competitiveness. By aligning HR strategies with organizational goals, companies can optimize their human capital and foster a culture of continuous improvement.
Overall, conducting an HR audit in Bangladesh is a proactive approach for organizations to ensure compliance, enhance HR performance, and align HR practices with strategic objectives. By investing time and resources in this process, companies can create a strong HR foundation that contributes to their long-term success and sustainable growth in the dynamic business environment of Bangladesh.
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Taslim Ahammad
Assistant Professor, Department of Management Studies
Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj, Bangladesh