Maximizing Organizational Efficiency Through Regular HR Assessments

Today’s business leaders are faced with various challenges relating to recruiting, retaining, and rewarding their employees. So, regardless of industry, employee headcount, location, or organizational structure, all businesses need an effective, scalable human resources function. This function must have knowledgeable human resources professionals to support risk mitigation and a highly engaged workforce.

How do HR professionals tackle these challenges of today’s workforce and still attend to the other HR needs (like benefits, payroll, and employee relations)? They conduct regular HR assessments.

HR assessments support the business by identifying opportunity areas, then developing action plans. Ultimately, the action plans are tied to the organization’s mission, vision, and overall business goals.

What Is an HR Assessment?

An HR assessment is a form of strategic HR consulting that provides insight into the strengths and opportunity areas within a business.

It is best practice to have an outside party conduct the HR assessment to avoid any biased opinions of the organization, and to have an expert who has experience with all HR functions. The process involves qualitative and quantitative research through stakeholder interviews, surveys, and review of existing HR policies, systems, and practices.

It is important to remember that HR assessments are not solely focused on reducing costs, but also on identifying areas of improvement through more effective and efficient operations.

Why Are HR Assessments Useful?

Possible opportunity areas an organization can learn from conducting an HR assessment include streamlining operations, developing defined organizational structure, updating total rewards for employees, and creating an inclusive workplace.

A standard HR assessment focuses on pinpointing inefficiencies or missed opportunities in the normal day-to-day of a business. HR assessments are especially beneficial during times of growth, transformation, or change. As a business scales up or down, a more specialized assessment can offer targeted insights to support strategic decision-making.

How Does an HR Assessment Support My Business?

When done correctly, an HR assessment can deliver deeper visibility across every function of business operations. The outcome can either validate current strengths or uncover blind spots that are hindering efficiency. Even when assessment findings are a surprise, they’re always valuable to discover (as opposed to staying hidden).

Key topics often exposed during assessments include:

• Compensation misalignments
• Undefined people strategy
• Undefined business goals
• Readiness for change
• Outdated HR compliance
• Absent diversity, equity, and inclusion
• Lack of training and development
• Recruitment inefficiency
• Unclear performance management

These insights allow business leaders to make faster and more informed decisions across the organization. The goal is to have a proactive business, not a reactive one. Creating action plans to improve the above areas can support the business by attracting, retaining, and motivating employees.

The Process of an HR Assessment

The process begins by reviewing current policies and structure, which then flows to conducting interviews with the leadership team. After the interviews, an employee survey is delivered and analyzed in comparison to the leadership interviews. This will determine whether there is any misalignment between employees and leadership.

For example, leadership can state how they have a great career pathing program and low employee turnover. However, the turnover report shows employees are leaving around their two-year anniversary. The survey shows employees do not feel a sense of understanding about their role or how to grow with the company.

Short-term and long-term action plans are developed from the findings of the assessment. Leadership will partner with the HR consultant on identifying more pressing findings that need to be addressed and begin there.

Additional Assessments to Further Bolster Business Effectiveness

HR assessments can deliver deeper visibility into every function of the organization. Other assessment models to further reveal cross-functional opportunity and complement the HR assessment include:

Business Foundation

• What it does: Reviews the current structure, mission, values, and goals of the business. This supports the HR consultant’s understanding of how the business functions prior to diving deeper into the other assessment models.
• How it helps: Identifies the effectiveness of the organizational structure and alignment of the mission with the overall business practices and goals.

HR Foundation

• What it does: Evaluates the sophistication and strategic alignment of HR functions across key areas, like talent management, leadership development, and workforce planning.
• How it helps: Identifies whether HR is operating at a reactive, tactical, or strategic level and provides a roadmap to evolve in a more efficient and impactful way.

HR Compliance

• What it does: Audits HR policies, procedures, and practices to ensure compliance with current employment laws and industry standards, while identifying potential areas of legal and regulatory risks.
• How it helps: Reduces exposure to costly litigation, improves documentation and process controls, and strengthens HR governance.

Compensation & Benefits

• What it does: Evaluates employee pay, medical benefits, and other incentives with alignment to a business compensation philosophy and employee needs.   
• How it helps: Reduces exposure to high-cost plans and possible pay discrepancies and improves employee retention.

Employee Engagement

• What it does: Leverages employee surveys, interviews, and people analytics to evaluate workplace culture, communication, satisfaction, and engagement.
• How it helps: Identifies pain points across the employee lifecycle and provides data-driven insights to improve retention, morale, and productivity.

When Is the Right Time to Conduct an HR Assessment?

If your organization has never conducted an HR assessment, now is the perfect time to conduct one. HR assessments are also beneficial during times of growth, transformation, or change. As a business scales up or down, a more specialized assessment can offer targeted insights to support strategic decision-making.

Additionally, when a new incumbent is placed in the role, conducting an assessment is helpful in providing the new HR business partner (HRBP) with guidance on desired areas of focus.

Regardless of current circumstances, the best practice is to conduct an audit every two years.

Using an outside resource is helpful in obtaining a different perspective, and, many times, uncovers areas for improvement that may have been overlooked by the incumbent HRBP.

Final Takeaways: You Have HR Assessment Options

An effective HR assessment doesn’t end with identifying opportunity areas, but transfers into an action plan for continual improvement.  It can also highlight where the business thrives, and how to maintain momentum.

Today’s workforce is at an accelerated pace of change. Changing hybrid work expectations, economic shifts, and AI-driven workplace transformations demand that companies reevaluate how efficiently their people, processes, and systems are working.

When it comes time to reevaluate your HR department’s effectiveness, consider multiple options and choose the one that best aligns with your organizational priorities, pace, and goals.