Case Study: Human Resources Audit for a Retail Chain

Introduction

A growing retail chain operating in Surabaya with 500 employees across 20 outlets faced challenges in maintaining consistent HR practices. Each outlet managed its HR processes independently, leading to discrepancies in employee contracts, payroll errors, and compliance risks. The company engaged HRConsulta to conduct a comprehensive HR audit to address these issues and implement a standardized approach.

Project Objectives

The HR audit aimed to:

• Uncover inconsistencies in HR processes across outlets.
• Ensure compliance with Indonesian labor laws and regulations.
• Develop a unified HR policy framework for all outlets.
• Provide recommendations to optimize HR operations and minimize risks.

Approach

The six-month project was divided into the following phases:

1. Stakeholder Engagement and Needs Assessment
   • Conducted meetings with regional managers and outlet HR representatives to understand existing practices and challenges.
   • Defined the audit scope, focusing on key areas such as contracts, payroll, and compliance.
2. Data Collection and Site Audits
   • Collected employee data, including contracts, attendance records, and payroll summaries, from all 20 outlets.
   • Performed on-site audits at 10 selected outlets to observe HR practices and interview store managers.
3. Analysis and Benchmarking
   • Identified common discrepancies, such as outdated contracts and unrecorded overtime.
   • Benchmarked policies and procedures against industry standards and legal requirements.
4. Recommendations and Implementation Planning
   • Created a standardized HR policy manual for consistent application across outlets.
   • Proposed the centralization of payroll processing to reduce errors and ensure uniformity.
   • Designed a training program for store managers and HR staff to implement the new framework.

Solutions Delivered

HRConsulta’s audit resulted in:

• Standardized HR Policies: Developed and distributed a comprehensive policy manual covering recruitment, termination, benefits, and disciplinary actions.
• Centralized Payroll System: Recommended and facilitated the transition to a centralized payroll system, ensuring accurate and timely payments.
• Training Initiatives: Delivered training sessions for 50 managers and HR staff on the new policies and compliance requirements.

Results and Outcomes

1. Improved Compliance: Ensured 100% compliance with labor laws by updating contracts and formalizing employee records.
2. Reduced Errors: Centralized payroll system decreased payroll errors by 40%, enhancing employee satisfaction.
3. Consistency Across Outlets: Standardized policies fostered a unified HR approach, reducing variations in practice among outlets.

Lessons Learned

1. Standardizing HR practices across multiple locations enhances efficiency and minimizes compliance risks.
2. Centralized systems are key to achieving accuracy and consistency in payroll and HR management.
3. Regular training ensures that managers and staff can effectively implement new processes.

Client Testimonial

“HRConsulta’s thorough audit and tailored solutions have transformed how we manage HR across all outlets. The centralization of payroll and standardized policies have been game-changers for our operations.” — HR Manager, Retail Chain