Case Study: Human Resources Audit for a Manufacturing Company

Introduction

A mid-sized manufacturing company based in Jakarta, employing 300 staff across production, logistics, and administration, faced significant HR challenges. With rapid growth and increasing regulatory scrutiny, the company struggled to maintain compliance and operational efficiency. Outdated HR policies and inconsistent practices created risks of labor law violations and reduced employee engagement.

Project Objectives

HRConsulta was engaged to perform a comprehensive HR audit with the following objectives:

• Identify gaps in HR policies and practices.
• Ensure compliance with Indonesian labor laws.
• Streamline HR processes to improve efficiency and alignment with business goals.
• Provide actionable recommendations for immediate and long-term improvements.

Approach

The project was executed over four months using the following phased approach:

1. Planning and Stakeholder Engagement
   • Conducted initial meetings with the HR team and senior management to understand pain points and project expectations.
   • Developed an audit framework aligned with regulatory requirements and industry best practices.
2. Data Collection and Analysis
   • Reviewed employee records, contracts, payroll data, and policy documents.
   • Conducted confidential surveys and interviews with 50 employees across departments to assess HR effectiveness.
   • Benchmarked current practices against industry standards.
3. Findings and Diagnostics
   • Identified critical gaps in compliance, such as incomplete employee records and discrepancies in overtime calculations.
   • Highlighted inefficiencies, including manual processes and duplication of efforts in payroll management.
4. Solution Design and Recommendations
   • Drafted updated HR policies covering recruitment, termination, and employee benefits.
   • Suggested automation of routine HR tasks, such as attendance tracking and leave management, to reduce errors and save time.

Solutions Delivered

HRConsulta delivered a detailed audit report outlining:

• Compliance Improvements: Rectified gaps in employee records and aligned policies with Indonesian labor regulations.
• Policy Upgrades: Provided templates for standardized employment contracts and an employee handbook.
• Process Optimizations: Recommended workflow adjustments for payroll and attendance tracking, including a phased plan for adopting automation tools.

Results and Outcomes

1. Compliance Achieved: The company’s HR policies and records were 100% aligned with labor law requirements within three months.
2. Operational Efficiency: Streamlined payroll processes reduced processing time by 30%, freeing HR staff for strategic tasks.
3. Enhanced Employee Trust: Clear and updated policies improved employee understanding of their rights and benefits, leading to higher engagement scores in post-audit surveys.

Lessons Learned

1. Proactive HR audits can prevent costly legal disputes and enhance organizational efficiency.
2. Involving employees in the audit process fosters transparency and trust, which improves implementation of recommendations.
3. Tailored, phased implementation plans ensure smooth transitions and sustained improvements.

Client Testimonial

“HRConsulta’s audit not only helped us achieve compliance but also streamlined our processes. Their practical recommendations and professional support were instrumental in turning our HR department into a value-adding function.” — Head of HR, Manufacturing Company