HR Auditing: Uncovering ‘Hidden Costs’ and Building the Right Manpower Structure

Devil in detail

Traditionally, the HR function in an architectural and engineering design and project management company was overseen by its finance department. The company wanted to conduct a manpower study, documenting specific demographic and salary details pertaining to all of their employees. This HR audit revealed a shocking finding – almost 70 people, that is, more than 10% of the workforce, were getting regular monthly salaries even though they had quit the company years ago! When the company finally cleared its books on employee accounts, they could make a sweeping savings of INR 20 lakhs within a single year. The company streamlined its manpower structure, removing layers that were either redundant or non-functional. With more realistic management structures and resourcing levels, its business units recorded as high as a 12% improvement in employee productivity and retention within just a few months.