Training insights: People auditing – assurance over employee engagement

People make a business. Everybody says so, so it must be true. However, people can also be a source of business risk, and concerns about this are increasing. The Chartered IIA’s annual Risk in Focus reports have shown employee and talent risks steadily rising up the priority rankings, reaching second place in the 2023 report.

Some of this anxiety arises from a scarcity of working people in many jurisdictions caused partly by high numbers leaving the workplace in the pandemic. However, workforce planning, staff recruitment and retention, succession and skills planning, employee engagement and wellbeing and people’s perception of their employer are far bigger and more wide-ranging issues, with a multitude of complex and intertwined concerns.

What is clear is that if every person in every organisation felt as valued as the oft-quoted cliché suggests, internal audit leaders would be less concerned about these risks. And the risks are substantial – affecting everything from reputation and the cost of hiring and training people, to lost productivity and, in extreme cases, fraud. If your organisation is losing people to rivals who offer them a sideways move with relatively small financial gain, you may have an employee engagement problem.

Cracks and disconnects

Somewhere along the management lines, there are myriad cracks and disconnects and internal auditors are well placed to spot these and highlight the risks they pose. Some will prove to be symptoms with widespread common root causes, while others will be localised and specific to particular managers, departments or teams. People are complex and each issue may be different, however there are likely to be opportunities to improve engagement and wellbeing, which may in turn improve productivity and efficiency.

This is why any overall audit of HR may well uncover several areas that merit further “deep dive” reviews. The Chartered IIA is therefore launching a new one-day course examining how to go about auditing assurance over employee engagement.

“This is a highly topical and important issue and it should concern us all,” says John Chesshire, who leads the new course. “Few organisations think beyond obvious incentives for staff, such as pay and flexible working. They don’t approach it consistently or in a coordinated way. They have no overall or integrated employee-engagement strategy and they are missing a huge opportunity – internal audit is in a strong position to point this out.”

It's often said that “employees don’t leave organisations, they leave managers,” he adds. “Things have changed. Now I think those who are not engaged are leaving organisations as a whole too.” Organisations need to think more broadly about the people they are now hiring and what motivates them, decide what they can offer and then follow it through consistently. Then they need to assess whether their strategies are working and if they have achieved their objectives – could aspects work better or be done differently with greater impact and effect?

Focus on opportunities

One easy principle is that if internal audit is continually focusing on mitigating people risks and highlighting staff problems, then it should reassess its approach. “Done well, staff engagement should be all about the opportunities and these are unlikely to be realised if the organisation’s staff strategies and policies are piecemeal and unconnected, or are not followed through,” Chesshire advises.

This is all about management, he adds. The three lines must work together to ensure that people policies are aligned, managed consistently, and measured. HR plays an important role, but internal audit also has a clear part to play, since auditors will see the signs and consequences of strong and poor employee engagement across the organisation and should be able to spot common issues and analyse root causes.

“Internal audit has a voice and a presence throughout the whole organisation, which it can use to support HR messages with senior management, while also sharing information with staff in all departments and reporting back on what it sees happening in practice at all levels,” Chesshire says.

There is no one-size-fits-all “solution” to staff engagement, but internal audit should be asking whether HR and management understand current levels of engagement in different parts of the business and whether they have realistic targets and strategies for reaching these. “You can never please everyone, but do they know what good looks like? What level of staff engagement are they aiming for, and where are they now? What target are we aiming for?” he says.

Deep dive

Chesshire suggests that while the Chartered IIA’s well-established “Auditing HR and People Risk” course is a good overview of all the elements relating to people in an organisation, the new course will enable participants to think more deeply about core issues. They will be able to consider real examples (and discuss problems they have encountered in their current or past roles) and should end the day with a high-level internal audit work programme for employee engagement that they could implement in their organisation.

“’Auditing HR and People Risk' covers so many areas that done well it’s more of a thematic programme of internal audit work than a single audit,” Chesshire points out. “Today’s workplaces are more diverse and complex and the way we audit people management touches on so many other areas, such as culture, so there are different ways to look at it – either individual deep dives on specific areas, or a series of audits over a longer period, or as parts of many other audits.”

In addition to a chance to discuss current situations and challenges, participants on the new course will leave with a range of resources that will support further research. “And, as with other courses, I always invite people to come back to me afterwards if they think of further questions or want advice when they are engaged on a real audit,” Chesshire adds. “This is about exploring possibilities and suggesting ways to tackle employee engagement work, but it’s also a source of confidential support.”

The new Chartered IIA course is a recognition of new risks, complexities and opportunities around people engagement. It’s a thought-provoking next step for those considering a challenging topic, but the rewards of getting it right should easily justify the extra attention. It’s time to move on from the clichés and to look more closely at why people engagement really is internal audit’s business. 

The new course “People auditing: assurance over employee engagement” will run on 30 October 2023 and 26 January 2024. “Auditing HR and People Risk” will run on 24 April 2023, 28 July 2023 and on 16 January 2024.

This article was published in May 2023.