|Eight Common Internal Audit Hiring and Retention Mistakes
Internal auditors are in high demand these days. Recruiters and competitors are looking to snatch high-quality talent with the right set of skills and background. Management understands the value talented internal auditors can provide to help them make good and timely decisions, mitigate risks, and meet strategic objectives.
That means it’s more important than ever to have a robust recruiting and retention program for internal audit to keep star performers from leaving for other jobs. It’s also important to hire the right candidates and communicate with them well so that the organization and the internal auditors they hire are both on the same page. Jonathan Ngah, a principal and internal audit director at Synergy Integration Advisors, a consulting firm that provides audit and governance, risk, and compliance (GRC) solutions, says that a poor recruiting process can leads to problems later on.
Eight Common Internal Audit Hiring and Retention Mistakes
1) Internal audit recruiting, selection, and retention strategy is not clearly defined. It is important to communicate with the team what the strategy is and why you make the hiring decisions you make. “You need to communicate your skill needs to the team. And if you go outside for a new hire, they need to know why,”. “You can prevent turnover if members of the team understand why they were passed over.” Companies should also look for internal auditors in non-traditional places. “Diversity is everything,” says Ngah. “Having a bunch of people with the same background and skill sets who think the same is the worst thing you could do.”
2) Existing strategy is not clearly understood or consistently applied. Without a formal and clearly understood resource strategy consistently applied throughout your organization, luck or exceptional judgment of hiring managers is needed to assure qualified internal auditors are hired. Some questions to consider include: What is your organization’s ideal candidate? Where can you find them and how do you get them to apply? How do you structure and execute interviews to select candidates with desired skills who can quickly adapt to your work environment and culture?
Look for drive and creativity in candidates as well as a willingness to learn. “Are they hungry and resourceful enough to figure out how to solve problems?” asks Ngah. “When I come across an auditor who thinks they know everything, I say ‘good luck’ and move on. That person isn’t growing or challenging themselves.”
3) Procedures not in place to quantify or monitor progress. Quantifying internal audit resources requires that you identify and measure skills, preparedness, potential, and fit, and then assess their impact on specific projects and ability to create value for your organization. Don’t do this and you will have no idea if your internal audit hiring and retention strategies are working.
4) HR recruiting, selection, and retention policies are misunderstood and not properly applied. Inadequate or poorly applied human resources policies, especially those impacting internal auditors, can negatively affect productivity. An outdated, disorganized, and poorly structured recruitment process increases the likelihood of hiring unqualified auditors. It also impacts productivity if the team collectively lacks skills to execute and deliver, and can lead to high employee turnover, imposing significant costs.
5) Headhunters and recruiting firms are not used effectively. Consider the trade-off between using internal resources during the recruitment process and using an external recruiting firm. While outsourcing can be a great resource, it should not substitute or be considered a replacement for an internal audit resource strategy. “You need to understand why you are using them and are you getting the bang for the buck,” says Ngah. Put some metrics in place to evaluate the performance of an outside firm, such as evaluating retention rates for internal auditors placed through recruiters, and ensure adequate control and oversight of the outsourced process.
6) The organization is not taking advantage of internal audit outsourcing and co-sourcing arrangements. Sometimes the best hiring decision is not to hire at all. A common mistake is to expend resources bringing someone on full time to fulfill a need that is temporary or occasional. The needed skills may be already available within the organization, but in a different department (co-sourcing), or available from a third party at a fraction of the cost (outsourcing). Failing to be creative about leveraging resources to solve problems can be a costly mistake.
7) Frequent turnover of qualified internal auditors due to lack of challenging assignments. We all know that internal audit includes some unexciting work that just has to get done. But working on SOX compliance all day every day can push good internal auditors to start thinking about looking around and seeking new challenges. Be sure to vary the work and reward good performance with some challenging and high-profile work. Money is not usually the reason people leave their jobs, more often it’s because they don’t find the job fulfilling.
8) Lack of emphasis on developing and nurturing creativity and innovation within the internal audit function. Chief audit executives have been saying for years that they need auditors with creativity, critical thinking, inventiveness, and similar skills. But to attract such folks, the job needs to align with those skills. If you are doing internal audit the way you have always done it, you are doing it wrong. Innovators will leave stagnant internal audit roles, making them almost hopeless to advance.