Editor’s Note: This is the first in an occasional new series we are calling “Conversation Starter.” In each segment we will offer a brief take on a particular internal audit issue, along with a plea to you, our readers, to provide your own experiences and views in the comments section below. The hope is that the meat of the article will be in the comments section. Then we may circle back and write a longer article based on the feedback and THANKS FOR TAKING PART IN THIS!
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. “If you miss on the front end of the hiring process, you need a lot of luck to make it up on the back end,” he says.
Ngah offers the following eight internal audit hiring and retention mistakes organizations make. But this is hardly a comprehensive list and this is “Conversation Starter,” so we want to hear from you. Read through the list and then offer your own mistakes (either ones you’ve made or mistakes you have seen) in the comments below. This only works well if you participate.
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,” says Ngah. “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. “If you don’t ever have any process to rate performance, how do you know if you are moving from point A to point B?” asks Ngah.
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 unsexy 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 shops, making them almost hopeless to advance.
OK, now lets hear from you!
Drop a comment in the comment section below answering the question: “What the biggest internal audit hiring, retention, and resource management mistake you have ever made, or seen in your career??” 
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We’ve made the mistake of thinking a set of credentials is effective in getting the right candidate. We’ve struggled to mentally move beyond needing an accounting or business degree to look at more broad-based set of achievements, even if that means the candidate might not have the traditional auditor/accountant type qualifications.
I have two examples, one on hiring the right people and the other on knowing the time to let go of someone.
On hiring the right people, I would certainly add ”transparency” about the role the new hire would have, into the mix. Not having the job description matches the job in practice would cause early leavers. I recently had a conversation with someone who described the reason to resign as ‘what was sold was not in the slightest bit what (s)he got’. This had an effect on retention although caused by the lack of right hiring practices.
On retention-side of things, I would, however, prefer to dive a little bit deeper. One common misconception about retention may be that not knowing the time to let go of someone. Yes, the retention rate is a good metric, but as for all companies and services, the more someone spent years after years, the more difficult is breaking out the comfort zone. To bring brighter, fresher minds into the profession, the teams must let go of members who do not prefer any new challenges.
https://internalaudit360.com/eight-common-internal-audit-hiring-and-retention-mistakes/
Quote from the Author Ngah “Diversity is everything”, which indicates the requirement of audit talent supposed to be an organic portfolio.
First of all, the traditional way of HR management isn’t longer fulfilled the demand of audit talent when an Entity expects variety outstanding performance from the auditor.
2nd, regards to the 8th mistake of the article(Lack of emphasis on developing and nurturing creativity and innovation within the internal audit function.), it’s the consequences when the audit function has been defined and required only for the compliance sake.
No one could fix or prevent any of the 8 mistakes since the title of article mislead the direction if we are trying to make a better audit professional imagine and aim to contribute great performance.
Yet, the content of the article did address how difficult it is to have numbers of right person in hand in order to team up some of them who fits the requirement for different projects.
I would like to urge whoever has the influence and would like to dedicate to a better audit career development environment to give the equal right for Certified Internal Auditor with Certified Public Accountant, which is allowing legitimately Certified Internal Auditor practicing audit service as a business.
Further more encourage Certified Internal Auditor co-working with audit firm for recognized continuously education hours yearly in order to gain different subjects experience and learn from other professionals.
Any type or size of the enterprise would be benefited by a qualified audit firm who could interact with the enterprise on a proper strategy of audit program and gather the necessary resource based on the audit program which included at least different professionals and auditing skills and tools, in the meanwhile the enterprise would be released from the burden of heavy HR cost and the worries of not knowing how to utilize the audit function.