Horizontal Audits - A New Approach

A horizontal audit is different than an employer-specific audit because it examines an issue across many employers in a sector, and it can focus on a persistent representation gap in relation to one particular designated group. For example, we might look at how well Indigenous people are  represented within the banking and financial sector, or how well people with disabilities are represented in the transportation industry. This approach will allow us to have a better understanding of what areas in Canada’s workforce are in most need of diversification, and identify systemic issues in specific industries.

Like employer-specific audits, a horizontal audit also assesses a particular employer’s compliance with the Act. However, in addition to that, horizontal audits also have the following goals:

• Gathering best practices that increase representation and help employers to retain employees from the designated groups;
• Sharing these best practices and other special measures that have proven successful with all employers;
• Publishing reports on key findings, including common systemic barriers and solutions.

A horizontal audit has two stages. In stage one, a survey is sent to all employers in a sector. Using the information collected, the Commission then selects a smaller group of employers with whom a full compliance audit will be undertaken. The employers selected for stage two must provide information and documentary evidence related to lines of enquiry of the audit. Interviews are then conducted with employees to validate the Commission’s initial findings.

The Commission then prepares a confidential Audit Report for the employers who proceeded to stage two. The Report provides a summary of findings related to the audits as well as a Management Action Plan (MAP). A MAP is a list of items that require remedial actions. 

At the completion of a horizontal audit, the Commission publishes a report that includes a summary of common barriers to equal employment, and best practices and proven special measures to increase representation. In this way, the Commission hopes to encourage systemic change for the benefit of all the four designated groups.

Employer specific audits

In addition to systemic issues addressed through horizontal audits, the Commission focuses its employer-specific audits on employers that:

• Have never been audited; and
• Have persistent gaps in representation.

Employer-specific audits look at whether of not employers meet the requirements of the Act. Employers that are audited will receive a notification letter indicating that they are being audited. Employers will then receive an audit questionnaire and will be required to send their responses, as well as their most recent workforce analysis to the Commission. The Commission will then analyze the evidence. If employers do not meet all the requirement of the Act, the Commission will issue an undertaking that specifies the remedial actions that employers must put in place within a specific timeframe/deadline. Employers will then be required to provide proof of completion of the undertaking to the Commissions for its evaluation. During the validation, the Commission will interview employees at all levels of the organization. An on-site visit may occur during the validation process. Once validation is complete, employers will receive an audit report with a letter confirming the closing of the audit.    

Horizontal audit on Indigenous employment in the banking and financial sector

This first sector-wide employment equity report uses findings based on the Commission’s new horizontal audit model. While there has been some progress in increasing the representation of designated group members across the sector, there has been little to no progress in the representation of Indigenous people. This audit looked at compliance with the Employment Equity Act, identified employment barriers faced by Indigenous people within the banking and financial sector, and gathered best practices to share with employers in the sector to assist them in the recruitment and retention of Indigenous people in their workforces.

Read the report