Reports

Page6

Evaluation of the
Employment Equity Audit Program
Management Summary - Final Report
September, 2002

ANNEX A

Listing of Conclusions and Recommendations

This annex presents a summary of the conclusions and recommendations related to the fourteen evaluation issues.

Conclusions

• HRDC has a clear mandate to provide promotion and education under the EE Act. However, there are different interpretations as to what constitutes promotion and education activities
• There are differences in opinion amongst the CHRC, HRDC, TBS and PSC in relation to the role that the CHRC plays and should play in relation to promotion and education
• Employers currently rely to a large extent on the CHRC for information regarding the audit requirements
• The CHRC distribution of its Framework for Compliance, its Employment Systems Review Guide and Chapter 8 of its Process Manual may be considered a role which the EE Act provides to HRDC as the disseminator of information and guidelines
• The CHRC makes demands on employers that are not explicitly specified under the EE Act or Regulations
• The majority (fifty-six percent) of employers were of the opinion that the CHRC did not make demands on their organization that were outside of its mandate. However, thirty percent of employers believed that the CHRC did make such demands .
• Many TBS and HRDC officials are of the opinion that the advice provided by WEOs and Portfolio Officers (related to the audit requirements and interpretations) may not be consistent with what is accepted by the CHRC auditors
• The EE Act gives HRDC the role of issuing guidelines and providing advice to employers concerning the implementation of employment equity
• The CHRC makes interpretations of the legislation that it translates into demands on employers which may be viewed as providing guidelines or advice on implementation
• Expectations for initial compliance rates were too high
• Employers predominantly will only comply when audited
• The main reasons that employers cited for not being in compliance were the following: a) they didn’t have the resources to do so (40%); b) they believed that they were in compliance (33%); or c) they did not thoroughly understand the implications of the EE Act and Regulations (22%)
• Stakeholders and staff of the CHRC had a wide variety of views on why initial compliance was lower than expected
• There is not a problem with employers awareness of the EE Act and Regulations or their awareness of the CHRC’s Framework for Compliance Audits, however 32% of employers surveyed reported difficulty in understanding exactly what is required of them to comply
• While the majority of employers (between 57% and 75%) stated that they received sufficient information to properly conduct the workforce analysis, the employment systems review and hiring and promotion goals, there are still some problems with the sufficiency of information provided to employers to complete the workforce analysis (20% stated information was insufficient) and more significant problems with the sufficiency of guidance to conduct employment systems review (28% stated insufficient information) and to set hiring and promotion goals (29% stated insufficient information)
• Employers have access to the CHRC’s Framework for Compliance, Employment Systems Review - Guide to the Audit Process and HRDC’s Guidelines
• Employers currently do not have access to the CHRC Process and Reference Manual which provides the greatest level of detail on what the CHRC expects from employers to achieve compliance
• There is a general consensus that WEOs and to some extent Portfolio Officers are not resourced adequately to support employers sufficiently
• There is a significant problem of contradictory information being provided to Employers by WEOs, Portfolio Officers and the CHRC auditors (48% of public sector employers reported receiving contradictory information and 37% of private sector employers)
• WEOs and Portfolio Officers are of the opinion that they aren’t kept adequately aware of audit requirements
• There are differences of opinion as to whether guides produced by the CHRC, TBS and HRDC are complementary or overlapping. However, most stakeholders believe that better coordination of the guides is required.
• Many employers find the demands to comply with the EE Act and Regulations to be unreasonable; employers estimated average resource demands were 271 person-days and $50,000 in contract fees
• Employers reported that, on average, 72% of the resources they reported that they required to respond to the audit were simply required to comply with the EE legislation
• More employers find the audit demands to be unreasonable than find them to be reasonable; calculated average resource demands were 73 person-days and $14,000 in fees
• Stakeholders, generally, find the audit requirements to be reasonable
• There is a consensus that audit demands are onerous for small employers
• The main areas which employers and stakeholders see as being unreasonable are the amount of detail demanded, the CHRC’s interpretations and inflexibility and the time lines demanded by the CHRC
• Most employers with reported knowledge of different auditors believed that auditors were inconsistent
• Inconsistencies were reported primarily in flexibility that individual auditors provided, level of detail required, and communication approaches
• A review of five files which had a change of auditor showed no indication of different auditors making different demands
• CHRC suggests that different audit approaches are applied depending on environment, level of compliance and cooperation
• Without audits, few employers would be in compliance up to the development of EE plans
• If plans are implemented, employers will be undertaking significant activity to achieve employment equity
• The audit reports are most useful to employers in assisting them in becoming compliant
• There is little evidence of compliance with the implementation of EE plans other than anecdotal information (please also see issue #8 re the impact on representation levels) (It will not be possible to accurately assess the implementation of plans until 2002 or 2003 when significant numbers of employers should have implemented their plans.)
• The monitoring of the implementation of plans has not yet started and there have been no audits to verify the implementation of plans
• There have been modest increases in representation levels since the audits commenced although attribution to the audits is difficult
• The majority of employers surveyed believed their actions, as a result of the audit will lead to higher representation levels
• The CHRC has not yet begun to monitor the implementation of EE plans by employers
• Employers believed that the audits could be more effective in increasing representation if the CHRC took a more collaborative approach in the audits and provided examples of best practices
• The CHRC is subject to certain disclosure requirements under the EE Act which may restrict its ability to share best practice information
• The legislation makes certain numerical demands on employers that the CHRC must enforce
• Many Employers believe there is a preoccupation with numbers
• CHRC and its partners are of the view that numbers are the basis of process but not the focus
• The CHRC has not yet begun to monitor the implementation of EE plans by employers (It will not be possible for the CHRC to accurately assess the implementation of plans until 2002 or 2003 when significant numbers of employers will have implemented their plans)
• 28% of employers believe that the CHRC did not recognize employment policies, practices or initiatives that their organization had put in place that will lead to higher representation levels (61% reported that the CHRC had not failed to identify such policies, practices and initiatives)
• The current persuasion/enforcement balance is appropriate for employer compliance up to the development of EE plans
• Most employers believe enforcement actions used by the CHRC are appropriate
• Many employers feel the audit process is a coercive process rather than one of persuasion
• The annual report is required by the EE Act but is also useful to employers
• Employers value the report mostly for information on others in their industry and for best practices
• Partners are of the opinion that the report could be more positive, more analytical and provide more examples of best practices
• The report is becoming more analytical in highlighting problem areas and best practices
• A large majority of employers achieve compliance only after being audited
• Most stakeholders are supportive of the focus on large employers
• There are mostly only small employers left for the first round of audits
• If 100% auditing continues, the audit cycle may be around 12 years in total
• There is some support for focussing audits on employers with the greatest potential to impact representation levels (large employers who are in expanding industries)
• All CHRC managers and auditors believe that 100% auditing should continue
• The proposed audit cycle and audit service standards are not being met
• Almost half of employers believe the audit process can be streamlined
• Employers believe the audit process would be much streamlined if more detail was provided to them on what exactly what is required of them
• The most frequently mentioned recommendation to streamline audits is to provide more tools, templates and examples to employers
• Stakeholders and CHRC staff also believed that audit reports could be significantly shortened to provide only the information necessary to employers and that the process should be simplified for small employers
• The proposed audit cycle will not be met and the CHRC estimates it will be 8 years
• There is a consensus that CHRC audit resources are constrained but there are mixed views on whether additional resources are required or whether streamlining will reduce the pressures
• The CHRC will face additional workload as monitoring of the implementation of EE plans commences and as audits of the implementation of plans begin
• The most frequently mentioned recommendation to streamline audits is to provide more tools, templates and examples to employers
• Stakeholders and CHRC staff also believed that audit reports could be significantly shortened to provide only the information necessary to employers and that the process should be simplified for small employers
• Many of the recommendations in this report, if implemented, will have resource implications

Recommendations

• In the short term, the CHRC, HRDC, TBS and PSC need to resolve the roles that each plays in promotion and education of EE and in providing advice
• In the long term, a revision to the EE Act could clearly define the roles with respect to promotion and education
• The audit demands employers are subjected to should be resolved (the CHRC has made recommendations to the parliamentary committee conducting the EE legislative review) If those recommendations are rejected by the parliamentary committee then the CHRC should discontinue making those demands
• Should those demands be accepted by the parliamentary committee, the audit requirements should then be broadly publicised and specified in the Regulations
• If the CHRC produces guidelines or advice (i.e, in described in section 42(1)(d) of the EE Act) relating to the implementation of EE, then it should do so in consultation with HRDC which has a clear mandate to do so
• The CHRC, HRDC and TBS should continue to ensure that audit requirements and interpretations are shared in a systematic fashion to ensure consistent advice is provided to employers
• The CHRC should monitor the issue of the resource implications of audits on employers to determine its validity. Should the results prove that this issue is valid, the CHRC should explore ways (i.e, legislative review) to resolve the issue
• Ensure that detailed audit expectations are clearly communicated to employers. HRDC’s plans to put Chapter 8 of the CHRC Process and Reference Manual on their website should greatly address this recommendation
• The CHRC should investigate further why some employers feel they are not receiving adequate information on how they can comply. Who will provide further information, if required, will be resolved through implementing the third recommendation. HRDC’s plans to make chapter 8 of the CHRC Process and Reference Manual available through their website should help in this regard
• CHRC should consult with HRDC and TBS in order to ensure that they are receiving adequate information on the audit requirements so that they can properly train WEOs and Portfolio Officers
• There should be better coordination amongst the CHRC, TBS and HRDC in interpreting requirements and developing guides in order to ensure consistency and reduce ambiguities
• The CHRC should review its requirements and try to reduce the burden on employers as much as possible (make clear expectations/interpretations, allow flexibility where feasible, ensure consistency within CHRC and with its partners) while at the same time ensuring that the requirements of the EE Act are complied with
• In setting timelines, the CHRC auditors should ensure continue to ensure that they consider the employers specific context and their ability to respond
• The CHRC should follow through on its investigation on how the audits for small employers can be streamlined
• When the CHRC changes formal or informal standards, employers should be advised
• The CHRC should ensure that different audit approaches based on context do not affect the consistency in demands on employers
• The CHRC should ensure that they explain to employers, perhaps in the Framework for Compliance in more detail, why audit approaches may differ and in what circumstances
• The CHRC should continue auditing of employers up to the development of EE plans
• The CHRC should follow through on their plans to start the monitoring of the implementation of plans
• The CHRC should follow through on their plans to start the monitoring of the implementation of plans
• The CHRC should investigate whether more collaborative approaches can be applied while ensuring its compliance role is maintained
• The CHRC should share information on potential best practices, subject to the disclosure restrictions it is bound to under the EE Act, with HRDC and TBS so that they can share these best practices with employers
• The CHRC should ensure that its numerical demands are not more detailed or restrictive than what is required under the legislation
• HRDC and TBS should promote why numerical analyses are required and promote the idea that the assessment of outcomes is the primary focus.
• The CHRC should investigate whether more collaborative approaches can be applied while ensuring its compliance role is maintained
• The CHRC should continue to make the report more analytical
• highlight common problems in achieving compliance
• identify prevalent employment barriers and successful solutions
• identify government-wide and industry-wide issues
• continue to provide examples of best practices
• The CHRC should consider whether 100% auditing is optimal in light of the expected audit cycle and whether all remaining small employers should be audited in the first round (recognizing that employers who are not audited are unlikely to achieve compliance in the absence of an audit)
• In the next round of auditing, the CHRC should consider whether a focus on employers or sectors with the biggest potential for impact on EE should be the focus
• The CHRC should work in cooperation with HRDC and TBS to ensure employers have the tools, templates they need and examples of how employers can comply with the requirements
• The CHRC should follow through on its internal review of documents and templates and its investigation of ways of streamlining the audit process for small employers
• The CHRC should examine the feasibility of the other recommendations for streamlining made by stakeholders and CHRC staff that are identified in this report.
• The CHRC should follow through on its internal review of documents and templates and its investigation of ways of streamlining the audit process for small employers before considering additional resources. The CHRC should also review the suggestions for streamlining made by employers and stakeholders that have been documented in this report
• The CHRC should continue to share its templates and tools and examples of how employers can comply with the requirements with HRDC and TBS to ensure employers have the information they require to comply with the requirements
• The CHRC should investigate the feasibility of shortening audit reports
• The CHRC should start to estimate the resource demands of implementation audits and resource implications once information starts to become available
• The capacity of the CHRC’s website should be expanded to support all of the audit tools that would assist employers in becoming compliant
• The CHRC should develop an action plan based on recommendations that it intends to implement from this report that includes projected cost implications

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