The biggest challenge federal contractor employers face might be “finishing” their annual AAPs. If you only have to prepare one or two affirmative action plans each year, you might choose to prepare all the technical reports and analyses yourself. Beyond that, however, many organizations are going to seek the services of a professional AAP consulting firm, like Berkshire.
But what you do with the data we prepare for you -- all those numbers on all those reports -- that still lies with you.
If you are the one responsible for putting the “action” into your affirmative action plan, this exercise can quickly overwhelm. For example, let’s assume that an average AAP will have, say, 12 AAP job groups, and let’s assume about half of those require placement goals each year. If you prepare 10 AAPs each year, that’s about 60 action plans you need to develop. Now balloon that to 50 AAPs, or 100, and an organization can easily end up with more action plans to develop and implement than there are days in the year.
So whether your problem is sheer volume, or just the daunting task of figuring out what to do for a single action plan, some real guidance from an expert may be helpful. At Berkshire, we like to be helpful, so below are five keys to help you take your AAPs—all of them—across the finish line and to be more prepared for when the OFCCP comes knocking.
Triage the Right Way
When faced with too many placement goals, the most prevalent advice (unfortunately) is often to identify the goals with the largest shortfalls, the largest number of people in the protected group in question it would take for you to meet that “goal.”
Ask the OFCCP, and they will tell you that there is a reason the regulations require contractors to express placement goals as the availability percentage and not a headcount (the shortfall). They know that the latter term has the potential to mislead organizations to implement things like quotas, which is not the objective of an effective AAP. In fact, the OFCCP spend three entire paragraphs in the regulations stating as clearly as they can that “placement goals” are not quotas, ceilings or floors, and that they do not replace merit principles.
*Quick aside: I will continue to use quotations when referring to AAP “goals,” as a gentle reminder that this term has a more complex meaning than when we typically encounter it in modern vernacular.
The size of the shortfall might signal where the OFCCP would be most interested in an audit, but by no means limits the OFCCP’s inquiry. And a violation for not developing an action plan is the same whether the “goal” was big or small.
And setting a placement “goal” is not the same as identifying a problem area, as the OFCCP’s regulations also make very clear. There are three distinct steps: 1) set a placement goal; 2) identify any problem areas; and 3) develop an action-oriented program (action plan) to address any problem areas identified. You can, and often might, be required to set a placement “goal” but not identify any specific problem from that exercise.
Setting a placement “goal” is only identifying a potential issue. It is your job to figure out if the difference in demographics driving that placement “goal” represents a problem.
One big ol’ clue lies in the Impact Ratio Analyses (IRA) you are also required to run. There, you are performing statistical analyses of the differences in selection rates among the various protected groups in things like hiring, promotion, and termination. If your demographics look “off” for a particular group and the hiring IRA indicates potential discrimination against that group in the selection process, that’s not a flag, that is a flag surrounded by flashing lights and a siren.
Ideally you never have to choose which placement goals to focus on because you will focus on them all, but if you do ever have to make the difficult choice to effectively ignore some of your indicators due to lack of resources, focus your efforts where the indicator is flashing red and making noise.
The very first step when you receive finished AAP reports should be to identify where you have overlapping placement goals and IRA results. Given the almost complete lack of utility in the promotion and even termination IRAs, here we are primarily talking about hiring IRAs.
So, for example, you might be required to set a placement “goal” for female engineers, and for minority (non-White) accountants. The female placement “goal” might have a shortfall of say 10, while the minority “goal” has a shortfall of maybe 2. Conventional wisdom would say to focus on the female goal. But if your accountant hiring IRA is indicating potential impact adverse to minorities, that is a much bigger deal. You are sitting on regulatory reports that seem to indicate the reason minority accountants are underutilized might be due to discrimination in the hiring process.
Where there is this overlap, those IRA results must be investigated. For hiring, this usually means scrubbing the data to ensure it is as accurate and complete as possible – and running more refined analyses than the OFCCP’s standard, often using analysis groupings other than AAP job group.
Those investigations are complicated and can be very time-consuming, though, so they might not be the goals you actually address first. It is likely that you can address many of your other placement goals faster than you can investigate those IRA results, so it might make good sense to tag your overlapping goals with a preliminary action plan that simply says you intend to investigate the IRAs and update the action plan accordingly. Then, turn to other goals you can dispense with quickly rather than ignore them entirely.
Leverage the OFCCP’s Recordkeeping Requirements
Unless your organization has fewer than 150 total employees, you are generally subject to a two-year recordkeeping requirement, and we recommend federal contractors observe the two-year limit regardless—not for the OFCCP, but for you.
That should mean when preparing a new AAP, you still have the AAP from the prior year and the year before that. With that information, you can dispose of a few different types of placement goals.
The first is what we can call an intermittent recurring goal. That’s where you were required to set a “goal” for a particular AAP job group two years ago, but not last year, and now have to set a “goal” again this year. The “goal” two years ago presumably resulted in an action plan. The fact that it was not necessary to set a “goal” the following year indicates the action plan might have been pretty effective. So why would you reinvent the wheel this year? Simply re-implement the action plan from two years ago and get on with your day.
The second can be characterized as a new goal. It was not necessary to set a placement “goal” for a particular AAP job group last year, or the year before, meaning the demographics over the past two years were not significantly different from expectations. But this year, that has changed.
What do we really know about new goals? Just that the demographics last year and the year before looked fine, but this year they do not. Are we seeing a negative trend that we need to be concerned about, or are we simply witnessing the natural ebb and flow of workplace demographics? We don’t know. We need more data, specifically the “goal” analysis from next year. For new goals, it might be reasonable to simply tag them with a monitoring action plan and reexamine the situation next year if the “goal” persists.
Using this approach, in fairly short order, you can assign reasonable action plans to a significant number of your non-overlapping placement goals (remember, you’ve already tagged the overlapping ones with a preliminary action plan to investigate the IRA results).
Are We Already Meeting the “Goal?”
You might be surprised at how often organizations are required to set a placement goal, which is based on the demographics of the existing workforce, where they are already meeting or exceeding the “goal” based on their current placement rates. Of course, you won’t know that unless you look!
Although it is not a report required by the OFCCP’s regulations as part of the annual AAP process, a goal attainment report is absolutely something every contractor should prepare on an annual basis. It is not a creature of the regulations, but rather a report the OFCCP will require you to produce in the event of an audit, so it is actually the audit letter itself that defines it.
The placements for your placement goal are defined by the OFCCP’s Itemized Listing as hires and promotions into the AAP job group in question. So in year one you are required to set a placement “goal” and implement an action plan. In year two, the first thing you should do to evaluate the effectiveness of that action plan (assuming the “goal” persists) is look at the placement rate of the affected group over the past year.
You can do that at the beginning of the process, too, though. Set the goal, then look at your actual placements over the prior year. If current efforts are already resulting in expected placement rates, your action plan could be a very simple one: Don’t change a thing!
This is different than simply monitoring in that you would actually report out to Talent Acquisition that you do not want them to change current practices, and if any changes to the selection process are being contemplated, coordinate that with your Compliance function.
Are We Making Progress?
Another scenario is that you have to set a placement “goal” and current placement rates are still below what we expect/hope, so we have to build an action plan, right? Well, not so fast. If current efforts are showing progress toward the “goal” already, it might make more sense to simply continue as you would if you were already meeting the “goal” (as described above), with a little more monitoring.
If you’re already meeting the goal, it makes sense to put it out of your mind more. But if we are only identifying progress toward the goal, it is probably worth the time to consider whether or not current efforts can be enhanced at all to help things along.
But it is key to understand there is no clock running here and the OFCCP does not actually expect you to successfully address each and every “goal” in a 12-month period. In fact, when the agency sees a contractor meeting or exceeding too many goals in a single year, they tend to get a little suspicious about how that success could be possible without something like an illegal quota at play.
So if current efforts indicate the organization is already on the path to success, it makes sense not to get in the way of that by changing everything up with a new action plan. Simply give current efforts more time to do their work and don’t waste time and resources there.
Progress can be defined in a number of ways, by the way. If the current efforts (action plan or otherwise) involve external outreach and recruiting, look for progress in the applicant flow. Placement rates might not be where we think they should be yet, but is the placement percentage higher than the incumbency percentage? That looks like progress.
Circling Back
If you follow the above process, in that order, you will end up with some pile of overlapping goals awaiting IRA investigation to move forward. If the IRA investigation indicates real potential discrimination, it’s probably time to pass that along to your legal team for review and further instruction. If not, you can drop the “goal” back into the process like any other.
But before investigating those scary IRA results, which will likely take significant time, the rest of your goals don’t have to sit gathering dust. By identifying new goals, intermittent recurring goals, and goals that are already being met or for which you can identify progress, you can dispense with those goals in a relatively short period of time. Then focus on the IRA investigations and any remaining goals that will require more effort to develop an action plan.
And that can get your organization closer to an air-tight AAP status in the case the OFCCP comes knocking.
Are there other things you can do to address even more of your placement goals with less of a headache? You bet there are. If you are in a unionized environment, you likely have much less influence over the recruiting and selection process and may need to simply note that this could be a union issue and kick things over to your labor attorneys. Your promotion and termination IRA results may not be that meaningful, but the employee movement you will see looking at those reports might tell you something. For instance, if women appear to be underutilized, and the promotion data indicates that’s because they keep getting promoted up and out of the job group in question, that doesn’t sound like a problem, it sounds like identifying the opposite. But if women are leaving the company at unusual rates (no matter how those terminations are coded in the system), you might want to take a closer look at those termination decisions.
There is a LOT you can do if you have unlimited resources, but most of us do not. Meeting the OFCCP’s base requirements can be a Herculean task, so don’t beat yourself up. If you need help, that is what Berkshire is here for, so don’t hesitate to reach out to us at BAI@berkshireassociates.com or fill out the form below.