Using Applicant Reports to Help Your Company During an OFCCP Review
Part 1 of 2
It's a different world out there for companies going through OFCCP reviews. The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) is in a much changed mode from its approach of several years ago. OFCCP is now heavily focused on issues concerning veterans and persons with disabilities. Much of the focus concerning veterans and persons with disabilities is centered on the outreach efforts that companies are making to find and hire members of these protected classes and the documentation that companies have to demonstrate this outreach. The agency is also heavily focused on issues concerning how employees are paid. OFCCP routinely asks for extensive data on some or all employees contained within an affirmative action plan to determine whether there are any pay disparities that may suggest compensation discrimination.
With these new focus points for the agency, it is easy to forget that OFCCP has not abandoned its long-standing interest in determining whether there are disparities based on race or gender in the hire of applicants. OFCCP continues to routinely ask for documentation of processes and decisions where a class of applicants appears to have been the subject of discrimination. These requests are made more burdensome by the fact that OFCCP may focus on possible discrimination involving a small number of applicants and by the fact that OFCCP may ask for information on disparities involving not just minorities and females but ANY racial subgroup and either gender. Thus, a situation where there is a disparity involving the failure to hire a few white males may be of interest to the agency just as a situation where there is a disparity involving the failure to hire a few Hispanics or a few Native Americans may be of interest to the agency.
This continuing interest on the part of OFCCP involving disparities in hiring, combined with the agency's interest in issues concerning veterans and persons with disabilities, means that applicant reports produced for OFCCP are one critical key to the success of a review. An effective applicant report should be able to demonstrate the following things:
- That all classes of applicants were properly considered for open positions.
- That there was sufficient outreach associated with open positions to draw minorities, females, veterans, and persons with disabilities into applicant pools.
Determining Whether All Classes of Applicants were Properly Considered
There are multiple parts to determining whether applicants were properly considered. First, the company must know which applicants were considered for particular positions. For example, it is not enough for a company to know that there were many applicants for engineering positions. It is likely that each engineering position had a specific set of qualifications, and each engineering position had a defined applicant pool. In this situation, an applicant report must have a way to show which applicants were considered for each individual engineering position, rather than assuming that all engineering applicants were considered for all engineering openings. As another example, it is not enough for a company to know that many applicants applied for production openings. Different production openings may require different skill sets and applicants should be evaluated against the relevant skills for specific open positions. An applicant report must have a way to show which applicants were considered for each individual production opening. The use of a requisition number assigned to each opening can be helpful to differentiate applicant pools from each other.
Helpful tip no. 1: All openings should be assigned a requisition number, and applicants should be required to apply for specific requisitions.
Once the company knows which applicants were considered for particular positions, the company must be able to determine whether the applicants met the basic (i.e. minimum) qualifications for these positions. An applicant report should be able to display information on candidates who did not meet the minimum qualifications, and candidates who did not meet the minimum qualifications should be excluded from analyses that compare applicants to hires. Recruiters and others who are entering information into an applicant tracking system must properly disposition candidates so that candidates who do not meet the minimum qualifications can be excluded from applicant-hire analyses.
Helpful tip no. 2: The company should determine basic and preferred qualifications for open positions PRIOR to the time that positions are posted and candidates begin to express interest. These basic and preferred qualifications should be clearly listed on job descriptions and employment advertisements.
A company evaluating whether applicants were appropriately considered should also determine whether candidates properly expressed interest in open positions. Companies have the right to define the manner in which candidates must apply and the time lines for applying. For example, a company can decide that all candidates for an open accountant position must apply via an on-line application system and that expressions of interest will only be accepted for a 15-day period. In this situation, any candidate who did not apply via the website and any candidate who applied after the 15-day period would then not be considered further and would be excluded from applicant-hire analyses.
Helpful tip no. 3: Set parameters for how applicants are required to apply. This should include both the method of application and the time frames for applying.
A company evaluating whether applicants were properly considered should determine whether candidates who have expressed interest in open positions remain interested. Typically, a small number of candidates withdraw from consideration for an open position by actively informing the company they are no longer interested. There is often a larger group of applicants who withdraw either by failing to respond to company inquiries or by stating a demand that the company cannot meet. For example, both the candidate who doesn't respond to a phone call offering an interview and the candidate who asks for a salary the company cannot meet have withdrawn from consideration. Candidates who withdraw from consideration should be excluded from applicant-hire analyses.
Helpful tip no. 4: Track information on all candidates who withdraw from consideration and the manner in which these candidates withdrew.
Once the company knows that applicants have properly applied for a particular position, have met the basic qualifications for that position, and have not withdrawn from consideration, it's time to review the demographics for these applicants. OFCCP is now concerned about whether there is any discrimination involving RACE or GENDER. This means that federal contractors will analyze the percentage of the most favored class hired to the percentage of other classes hired. This is relatively easy when evaluating the impact of gender on selection, as one evaluates the percentage of males hired versus the percentage of females hired. Remember, though, that OFCCP is looking to see whether there is discrimination against any particular class. Thus, the hire of a disproportionate number of female applicants is now as problematic as the hire of a disproportionate number of male applicants.
The analysis involving race is more complicated. Traditionally, OFCCP was interested in whether minority applicants were hired at the same rate as white applicants. Now, OFCCP is interested in whether all racial subgroups are hired at equivalent rates. Thus, if the rate of Hispanic applicants hired is greater than the rate of white applicants hired and greater than the rate of black applicants hired, OFCCP may want information on why whites and blacks were less likely to be hired than Hispanics.
Helpful tip no. 5: Determine which class was the most favored class when reviewing rates of hire and compare other classes to the most favored class. Note that whites and males may not be the most favored class in some applicant-hire analyses.
Many contractors have conducted analyses of hires according to affirmative action job groups. (Job groups are groups of jobs that have similar content, wage, and opportunity for advancement. Job groups are used to set placement goals in affirmative action plans.) A proper analysis of hiring activity should focus on each individual requisition rather than all hires into a particular job group. For example, the requirements for each customer service representative position may be the same, but the requirements for each engineer position may vary greatly. It may be appropriate to review applicant pools for customer service positions together, while it would be inappropriate to review applicant pools for engineer positions together. When the manner or timing of the recruitment is different, or the requirements for open positions are different, the applicant-hire analyses for positions should be separate.
Helpful tip no. 6: Review applicant-hire statistics by looking at the results for individual requisitions, focusing on whether there is a disparity for any particular race or gender.
What does all of this mean for your applicant reports? It means that a useful applicant report should provide you with the following information:
- It should show you candidates by requisition.
- It should be able to exclude persons who didn't meet basic qualifications, who didn't properly apply for an open position, and who withdrew from consideration when providing a demographic picture of the requisition.
- It should allow you to compare applicants to hires in order to determine whether there was any kind of disparity involving race or gender within any particular requisition.
For more information on OFCCP's affirmative action regulations and on approaches for creating effective applicant reports, please contact me at email@example.com.