Readying your business for a potential OFCCP audit requires a proactive mindset. Read this article from Affirmity’s Senior Business Consultant team, Aly Ferguson, Colleen Long and Amanda Carcaterra, to gain an understanding of the role of affirmative action plan monitoring reviews in remaining compliant, and learn the best practices that will help you execute them effectively.
All organizations should review monitoring reports in order to measure progress toward placement goals. The process requires businesses to evaluate existing outreach efforts and selection rates within their employment transactions.
When placement goals aren’t being met, affirmative action plan (AAP) monitoring results will help to pinpoint where adjustments to those efforts may need to occur. This may be in the form of training, communication, promotion activity, and/or targeted outreach and recruiting efforts. Without regular monitoring, how can you fully understand where the need exists for beneficial programs to remedy these shortfalls? Placing resources and dollars towards ineffective efforts that either won’t work for your organization, or making assumptions about what your shortfalls are, can ultimately lead to costly mistakes.
It’s important to emphasize that this isn’t a simple box-checking exercise. Contractors need to ensure that the programs they are building are action-oriented, and that they will yield results. In this article, we take a closer look at why AAP monitoring is so important, and provide some practical tips for conducting effective monitoring reviews.
Why Is It Important to Monitor Your AAPs?
Reviewing your employee transaction data and outreach programs is an essential process when creating a culture of diversity and inclusion (and to reap the rewards that such a culture brings). Monitoring allows you to essentially create a report card that tracks the progress of your company’s affirmative action plan and make decisions to help strengthen the overall program.
Monitoring Lets You Course-Correct to Achieve Your Goals
It’s not uncommon to see organizations monitor their affirmative action programs once per year, usually at year-end. This could mean an entire year of heading in the wrong direction, without an opportunity to assess and make adjustments. It also means being unable to react to changing business climates until the next monitoring cycle.
Consistent monitoring allows organizations to identify recurring negative patterns or trends and take corrective action. Self-auditing can help you discover problem areas before the OFCCP does. Identifying your needs early allows you to begin working towards more effective and targeted good faith efforts and prepare for communication with the OFCCP should the need arise.
Also on the blog: ‘Leveraging your AAP for Better Workforce Insights’
Monitoring Keeps You on Top of Data Integrity Issues
Many businesses can attest to the pains of managing HRIS and Applicant Tracking System (ATS) data. Creating a more frequent monitoring schedule rather than once per year means less time spent correcting inaccurate or missing information. Some common data integrity issues to watch for include:
- Missing race and/or gender data
- Missing or inaccurate self-identification disability and veteran status
- Incorrect transaction reasons
- Back-dated hires or terminations
- Missing or incorrect EEO codes and job groups
- Employees entering or disappearing from snapshots without hire or termination records
- Hires with no supporting applicant record (also known as 1:1 hires)
- Incorrect or missing disposition reasoning in applicant flow records
These errors can result in skewed or inconsistent numbers directly related to your affirmative action plans. By reviewing your ‘applicant to hire’ and ‘headcount to promotion’, and termination data on a more frequent basis, you have the opportunity to spot these issues early on and course-correct.
Regular AAP monitoring gives contractors a chance to review discrepancies, and correct data queries within the HRIS or ATS. If monitoring is only done on an annual basis, too much time may pass before corrective action may be taken. This may be especially challenging for organizations with high-volume transactions and employees.
Monitoring Stops You From Wasting Time and Money
Unmonitored or poorly monitored programs of any kind inevitably waste time and money. Similarly, ineffective outreach programs can consume a considerable degree of resources and budget dollars. In a worst-case scenario, they can attract substantial fines when they fail or create adverse impact with selection rates. Once identified, mistakes can take time to correct.
In some cases, these changes may involve a shift in company culture and previous business practices. This will mean buy-in from internal stakeholders and business practice owners to change processes and break old habits.
Continuous review of your action-oriented outreach programs and good faith efforts ensures you are spending time and money on the most effective practices and resources. Additionally, the OFCCP requires organizations to evaluate the results of these programs at least annually. The OFCCP has a particular focus on weeding out passive practices. Long-term, effective programs are now necessary to ensure compliance with the OFCCP.
Hand-picked for you: ‘Workforce Diversity Series: 4 Ways to Build a Diverse Organization’
What Does Effective Monitoring Look Like?
Hopefully we’ve created a sense of the importance of monitoring your AAPs. But what is needed for a monitoring effort to be truly effective? Key areas to focus on are:
- Abnormal selection rates of particular classes for hires, promotions and terminations
- The utilization of individuals with disabilities, protected veterans, females and minorities
- The ideal frequency for your monitoring reviews.
Using Standard Deviation to Monitor Adverse Impact
Standard deviation is the main tool for uncovering adverse impact in personnel actions. Any area of hire, promotion or termination activity that has a standard deviation of 1.96 indicates a more in-depth review is needed.
Areas that display this characteristic must then be investigated for potential systemic issues, common threads and explanatory factors. Consider whether the standard deviation occurs:
- Multiple times within a certain department or with a certain manager, or a certain business unit
- In conjunction with newly introduced processes. For example, have you introduced guidelines for the use of certain disposition reasons in your candidate rejection process?
- In terminations, with a disproportionate impact on a specific class. This should prompt further analysis of whether a hostile work environment is the driving cause of those terminations.
- When terminations are involuntary, there is usually an adequate paper trail to work with. Layoffs are a naturally complex and widely scrutinized area.
- Voluntary terminations, on the other hand, require special scrutiny. Check exit interviews for widespread reasoning for the termination, and potential remedies. Is a particular group leaving to go elsewhere for better pay or advancement opportunities? Are certain managers, departments or business units being cited?
- In promotions,the analysis should focus on whether:
- There is documentation to support the promotion
- The promotions are competitive or non-competitive
- There is a systemic issue causing certain groups to be promoted over other groups
- In hiring. All standard deviations 1.96 and above should be reviewed. Compared to other areas of an audit, the OFCCP spends a substantial amount of time reviewing a contractor’s hiring process, applicant flow and selection rates. Consider:
- What does the selection process look like?
- Where in the process are candidates being removed from contention?
- Are recruiters accurately dispositioning candidates?
- Do disposition codes adequately differentiate between applicants who do not meet minimum qualifications and those that were/were not considered for the job?
- Do you have feeder requisitions, evergreen requisitions, or any type of ‘talent pool’ requisitions where multiple hires can occur or shifts in applicant pools happen?
- Is a steps analysis required to review why candidates are falling out of the process at a disproportionate rate?
Read more from the blog: ‘How Placement Goals Affect Recruiting and Workplace Diversity’
Effective AAP Monitoring Includes IWDs and VETS
Remember that you have a responsibility to monitor your progress with regards to goals for individuals with disabilities (IWDs) and protected veterans (VETS). As these goals are determined by the OFCCP, you should evaluate the number of IWDs and protected VETS relative to the overall employee population and hiring practices. When evaluating good faith efforts with these groups, monitoring can help you determine whether programs are beneficial and whether they are providing the desired results.
Hitting the Sweet Spot for Monitoring Frequency
As previously explained, monitoring your AAPs just once a year can greatly undermine your ability to course-correct. All contractors should monitor at least twice per year. We recommend a year-end and mid-year monitoring regime in order to provide adequate coverage for most businesses. This twice-yearly approach also makes it easier to respond when an OFCCP audit notice arrives unceremoniously partway through your year.
While quarterly monitoring would technically be an even better regime for contractors to keep to, it isn’t for everyone. It requires time, resources and a level of system ability capable of meeting a quarterly workload. In other words, you need to be able to monitor and react before the next cycle starts. We therefore primarily only recommend quarterly monitoring to contractors with higher-volume hire, promotion and termination activity than average, and only if the contractor has clean data that can be reviewed. This will ensure an effective and responsive program.
In need of further guidance on conducting effective monitoring reviews and addressing the diversity and inclusion objectives of your business? Contact the Affirmity team for more information.