Companies conducting work on behalf of the federal government assume certain obligations.
One primary responsibility required of contractors is to prepare an annual Affirmative Action Plan (AAP) for minorities and women, for each location at which the company has 50 or more employees. In these plans, the company must account for all employees working within the United States and U.S. Protectorates.
After preparing their AAPs, organizations must carefully review every job group containing placement goals—targets that organizations establish as part of their Good Faith Efforts (GFE) to recruit and hire minorities, veterans, women, and individuals with disabilities.
Placement goals are often misunderstood. So it bears noting that in no way do such goals admit or indicate discrimination or result in financial repercussions—and the OFCCP makes that clear.
Placement Goals and How They Impact Hiring Decisions
Quotas, which are often perceived as synonymous with placement goals, are strictly forbidden by OFCCP regulations under 41 CFR 60-2.16 [PDF]:
In all employment decisions, the contractor must make selections in a nondiscriminatory manner. Placement goals do not provide the contractor with a justification to extend a preference to any individual, select an individual, or adversely affect an individual’s employment status, on the basis of that person’s race, color, religion, sex, sexual orientation, gender identity, or national origin.
By establishing the required placement goals, federal contractors
- Meet Affirmative Action regulations
- Uphold the OFCCP’s expectations for Good Faith Efforts
- Improve hiring processes for jobs that have Affirmative Action goals and placement objectives.
Meeting Placement Goals: An Example Scenario for Federal Contractors
Assume a federal contractor establishes a placement goal beginning December 31, 2018. And the hiring manager wants to source female job seekers for open positions in the company’s Engineering job group:
- Job group – Senior Engineers
- Placement goal – 50% female
- Minority – No.
In this scenario, to attract qualified female candidates, diversity managers should create and implement AAPs that include relevant Good Faith Efforts. For example,
- Attend job fairs focused on STEM jobs
- Offer scholarships and internships to female engineering students
- Develop and mentor women in STEM positions
- Recruit female alumni from university STEM programs
- Send job opening information to IEEE Women Engineers and Society for Women Engineers
- Provide outreach opportunities for female engineers
- Volunteer with engineering associations and programs for women.
Tracking Placement Goal Progress
The following year, January 1, 2019 – December 31, 2019, the contractor will monitor progress toward their placement goal. By the end of 2019, records show that that contractor either did or didn’t meet their placement goal:
- Senior Engineers – 10 placements
- Total female placements – 4 (3 hires and 1 promotion)
- Female selection rate: 40%
- Goal met – No.
What Happens When Federal Contractors Don’t Meet Placement Goals?
Regulations require contractors to report progress, or lack thereof, for job groups with established placement goals. When a goal isn’t met, the contractor must document both Good Faith Efforts and reasons for their failure to reach the target.
Although the federal contractor in this scenario didn’t meet their placement goal for the Senior Engineers job group, the OFCCP won’t impose any fines or penalties. But the contractor may be required to establish separate goals for that group, as stated in §60-2.16(d).
Potential Negative Impact of Placement Goals
Some hiring decisions for job groups with placement goals can produce adverse outcomes.
For example, if 3 females are hired for the Senior Engineers job group but 3 male applicants were more qualified, hiring decisions biased toward the placement goal could result in a discrimination claim if data show adverse impact exists at a statistically significant rate.
In any situation, an organization should base hiring decisions on qualifications related to skills, experience, and education.
4 Best Practices for Setting Placement Goals that Avoid Adverse Impact
1. Ensure the basic job requirements for open positions are accurate and valid.
If a federal contractor plans to hire an electrical engineer, it’s appropriate to require a degree in Electrical Engineering. However, the position shouldn’t require candidates to have a degree in an unrelated field, such as Accounting.
Ensure each job description doesn’t include any requirement that excludes applicants of a certain race or gender. For example, a job posting shouldn’t require inaccurate physical requirements. A job with a 100-pound lifting requirement—when in fact, the physical activity includes lifting no more than 25 pounds—could disproportionately disqualify females from the applicant pool.
2. Analyze applicant skills tests for potential discrimination, if applicable.
The EEOC’s Uniform Guidelines on Employee Selection Procedures require companies to demonstrate that skills tests—if used to make hiring decisions—have reasonable levels of validity, reliability, and fairness.
Tests should be validated for individual jobs at each organization. This process should be led by an expert trained in what are known as test validity studies. A test validity study is the industry standard for determining whether the result of a given skills assessment will be a valid indicator of a person’s success on the job.
It’s important to note that even after the validity of a skills test has been proven, the employer must also confirm that no other test could produce similarly valid results with a lower chance of adverse impact.
3. Document candidate information and the hiring process.
For all applicants under consideration, contractors should record qualification information, skills test results, and justification for selection decisions. This documentation can be used to prepare for a potential audit and, if needed, uncover and analyze potential adverse impact.
Federal contractors should only include candidates in the applicant pool for hiring who
- Express interest in the job and are considered for hire
- Meet the basic position qualifications
- Maintain engagement throughout the hiring analysis.
4. Include basic and preferred job qualifications.
If upon initial review, a contractor acquires two equally qualified candidates who meet the basic qualifications—but differ with respect to protected status—they should screen each applicant further based on the position’s preferred qualifications.
Additional qualifications can include
- Supplemental training
- Relevant language skills
- Experience working in a similar industry.
Placement Goals for Good Faith Efforts and Federal Compliance
Federal contractors are expected to demonstrate GFEs in talent acquisition. And as they pursue better diversity recruitment strategies, contractors must maintain compliance with all regulations that prohibit hiring discrimination, such as Title VII of the Civil Rights Act and the OFCCP’s Executive Order 11246.
When managers and recruiters have appropriate D&I training—and are educated on EEO laws and the consequences of discriminatory employment decisions—federal contractors are better positioned to attain placement goals, establish and implement successful Good Faith Efforts, and minimize the potential for adverse impact.