By Kurt Ronn, president and founder, HRworks
A perfect storm of economic events is upon us. The economy is in recession, the cost of servicing our national debt is rising, the healthcare system is in crisis, and we are engaged in wars on multiple fronts. Our dependence on foreign oil continues, the inevitable aging of the population is putting pressure on social entitlement programs, and retirement, while briefly postponed, threatens the future supply of talent.
The new administration’s challenge is this—be all things to all people. There is not enough money in the U.S. financial system to solve all of the problems at one time.
Consequently, tough decisions will have to be made concerning priority and funding of government agencies. Departmental budgets will be cut or reallocated, as any politically acceptable tax increase will not be able to cover the current economic crisis’s need for cash.
Businesses have made enormous productivity gains through technology advancement over the past 20 years. Government needs to do the same. The solution is to do more with less. The Office of Federal Contract Compliance Programs (OFCCP) is well positioned and is a model for other U.S. Department of Labor (DOL) agencies.
By focusing on systemic discrimination and recognizing the impact technology has made on talent acquisition, OFCCP has been able to increase settlements by over 100 percent since 2002. Estimates for this fiscal year will exceed $65 million in make-whole remedies, another 27 percent increase over last year’s record. There are not many commercial enterprises posting similar increases.
OFCCP’s Internet Applicant ruling in 2005 provides the data points necessary to make large systemic settlements. This recordkeeping burden builds on the 30-year-old Uniform Guidelines on Employee Selection Processes (UGESP) rule, which recognizes that hiring decisions are made in stages. Each hiring decision stage has a potential of adverse impact and possible discrimination.
The genius of the OFCCP ruling is that combining UGESP along with electronic applicant data creates large amounts of data records. The more data, the greater the chance of adverse impact and the greater the potential settlement: more with less.
The Equal Employment Opportunity Commission (EEOC) created a systemic task force in 2006 and came to a similar conclusion that reviewing cases for systemic impact could yield a larger result. Combining the subsequent Eradication of Race and Colorism in Employment (E-RACE) initiative with the task force’s systemic initiative puts EEOC on a convergent path with
OFCCP—more with less.
It has been 2 years since OFCCP and EEOC decided to walk down the path of systemic discrimination, and employers need to take heed. The penalty for not reviewing your recruitment and hiring practices with a systemic view is substantial. With up to 2 years of available hiring data, think class action versus individual cases.
Employers can anticipate that the new administration will intensify systemic initiatives, as they have the potential to yield high-value, high-profile cases. These cases will demonstrate the effectiveness of the agencies and the administration, while helping large groups of adversely impacted individuals. Large settlements also create a media following, which helps spread the warning and change behavior at no extra cost.
So, given the myriad crises facing the new administration, expect DOL to be challenged to do more with less. Given the groundwork established over the past few years, it is possible that their productivity increases will be able to outstrip the economic performance of most business enterprises.
Remember that their financial success (make-whole remedies and large settlements) depends on employers not improving their own performance in regard to reducing systemic discrimination in recruitment and hiring practices.
There is no excuse for employers, as the data are available to both sides, and the recruitment and hiring practices
are exclusively within the employer’s control. Think systemically, and do more with less in 2009.