Lisa Rummler

Two years ago, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) asked federal contractors for their definition of an applicant. With the rise of the Internet and the corresponding slew of electronic applicants, recruitment practices of October 2005 were nothing like those of the previous decade.

Accordingly, this new technological age brought with it unique challenges, which the OFCCP sought to address in February 2006, when the comment period for the definition of an Internet applicant ended, and the office issued its final ruling.

Essentially, the ruling defined record-keeping requirements, the steps recruiters and companies must take to define their applicant pool and how they count their candidates.

The OFCCP allowed for a 90-day window after the February 2006 ruling for companies to comply with the new regulations, but today, many companies still struggle to meet them, if they’ve even begun to do so.

“The immediate impact was that everybody needed to change their process and their record-keeping requirement and recruit in an OFCCP-compliant manner,” said Kurt Ronn, HRworks president and founder. “The reason it’s important now is that the OFCCP is actually out there right now, auditing against that regulation.

“Most people will make an effort to make a change, but once the audits start, and the rulings come out, then companies will really pay attention and say, ‘Oh, my gosh, this is for real,’ instead of, ‘There are a lot of things on my plate, so I’ll deal with this when it becomes a problem.’ Well, it’s a problem now, and it’s a problem that’s discoverable back to February 2006.”

David Scheffler, HRworks director of recruitment compliance, said the OFCCP has changed regulations regarding the size of contracts, affirmative action compliance, etc., but this new regulation about record keeping and recruitment was unprecedented in its significance and scope.

“It actually extended into other areas it had historically not gone out to in the past, which is into third-party recruitment firms and into the whole recruitment process,” Scheffler said. “How quickly they came to enforcing it was even more amazing than the actual regulations.”

Ronn said the reason for this is because the OFCCP has shifted its focus to systemic discrimination, that is an element or elements of the recruitment process and hiring practices that systemically discriminate against women, minorities, etc.

To combat systemic discrimination, new record-keeping requirements the OFCCP set up require that you keep records, as well as solicit race, gender and ethnicity on job seekers. Additionally, for electronic applicants, there are new requirements.

“If you’re searching on the Internet, then you have to keep a copy of the search strings — what are the words you typed into Monster.com to generate candidates?” Ronn said. “And when you got 1,000 of them back, what data-management technique did you use to review them so that you’re finding the best candidate without discriminating against them?”

In regard to long-term effects, one of the biggest and most positive, Scheffler and Ronn said, is a reduction in systemic discrimination. This, in turn, will lead to a broader, more diverse pool of job candidates, which is especially beneficial in a tight labor market.

The new record-keeping requirement extends to third-party search firm agencies — vendors that supply candidates to companies for hire — something that will have a large impact on the recruitment industry.

“If the OFCCP says, ‘I need to know everyone you considered for this position and how you’ve selected, by stage,’ it means the third-party search firm needs to have the requirements and provide access to the data as if it were an internal recruiter,” he said.

Scheffler said he does not think the majority of the recruitment industry, however, has fully grasped what the new regulations mean.

“The short-term question is, ‘What do I need to do internally? The long-term question is, ‘What do my vendors need to do?’” he said. “And most of them do not realize right now the impact it’s going to have on their organization because the regulations set strict requirements on how you can search, how you can use rankings, tests and surveys, so a lot of the things staffing firms do to make the time to hire quicker and the selection of the candidates faster could be causing systemic discrimination on the part of that company. Under the new regulations, it states the company (that government contractor) is on the hook for all the fines and all the remedies from the OFCCP, and the actual staffing firm is not.”

And as the OFCCP’s audits roll in, best practices will be established, which will have more bearing on recruitment for government contractors.

“The challenge in all of this is that as precedent is set, it could change your practice,” Ronn said. “You have to stay on top of where the industry is, where the OFCCP is going and where the issues are. I don’t think there’s ever going to be a time when you can just ‘go it’ on your own, and that’s why we keep talking about this — governance has come to recruitment.

“The board of directors and the senior management need to recognize that what was, in essence, a record-keeping requirement became a compliance issue, but once the audits start happening, you’re really talking about corporate governance. It raises recruitment to a much higher level.

View the original publication in Talen Management Magazine online