Part 1: The “Why” – Why Good Faith Efforts Are Important
The Impact of Good Faith Efforts on Talent Management
Every organization wants to identify and hire qualified individuals that will impact business results on day one. However, there are millions of talented candidates in the workforce who, for a number of reasons, are unable to connect with employers and find fulfilling careers.
These individuals typically fall into one or more of four groups recognized as facing significant barriers to employment: women, minorities, veterans and the disabled. While the reasons such groups continue to struggle in finding employment may vary, one thing is common – organizations that neglect to adapt their recruiting strategies to account for these groups will miss out on the opportunity to hire a diverse mix of employees who can bring numerous intellectual and emotional strengths to the organization.
To ensure these groups are not discriminated against and that they can obtain the same opportunities as others, the government requires that federal contractors and subcontractors take affirmative action to attract, engage and hire individuals without regard to race, color, religion, sex, national origin, disability or veteran status. One element of these Affirmative Action Plans that will immediately impact your recruiting is a Good Faith Efforts program.
For federal contractors, a Good Faith Efforts program supports this effort. And, though not required for non-federal contractors, this program can also protect you from potential accusations of discriminatory hiring processes, and ensure your company benefits from a diverse workforce. Moreover, progressive organizations today gain a competitive advantage when they invest in “diversity of thought” for their workforce.
Through a Good Faith Efforts plan, in which decisions are based on quantitative goals regarding the availability of targeted qualified applicants or current employees, you can ensure you are preventing and removing any discrimination from hiring and talent management processes, and that you are providing individuals with an equal opportunity to showcase their skills and competencies and find employment.
It should be noted that Affirmative Action efforts, including Good Faith Efforts, are not about setting aside certain positions for a specific group or working to meet hiring quotas. Rather, it should be about finding those high-potential individuals who might not otherwise be considered for a position,. A good Affirmative Action plan can help you and others in your organization understand how the company benefits from the range of new ideas and experiences a diverse workforce can bring.
Unfortunately, making Good Faith Efforts to hire from those four key groups is often not a top priority for employers, despite the many benefits. According to a survey conducted by The Conference Board and McKinsey and Company, diversity and inclusion programs ranked last in terms of the most critical priorities for human capital management.1 Yet, whether required or not, organizations that develop robust, effective Good Faith Efforts programs, through a combination of outreach, recruiting activities and training, can ensure they eradicate discrimination and hire high-performing candidates regardless of their background or unique personal circumstances.
OFCCP Requirements for Good Faith Efforts
Federal contractors must remember that a Good Faith Efforts program is required as part of their Affirmative Action Program. As the audit process of the Office of Federal Contract Compliance Programs (OFCCP) becomes more intense, contractors must go beyond simply reaching out to key groups and produce measurable results and documentation of their Good Faith Efforts to avoid violations. Keep in mind, as part of the Equal Employment Opportunity Commission (EEOC) 2013 Strategic Enforcement Plan, eliminating barriers in recruitment and hiring is one of the six strategic efforts for the next four years, from 2013 through 2016.2 Still, the past four years resulted in some of the highest number of EEO claims, and there is no sign of that changing.
So how can you ensure that your Good Faith Efforts will keep you from an OFCCP infraction? Track and record your Good Faith Efforts plan, and make sure that you maintain that record with the actions you take to execute on that plan. After all, the most common OFCCP violation is failure to keep proper records; with the variety of solutions available to organizations today, these infractions should be easy to avoid.
Keeping proper records is crucial not just to ensure compliance, but also to defend employment decisions in the case of lawsuits. For instance, without a proper record of why a certain person wasn’t hired, it will be easier for that individual to accuse the organization of discrimination.
Consider the example of one federal contractor that endured compliance reviews spanning seven years. The investigation uncovered systematic discrimination against 21,635 workers who applied for entry-level positions in 15 states. The affected workers included men and women; African-American, Caucasian and Native American job seekers, as well as job seekers of Hispanic and Asian descent. The audit concluded with a $3 million settlement due to alleged hiring discrimination allegations and extensive violations of record-keeping requirements. And, as part of that settlement, the company also had to extend job offers to 1,703 of the affected workers as positions became available, correct any discriminatory hiring practices, develop and implement EEO training, launch extensive self-monitoring measures and engage an outside consultant to perform an extensive review of the company’s hiring practices. The company also had to provide recommendations to change and improve those practices to train incumbent and future supervisors and employees, and to monitor compliance with EEO laws enforced by OFCCP.
Consequences of Neglecting Good Faith Efforts
For companies that are unable to show proof of their Good Faith Efforts, or neglect to develop a plan in the first place, there can be severe financial consequences, such as having to compensate discriminated employees with significant back pay and interest judgments.
However, the financial impact of noncompliance is only one consideration. Unwanted media attention for contractors and non-contractors alike who are found to have discriminatory hiring practices can damage the brand’s reputation and its ability to attract qualified new candidates, ultimately impacting the organization’s profitability. For example, electronics company Fry’s settled an EEOC sexual harassment and retaliation lawsuit for $2.3 million dollars and had to adhere to a three-year consent decree due to its poor hiring and management practices.
So whether you are a federal contractor or not, creating an Affirmative Action plan that incorporates Good Faith Efforts is an important and useful exercise that will help your company stay compliant and successful. But how can you build a program that’s right for your organization? Check back here next week for the next installment in our Good Faith Efforts series.
Want to learn more about incorporating Good Faith Efforts into your entire talent management strategy? Find more here .
1 The Conference Board and McKinsey & Company, “State of Human Capital Survey,” 2012