What's the "AHA!" REPORT all about?

This series of newsletters contains AHA! information to help people and organizations hire the best employees, make the best promotion decisions, retain the most qualified people, maintain the widest applicant pool, follow best practices, and (if you are subject to US law) remain aware of EEOC hot-spots.

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Election season is in full swing once again. As always, one of the hottest issues is regulation. In a perfect Republic would there be less of it, or even more? From some of the TV ads, you’d think the very idea was invented just recently, and will be gone starting next January.

Not so fast, people. Government regulation has been around as long as governments have. And whatever its merits, it’s here to stay. In some cases the looming cloud of regulation can even have a silver lining. As an example, this article discusses a particular set of federal regulations that have been in force for 32 years already – but that many employers still don’t seem to understand.

Note: This article is intended for people and organizations that might be affected by federal employment audits. It is not legal advice. It is intended only to provide general awareness of the consequences of poor hiring and placement practices.

Employment Audit-readiness: Built to Fail?
In my experience, there is very little corporate awareness of how to prevent (or failing that, prepare to survive) a hiring discrimination audit. Internal legal departments are often commerce and contract experts, and their law firm partners are often skilled litigators. They deal with the aftermath of poor hiring practices. There may be some who deal with problem prevention, but I am still waiting to meet one.

Whether they know it or not, HR departments often set up their organizations to fail federal audits. Especially if they believe interviews are not tests (they are), regularly fail to follow published federal guidelines that have been around for a generation, or both. How do they do this? They fail to provide:

• Documented, professional job analyses that identify critical job skills (e.g., they use job descriptions instead).
• Documented, validated tests and interviews that predict performance for each job (e.g., they often use tests that were never designed to predict job performance).
• Documented pass/fail reviews to assure candidates are not unfairly treated, followed up with documented amendments to the system that reduce adverse impact (e.g., they either never do it, or don’t follow up with changes).

Big Brother is Watching
A responsible HR department does more than submit EEOC reports. They know that the government is watching over the shoulders of most firms with more than 15 employees, especially regarding entry level people and internal promotions, looking for prima facie evidence that legally-protected groups are not being hired or promoted. Prima facie, a Latin term meaning “at first sight” or “on the surface,” is an important concept for us all to understand. It means that the agency uses statistics alone to determine intent to discriminate. That is, they divide candidates into demographic groups then examine statistical placement rates. That’s it. You don’t bet bonus points for effort or sincerity.

In most cases the federal regulations actually serve the best interest of the organization. Who can, for example, argue against measuring critical skills, using trustworthy tests, and keeping the applicant pool as large as possible? Unfortunately, when examined on a demographic level, some ages, genders, and races almost always score higher or lower than others on a given test. Prima facie evidence is not your friend.

To make matters more confusing, the Feds do not require organizations to hire everyone who applies (even the Feds use hiring tests), nor are organizations required to hire unqualified people. If the prima facie statistics look bad, then the Feds ask you to produce the documents I outlined above to show that you are doing your best. You don’t have them? Too bad. Win or lose, HR just started the organization down a long and expensive road.

Political Interests
We all want to think our elected officials act in our best interest. Good luck with that. In my experience, when it comes to “best-interest”, elected officials serve first those who can return the favor. So it is with employment audits. The Federal Government has two agencies actively involved in investigating hiring practices for adverse impact. Generally, these are the OFCCP for organizations doing federal work and the EEOC for everyone else.

Sources report under the current administration, both the EEOC and OFCCP are placing increased emphasis on criterion validity (e.g., tests and interviews that are based on measurable elements of on-the-job performance). This article in the National Law Review outlines the recent political emphasis. You can also find similar trends in the EEOC’s priorities here.

Reviewing your hiring process not only provides credibility for the occasional audit, daily, but it helps ensure your system is still screening-in the most qualified employees and screening-out the least qualified. That means getting the same work out of fewer employees, lower turnover expense, reducing training expense, and being a good equal-opportunity citizen as well.  

To put it all in perspective, what are your chances of engaging in a court action? Pretty small. What are your chances of engaging in an audit involving expensive legal fact-finding and settlements? Pretty big. What are your chances of enjoying a better workforce? Outstanding!