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Affirmative Action Compliance Doesn’t Have to Be Difficult

Covering the Bases  |  By Sarah Babineau


Few industries are subject to more regulatory oversight than financial services. And there is very little difference between large, global, commercial financial institutions and small, community-oriented banks with small HR departments, limited resources and budgets – at least in terms of affirmative action compliance. But small community banks need not use expensive applicant tracking or human resource management software to ensure compliance. Often, the same levels of data collection and reporting can be achieved using your payroll system and a combination of Excel spreadsheets or Access databases.
Here are three things to look out for:

1. Make sure your consultant
knows what they are doing.
Few things will throw your efforts off faster than hiring a subject matter expert who doesn’t have the most up-to-date information about requirements, analytics or audit strategies. The world of affirmative action is changing at a dizzying pace and what was true even six months ago, may now no longer apply. So what can you do?
Read through a recent Affirmative Action Plan (AAP).
Do you understand everything?
Has your consultant explained any
confusing sections?
Are there references to reports or activities
you don’t have?
Are there references to time frames
that are inaccurate?

If you see a statement along the lines of “we run quarterly reports on performance and train all managers annually,” and you know you are not actually doing that, beware. While some standard language referring to typical annual obligations are okay, pages of boilerplate language like this are not your friend. When your CEO signs that she has read the AAP and assigned responsibility for the AAP to the vice president of HR, the Office of Federal Contractor Compliance Programs (OFCCP) expects that all signatories understand the obligations and activities reported.
Bottom line: if you’re not doing the activity, or not doing it on the schedule implied in the AAP, remove or change the language.
When hiring someone, ask what sources they use to keep current on developments.
Are they involved in an industry liaison group?
Do they receive email updates or attend free webinars from OFCCP or law firms?
Do they have connections with other AAP professionals?
Do they keep you apprised of changes?

The world of affirmative action is vast and OFCCP in each region operates somewhat independently. Knowing the regulations is a good start, but having connections that keep you up to date with audit trends will help identify any new areas that need attention. In general, the fewer surprises, the better. Make sure your consultant has multiple, reliable sources of information so they can give you as many options for compliance as possible.

2. Make sure you know which data to collect
Writing a compliant AAP starts 12 months or more before the plan date. Much of compliance is knowing what data to collect over the year and making sure it is complete and accurate. Once the plan year has passed, it is too late to go back and review disposition codes for applicants that were not hired, reasons why employees terminated, or reasons for changes in title or compensation. This information is critical if red flags show in any of the analytics. Once problem areas are identified, the raw data should be reviewed for nondiscriminatory reasons that could have triggered the red flags.
See Examples below:
This data is especially important if an audit turns into an onsite review, which OFCCP now requires in 25 percent of all audits. Having the original documentation available to refresh everyone’s memory takes a lot of stress out of the prospect of having to explain decisions to a compliance officer.

3. Make sure your systems are easy to use and capture everything you need
Applicant tracking and human resource management systems are great, but they can be expensive, hard to implement and challenging to use. If most of the information you need is already in your payroll system, it may not be worth the investment. Carefully designed spreadsheets and databases can accurately capture the supplementary data you need.
Fields can be structured so that job titles, names and other important information is captured in the same format every time. Fields that are required to contain data can be flagged so they can’t be skipped. This makes it easy for even the newest HR assistant to easily and accurately track data.
Without audit experience, it’s hard to know exactly which data becomes the building blocks of a compliant AAP. Having easy to use structures in place before your plan needs updating (or before OFCCP comes knocking) takes the stress and uncertainty out of the entire process. Your consultant should feel like an expert resource to whom you can turn to make informed decisions about AAP compliance.■

Sarah Babineau, MHR, PHR, SHRM-CP, is the managing partner of Compass Metrics LLC, a woman-owned, disability-owned consultancy. She is a subject matter expert in affirmative action and diversity and inclusion for community-oriented banks. For a free review of your bank’s AAP, please email

Posted on Wednesday, August 31, 2016 (Archive on Tuesday, November 29, 2016)
Posted by Scott  Contributed by Scott


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