A Three-Point Plan for Scouting Talent

How recruiters can make complying with new federal guidelines a rewarding process that results in better hires

by Kurt Ronn

Governance has come to recruiting with the new systemic employment discrimination approach of the Office of the Federal Contract Compliance Programs (OFCCP) and the Equal Employment Opportunity Commission's (EEOC) Systemic Task Force Report of March, 2006 (see BusinessWeek.com, 3/6/07, "Rethinking Talent Acquisition").

Both agencies have recognized that technology, and specifically the Internet, have revolutionized recruitment. Recruiters can access millions of job seekers on electronic résumé databases and millions of job seekers can apply online via corporate career sites. Such electronic access broadens the candidate pool, but it can also be used by recruiters to narrow the pool, sometimes with negative or "disparate adverse impact."

As defined by the EEOC and the OFCCP, disparate adverse impact occurs when an employer uses an employment practice that has an unjustified adverse impact on members of a protected class (e.g., race, gender, or ethnicity). For example, if a recruiter excludes from Internet search results zip codes that are predominantly populated by African Americans, there could be discrimination based on how the technology was used. Using systemic discrimination as a benchmark can result in much larger conciliation agreements or settlements than individual cases. It's the equivalent of creating class-actions vs. individual lawsuits.

First Things First

The new emphasis on systemic employment discrimination forces companies to change their talent-acquisition process to be compliant. Rather than complain about recruitment constraints or disregard the new regulations, companies must find ways to work within the guidelines. The result will be a more effective process, less discrimination, and better talent.

The workforce plan of any organization should first determine talent needs, and then create a strategy according to that plan to ensure the company gets more than its fair share of available talent. A good plan should identify any new areas for sourcing candidates, since competing for talent from too shallow a pool perpetuates existing bias (e.g., male-dominated) and can result in unfilled positions or increasing wage pressure. Broaden the pool to focus on the basic skills required for the position.

With a complete workforce plan in place and a talent-procurement process that has been defined and documented, companies should next evaluate each stage of the process—from sourcing candidates to interviews to hiring—to ensure compliance and that no systemic discrimination exists. Systemic discrimination can happen at any stage, and even in third-party search firms.

Consider Centralizing

All companies have recordkeeping requirements (e.g., who was considered, how they were located, why were they selected, etc.) and are expected to justify decisions at each stage in the selection process during an OFCCP audit. Federal contractors, however, are accountable for the actions of third parties as well as their own decisions.

Thus, it's critical to enforce compliant recordkeeping. Both the OFCCP and the EEOC can consider failure to provide adequate recruiting records as an attempt to conceal discriminatory practices. Recordkeeping is the employer's responsibility and cannot be delegated to a third party.

Consider centralization of recruitment resources and investment in recruitment technology to maximize the effectiveness of the workforce plan as well as improve the ability to measure the effectiveness of the organization. Applicant tracking systems (ATSs) track candidates electronically as they flow through specific recruitment stages from sourcing to hire.

Breaking Down Silos

The defined recruitment stages within an ATS force recruiters and hiring managers to document their recruitment, resulting in a higher level of consistency and visibility. The resulting data can be analyzed for systemic discrimination as well as a host of other issues (e.g., time-to-fill, source of candidates, interview-to-offer ratio, etc.) to help pinpoint areas for improvement in the talent-acquisition pipeline.

Plus, centralized recruitment resources that are standardized in process can work across the enterprise and across functions to result in the right recruitment talent in the right place. Many companies choose to silo their recruiting resources by function, division, or geographically. Doing so risks missing synergies gained through centralizing and standardizing the process.

Standardization improves execution: The process becomes scalable and enables the company to build better metrics, have a higher level of accountability, improve compliance, further mitigate risk, and, most important, leverage the brand.

Creative Advantage

Recruiters and hiring managers should be trained to be compliant with the new process and then held accountable. They should work to eliminate personal preferences. Once a standardized compliant process is set up, companies should self-audit. Ask not only about performance and goals but also, "How are we doing from a compliance point of view?" (Akin to public companies and Sarbanes-Oxley.)

In most instances of discrimination, the hiring managers are unaware it's occurring. Rather than waiting for the government to come and check it out for you, self-auditing the recruiting process by stages will raise awareness, and can be an effective tool for improvement.

The goal is always to hire the best talent—and to do it better than the competition. And the reality is that companies must comply with the new OFCCP and existing EEOC regulations. The government has pointed out a valid concern—systemic employment discrimination in the recruitment process.

This situation actually presents an advantage: Companies are being asked to be creative, to design and implement a compliant systemic talent acquisition engine. Better process and execution can actually strengthen the employment brand, diversify the talent pool, make everyone more accountable, and heighten a company's competitive advantage.

Kurt Ronn is the president and founder of HRworks, a national recruitment firm that helps major companies acquire talent to build their organizations. He is a contributing columnist for BusinessWeek.com.