Steering is the policy or practice of directing applicants or employees to certain jobs (or departments) based on stereotypes and biases. The result of steering is a concentration of one group (e.g. women and minorities) into certain jobs (or departments) and a concentration of another group (e.g. men and Whites) into other jobs (or departments). The concentration of employees according to protected class subgroup status may result in differences in the terms and conditions of employment across subgroups, such that women and/or minorities receive lower compensation and/or less opportunity for advancement. It is clear that OFCCP considers steering a problem in federal contractor workforces, as evidenced by OFCCP’s compensation Directive 307, the revised FCCM, a myriad of public comments on the issue by OFCCP officials, and current enforcement strategies. In fact, compliance officers are now being directed to look for and investigate steering during compliance reviews. Given OFCCP’s substantial focus on issues of steering, and their apparent assumption that steering is a rampant issue at federal contractor establishments, we offer the first installment of a blog series focused on steering issues and trends that we have recently encountered during OFCCP audits.
The theory behind steering is that those selecting and placing employees have stereotypes and biases (conscious or unconscious) about the type of work that is suitable for minorities or women and the type of work that is suitable for Whites or men. For example, a contractor may have open positions for entry-level jobs. One of the entry-level jobs may require heavy lifting and pays a premium compared to an entry-level job that does not require heavy lifting, but pays less. A practice of steering women to the job that does not require heavy lifting without (a) allowing the applicants to choose the job of interest, (b) without evaluating the requirements of the job, (c) without evaluating the qualifications of applicants, and (d) without matching those to each job whose qualifications best match the job requirements, may result in an allegation of steering.
Many in the contractor community have noted that steering is not really a compensation issue but a selection and placement issue, despite OFCCP’s practice of claiming that a steering violation is a compensation violation. Although a legitimate case of steering may result in members of a particular protected class subgroup being paid lower than others due to the nature of the jobs in which they are placed, the problem originates with the selection and placement processes rather than the compensation policies. Should a failure to hire case be treated as a compensation case, given that not being hired affects an individual’s earnings? Should a wrongful termination case be treated as a compensation case, given that not being employed affects an individual’s earnings? Most certainly not.
Does it matter whether one views steering as a compensation issue or a selection issue (or, more particularly, as a placement issue)? In our view, not from an investigation standpoint, but it may matter from a standpoint of how settlement dollars are categorized in government yearly reports. Whether you begin with compensation and take the roundabout journey to the selection and placement practices, or simply begin there, questions of steering are answered through evaluation of personnel selection and placement policies.
DCI has noted many compliance reviews where steering concerns have been addressed by the OFCCP. Additionally, OFCCP officials recently discussed steering as a prime focus of the agencies during compliance reviews, often in conjunction with investigating possible compensation discrimination. DCI has experienced audits where the OFCCP, in investigating compensation discrimination, has asked for information to help assess whether or not there is evidence of steering. In addition to relevant compensation information, the data requests include information such as:
- Job Title at hire
- Job Group at hire
- Salary Grade/Level at hire
- Last employer prior to hire at the organization
- Organizational charts
- Hours worked and overtime payments
In other audits, the OFCCP has focused on the Workforce Analysis or Organizational Profile to identify departments where there is a concentration of minorities or women to help build a case of steering at an organization. This information is used with other components of an AAP, as well as an on-site investigation to observe evidence of minorities or women physically situated in the same area of the workplace. In some instances, OFCCP has gone back to an old practice of using the Job Area Acceptance Range (JAAR) report to look at department to determine if there is a concentration or underrepresentation of certain groups. (Note, this is an analysis developed by OFCCP a very long time ago and has absolutely no predictive validity and is not statistical sound. OFCCP stopped using it in the late 90s and apparently it has been dug up and put back into practice.)
The OFCCP has indicated that they will evaluate a variety of factors to determine if steering is present at a contractor’s organization. Some red flags that have been discussed at the recent NILG conference in Washington, DC include:
- Examining hiring, promotion, and placement adverse impact analyses by level; are particular race/gender groups being impacted in certain jobs or job groups?
- Review the workforce departments and areas of the organization – are there concentrations of particular racial groups or a particular gender?
- Analyze compensation data – are there race or gender influences in how employees are paid?
There are a number of ways to protect against an allegation of steering, some having to do with data management and some having to do with the particular procedures in place for selecting and placing employees. Posts later in this series will address many of them in detail, but we list some of the more obvious measures below:
- Use separate requisitions for separate jobs and positions. It is a mistake to create a broad job requisition for recruiting applicants to many different positions. For each position that is open, a separate requisition should be created to limit the number of applicants to be processed. For each requisition, be sure to list the job qualifications and to the extent possible the pay ranges for each position.
- Use valid selection procedures. If selection rates differ across protected class subgroups, it is important that the selection procedures are shown to be job-related and consistent with business necessity. See our series on the Uniform Guidelines for an introduction to this topic.
- Use a standardized and neutral procedure for placement. Once a pool of qualified candidates has been identified, use a process such as first-to-apply or random placement rather than allowing a hiring or other manager to place employees at his/her discretion. In a first-to-apply procedure, the qualified applicant who first applied is offered his/her choice of position, shift, etc., followed by the qualified applicant who applied second, and so forth until all specific positions are filled. This removes the argument that steering occurred, as applicants self-selected into the particular position that best worked for them. In a random placement, the individuals in the group of qualified candidates are randomly assigned to particular positions.
By: Joanna Colosimo and Kayo Sady, Ph.D, Senior Consultants, DCI Consulting Group