Beth A. Ronnenburg, SPHR, president of Berkshire Associates Inc., discusses how updated data on the U.S. workforce issued by the Census Bureau will affect federal contractors establishing placement goals for women and minorities and what contractors need to understand about the goals.

"I think it is important for contractors to realize setting placement goals is the start of the race and not the end," said Ronnenburg, whose Columbia, Md. consulting firm specializes in human resource compliance.

Under Executive Order 11,246, government contractors that are required to maintain written affirmative action plans (AAPs) must establish placement goal for women and minorities in job groups where either protected group is underutilized.

In November 2012, the Census Bureau started releasing its equal employment opportunity (EEO) tabulation, a set of 107 tables describing the U.S. labor force by sex, race, and ethnicity and searchable by geographic location, occupation and other variables.

The Census Bureau gathered the data at the request of the Office of Federal Contract Compliance Programs and three other federal agencies. Contractors, however, are still waiting for OFCCP to issue a directive on how to use the new EEO data for their AAPs.

Bloomberg BNA: How do you see the new census data affecting contractors establishing placement goals for women and minority groups?  

Ronnenburg: I believe the new census data will increase the likelihood that federal contractors will have placement goals for minorities. When comparing the U.S. demographics from the 2000 data to the new EEO data, minority representation increased in each of the nine EEO-1 categories.

We saw the largest percentage increase (30%) in Craft Workers followed closely by Officials & Managers (28%) and the smallest percentage increase (16%) was in Operatives and Laborers.

Interestingly, for women the largest percentage shifts were decreases in Craft Workers (15%) and Laborers (11%). The largest percentage increases for women were in Officials & Managers (5%) and Professionals (4%).

We have been hearing from our clients for some time they are having a hard time recruiting women in the traditional "blue collar" jobs and the statistics appear to support their findings.

I anticipate contractors will be setting less placement goals for women in these job categories and more than they are now in Officials & Managers and Professionals.

Bloomberg BNA: Do federal contractors located in majority-minority areas of the country, where the minority of the population is composed of non-Hispanic whites, face any unique challenges in setting placement goals for minorities in their AAPs?

Ronnenburg: I think the challenge part comes in when you communicate those goals to recruiters and managers. It is important to explain that while the availability may be showing the minority group is actually the majority, a goal will still need to be set if your employment is "reasonably less" than the availability. The regulations do not allow contractors to account for these situations when it comes to goal setting.

This is not a new challenge though, because contractors are often required to set goals for women in the Administrative Support Worker category. I recall having to explain to a client that even though they had 87 percent women in their Administrative Support Worker category, they had to establish a goal for women because the availability was 92 percent.

Bloomberg BNA: In general, what are the variables that contractors must consider in setting placement goals for specific job groups regarding minorities and women?

Ronnenburg: There are two variables a contractor considers when developing availability statistics, which ultimately lead to placement goals. The first is external availability. This is the percentage of minorities and women with the skills to perform the jobs in the geographic recruitment area where the company recruits.

The second is internal availability. This is the percentage of minorities and women among those promotable, transferable, and trainable within the contractor's organization. While you must consider both variables, there is no requirement you have to use them both.

For example, you may have a job group that represents entry-level positions in your organization. In that case, you would only utilize the external availability variable, since most hires would come from outside of your organization. When both variables are in use, you have to decide the relative weight to place on both factors.

Bloomberg BNA: For compliance purposes, how does a contractor determine minority groups and women are underutilized in a certain job group?

Ronnenburg: As a part of a contractor's AAP they must calculate the percentage of minorities and women they have employed (incumbency) as well as the availability percent by job group. Once those calculations are complete they compare their incumbency to the availability to determine if a placement goal needs to be set.

The regulations state "when the percentage of minorities or women employed in a particular job group is less than would reasonably be expected, given their availability percentage in that particular job group, the contractor must establish a placement goal."

Contractors, not the government, get to choose one of four acceptable utilization "rules" to assist them in establishing placement goals.

The most stringent rule a contractor can use is the "any difference" rule. This means a placement goal would be set if the employment percentage was less than availability by any difference. Most contractors avoid this rule.

Next, there are two rules that are considered middle of the road. The first is the "whole or one person" rule. This means a placement goal would be set if the employment percentage is less than the availability percentage by at least one whole person.

This rule works well in plans that have smaller sized job groups. The second is the 80 percent rule. This means a placement goal would be set if the employment percentage is less than 80 percent of the availability percentage.

This rule works better in plans that have larger sized job groups. The final and most lenient rule a contractor can use is the "statistical significance" rule. This means a placement goal would be set if the employment percentage is less than the availability percentage by a statistically significant amount.

Contractors appreciate the flexibility to choose the rule that best fits their organization's situation.

Bloomberg BNA: Do most contractors understand placement goals are not quotas or unlawful preferences?

Ronnenburg: At this point most existing contractors understand placement goals are not quotas or unlawful preferences. In most cases we are dealing with a company's human resources department so they tend to "get it" but we often have to help them explain it to their managers.

We tend to spend more time with new contractors explaining the differences between the two. It helps to explain there are no penalties for contractors when they do not meet their placement goals.

Bloomberg BNA: Any final thoughts on establishing placement goals for AAPs?

Ronnenburg: I think it is important for contractors to realize setting placement goals is the start of the race and not the end. Once the goal has been established, contractor's now have the obligation to apply "good-faith efforts" towards meeting their goals. These efforts need to be different from what they did in the past since those efforts ultimately produced inadequate results.

Looking forward, it is quite possible that numeric placement goals for veterans and individuals with disabilities will be required in the future.

Contractors need to ensure they are taking their placement goals seriously and working with their entire team to develop, implement, and document their good-faith efforts for all covered groups.

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