Tech Sector Diversity: More Rules May Not Be the Answer

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By Jay-Anne B. Casuga

Tech workers largely remain male and white. But increasing diversity is a complex issue that doesn’t have only one solution.

Google, Apple, Facebook, Twitter, and other companies over the past few years have publicly released annual diversity reports that show that white men still outnumber women and minorities in their workplaces. That’s despite a former Google engineer’s recent allegations that the tech giant “goes to extreme—and illegal—lengths” to take “race and/or gender into consideration as determinative hiring factors, to the detriment of Caucasian and male employees.”

Employer-side representatives tend to agree that more federal regulation of government contractors isn’t one of the answers to the tech sector’s diversity problem.

“Compliance obligations are not the cause or the remedy for the race differences we see in the tech sector,” attorney Matthew Camardella of Jackson Lewis in Long Island told Bloomberg Law. “There are more systemic issues that root back to primary and secondary education, and affect getting historically underrepresented groups exposed to careers in technology and ready for employment in that sector.”

GAO: Labor Department Recommendations

Men make up about 78 percent of tech workers, while whites account for about 67 percent of employees in the sector, according to a report released late last year by the Government Accountability Office. The GAO is a nonpartisan, independent agency that works for Congress.

The federal government could help make the tech sector more diverse, the report said. It provided a short slate of recommendations to the Equal Employment Opportunity Commission and the Labor Department—agencies tasked with enforcing workplace nondiscrimination and equal employment opportunity requirements—on how they could increase the number of women and certain minorities in the tech industry.

One recommendation would require government contractors under the DOL’s jurisdiction to establish minority-specific hiring goals every year. But that requirement would require revisions to current agency rules. Given the Trump administration’s vow to reduce government regulation, it’s unlikely that either agency would be willing to engage in extensive rulemaking, attorneys said.

Additionally, such a rule wouldn’t have as much of an impact on tech sector diversity as other GAO recommendations or other internal improvements the agency could undertake, they said.

A Labor Department spokesman declined to comment on the office’s recommendations outside of the agency’s official response in an October 2017 letter, which was included in the GAO report’s appendix.

Minority-Specific Hiring Goals for Contractors

The DOL’s Office of Federal Contract Compliance Programs annually audits government contractor compliance with affirmative action and nondiscrimination requirements. Traditionally, about 1 percent to 2 percent of roughly 200,000 federal contractor locations are audited each fiscal year, though that number has steadily decreased in the past several years for a variety of reasons.

The agency reviews contractors across industries, and it has closed roughly 500 or less tech sector audits each year since fiscal 2013, according to a previous Bloomberg Law analysis.

As part of their compliance obligations, contractors must set hiring goals for all minorities as a total group rather than for specific racial or ethnic subgroups. The GAO recommended that the contractor watchdog consider requiring specific hiring goals for separate minority groups. It pointed to data showing that although Asian representation in the tech sector has risen, the percentages of black and Hispanic workers have remained relatively stagnant.

The OFCCP in response said that would “require a regulatory change with little immediate benefit resulting at the current time.”

Hiring goals broken out by specific race and ethnicity categories could help contractors in all sectors, not just technology, understand the makeup of their workforces and improve diversity, Pamela Coukos, a former OFCCP senior program adviser during the Obama administration, told Bloomberg Law. Coukos is now a co-founder and principal of Working IDEAL, a consulting firm in Washington.

David Cohen, president of DCI Consulting in Washington, agreed that specific goals would provide additional data points for contractors to identify and target areas of underrepresentation.

However, Cohen, Coukos, and others observed that the current administration’s resistance to new regulations would likely nix the prospects of rulemaking that would place more compliance obligations on federal contractors.

Furthermore, many larger tech companies already have diversity and inclusion programs that focus on specific race groups for recruitment, selection, training, and advancement efforts, making added regulation unnecessary, the management-side attorneys said.

Non-Rulemaking Ideas Better Received

The GAO’s other recommendations for the OFCCP, as well as the agency’s own internal plans, may have more of an impact on increasing diversity, representatives said.

“Diversity in the tech sector is an issue much greater than an OFCCP audit,” Cohen said. “Does OFCCP have a part and a role? Sure.”

For example, the lawyers and consultants welcomed a GAO recommendation that the agency explore other ways for contractors to create affirmative action plans beyond the traditional geography-based approach. The agency currently does allow contractors to seek permission to create affirmative action plans based on business unit or function, but that current process can be cumbersome, attorneys said.

“The old bricks-and-mortar, establishment-specific AAPs often do not align with how these modern organizations and industries structure themselves,” Mickey Silberman, an attorney with FortneyScott in Washington, told Bloomberg Law. “It’s likely that new OFCCP leadership will again try to be more employer-friendly and practical in its approach and may review the current functional AAP directive and explore ways to encourage employers to utilize that structure where it’s appropriate for that company or more broadly for that industry.”

The accountability office also recommended an industry-specific approach for selecting contractors for audit, expanding on recommendations. The OFCCP is already considering plans to establish two skilled regional centers that would focus on audits in specific industries, such as information technology and finance.

The agency’s ability to bolster industry-specific staff training and expertise to conduct more efficient and effective contractor audits could have a positive impact on diversity in the tech industry, Coukos said.

The contractor watchdog told the GAO that it agreed with the above recommendations and would “fully explore the operational implications and funding requirements.” The agency, which has shrunk its workforce over the past year, faces a potential budget cut moving forward.

Additionally, attorneys and consultants told Bloomberg Law the agency has an opportunity to collaborate with the tech industry outside of the GAO’s specific recommendations. For example, the agency could work with contractors to share best practices pertaining to the outreach and recruitment of women and minorities.

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