Diversity Hiring Glossary and Compliance Guide

EEO Reporting (Equal Employment Opportunity Component 1)

The Equal Employment Opportunity (EEO) Component 1 report is a mandatory annual compilation of demographics that requires all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria, to collect and report workforce data.

What hiring data do I need to collect?

Component 1 requires employers to collect and record data on the following characteristics of workers:

• ​Race/ethnicity
• ​Gender
• ​Job category

A sample copy of the EEO-1 form and instructions can be found at the EEOC website.

What is the U.S. Equal Employment Opportunity Commission (EEOC)?

Employers are prohibited by law from discriminating against job applicants and employees on the basis of race, color, religion, sex (including sexual orientation, pregnancy, gender identity), age (40 or older), disability, national origin or genetic information. The U.S. Equal Employment Opportunity Commission (EEOC) enforces federal anti-discrimination laws in the workplace.

What is the OFCCP?

The Office of Federal Contract Compliance Programs (OFCCP) protects workers and promotes diversity by enforcing the law.

What is OFCCP reporting?

The OFCCP requires federal contractors to report the same employee EEO data as private employers.

OFCCP holds those who do business with the federal government (contractors and subcontractors) responsible for complying with the legal requirement to take affirmative action and not discriminate on the basis of race, color, sex, sexual orientation, gender identity, religion, national origin, disability, or status as a protected veteran. In addition, contractors and subcontractors are prohibited from discharging or otherwise discriminating against applicants or employees who inquire about, discuss or disclose their compensation or that of others, subject to certain limitations.

Is the OFCCP the same as the EEOC?

The Office of Federal Contract Compliance Programs (OFCCP) and the Equal Employment Opportunity Commission (EEOC) are two federal agencies that fight discrimination in the workplace. However, the OFCCP enforces non-discrimination for business contractors and sub-contractors who obtain government contracts, while the EEOC responds to any workplace-related discrimination (or alleged discrimination). Both agencies have the authority to file lawsuits against violating employers, contractors and sub-contractors.

How do I identify an employee’s race and/or ethnicity for EEO reporting?

The Equal Employment Opportunity Commission requires employers to gather race and ethnic information on their employees. To comply with this regulation, you should ask all applicants to self-identify demographic information during the hiring process, and then provide them with another opportunity to do so after they are hired.

The EEOC recommends the following methods for ethnic and racial self-identification:

1. 1.Offer employees the opportunity to self-identify
2. 2.Provide a statement about the voluntary nature of this inquiry for employees

EEO Compliance and Recruiting Guidelines

For recruiters and business owners, compliance means more than tracking and reporting demographic information on workers after hire. Employers must also comply with EEO applicant tracking rules for applicants not hired. For example, if a candidate was given a phone screening interview, interviewed but not offered a position, or given an assessment but not selected for hire, the employer must keep records that verify hiring decisions.

Employers must maintain compliance which can be achieved by reviewing job descriptions, applications, applicant identification, interview scorecards, and candidate assessments. Employers should keep applicant data for at least one year after the application period has ended.

When and How to Report Candidate Information

Employers must file EEO-1 reports annually. However, when it comes to candidates who are not hired, you do not need to submit data for such applicants. The information will be useful in the event a rejected candidate files a discrimination claim against your organization. In this case, comprehensive documentation about your hiring process and the rationale for hiring decision will help verify if your process was fair and non-discriminatory. Applications, filtering questionnaires, assessment scores and interview evaluations can provide this evidence.

Tools that can Drive Efficiency for EEO and OFCCP Compliance

Applicant tracking systems streamline the hiring process from beginning to end, including job descriptions, resume organization and management, filtering questionnaires, interview scripts and candidate scorecards.

Diversity Hiring

Diversity hiring refers to the practice of organizations recruiting individuals from underrepresented groups. Workplace diversity refers to a staff demographic makeup that includes members of underrepresented groups similar in proportion to the society at large. For example, if the general population is 20% black, 52% female, 15% Latino, an organization’s labor force would have a demographic makeup similar to that of the general population.

Hiring bias prevents organizations from achieving workforce diversity. Companies that do more than pay lip service to diversity identify and eliminate the biases found in their hiring process.

Get Rid of Hiring Bias – 6 Most Common Types

These are categorized as cognitive biases. A cognitive bias is a flaw in judgment.

1. The Halo Effect

Once we have a positive opinion of someone, it can be difficult to change our mind. The halo effect refers to the phenomenon whereby a person’s positive qualities are perceived to extend beyond his or her actual accomplishments.

2. Expectation Bias

A recruiter might look at dozens of resumes and form an impression based on a candidate’s qualifications, without ever meeting the person in question. This can lead to the halo effect—an exaggerated sense of someone’s abilities, due to a positive first impression. The recruiter may be more likely to overlook obvious flaws.

3. Confirmation Bias

Confirmation bias is the tendency to seek out information that validates one’s own opinion. As a hiring bias, it’s the tendency to focus only on the aspects of a candidate that coincide with your pre-established opinion.

4. Anchoring Bias

The hiring bias known as anchoring occurs when a hiring manager fixates on one piece of information and gives it more weight than it deserves.

5. Social Comparison Bias

Managers hiring for their own team are especially prone to the social comparison bias, which is a tendency to dislike or feel competitive with others who may have similar skills.

6. Ingroup Bias

Ingroup bias is the tendency to favor people who are similar to oneself. In other words, it is favoritism based on group membership. This can be seen in biases against women or minorities, but there are also less obvious examples of ingroup bias. For example, some hiring managers might look more favorably on fellow alumni.

An applicant tracking system (ATS) can be used in many ways to reduce bias. For example, an ATS can hide aspects of a candidate’s profile that you don’t want to consider. Also, you can use an ATS to manage gender- and ethnically-neutral job descriptions. Plus, you can decrease the shared information bias when everyone keeps notes in a central location. Lastly, tracking all candidates and hires in a centralized location makes it easier to track diversity metrics.

Improving Your Organization’s Diversity – An 8 Step Program

After you have identified the types of hiring bias present in your organization, it is time to create an action plan for how to reduce and hopefully eliminate them.

1. Set Goals that can be Measured

Examine your company’s current demographics, and create short- and long-term goals to achieve parity.

2. Incorporate Employee Resource Groups

Use employee resource groups (ERGs) during interviews to make diverse candidates feel more comfortable. If you do not currently have ERGs, encourage your staff to create them and support them in the effort.

3. Blind Resume Assessment

Studies show that resumes with white-sounding names receive more callbacks or interviews than those that seem non-white, so many candidates ‘whiten’ their names and backgrounds. You can use an ATS to remove names and hide demographic information.

4. Diversify Your Hiring Team

Do the members of your hiring team represent the diversity of your applicant pool? If minority candidates have several job openings to choose from, the makeup of the interview team could be a factor in their decision.

5. Train Employees on Hiring Bias

In order to increase workforce diversity, employees must be aware of unconscious bias and how it can negatively affect the workplace. You can create your own internal training program, hire a consultant, or use online resources like Google’s unconscious bias training.

6. How to Write Compelling Job Ads with the Right Requirements

Make sure your job descriptions are free of gender-specific language. You can always use the job title in place of any pronoun.

Just as important as giving your job descriptions a makeover, consider your job requirements. If ‘corporate culture match’ is a hiring criterion, remove it. This is an easy place for unconscious bias to creep in, and will hinder your efforts to increase workforce diversity. Furthermore, if you have a homogenous workforce, you don’t want to use it as a measuring stick anyway.

7. Use Structured Interviewing

Rewrite interview scripts to remove bias, and train your interviewers to use them correctly by following EEOC guidelines. Manage your structured interviewing scripts in your ATS.

8. Ask Employees for Diverse Referrals

In addition to revamping recruitment communications, use your employee referral program. Encourage employees to refer qualified applicants from underrepresented groups.

WOTC

The Work Opportunity Tax Credit (WOTC) rewards businesses that hire individuals from certain target groups. These are people who experience barriers to employment, so by incentivizing businesses to hire them, both the business and the individual benefit. The tax credit allowance varies depending on the target group and number of hours worked, but could be as much as $9,600 per eligible employee. There is no limit to the number of eligible employees that employers can claim.

Who Qualifies for the Work Opportunity Tax Credit?

Businesses that hire new employees in certain target groups may qualify for a Work Opportunity Tax Credit (WOTC), a federal incentive program for employers who hire workers with barriers to employment. The program is administered jointly by the US Treasury Department and US Department of Labor.

Employees who belong to these groups may qualify:

• ​TANF recipients
• ​Veterans
• ​Ex-Felons
• ​SNAP recipients
• ​SSI recipients
• ​Long-term unemployment recipient
• ​Designated community and empowerment zone residents
• ​Vocational rehabilitation referral

Businesses may claim a tax credit of as much as $9,600 for each new hire that is certified as WOTC-eligible and works the required minimum hours or days for their group. The credit is calculated as a percentage of wages paid.

Can a business file for WOTC for current employees?

No. This program is available only to new hires.

What deadlines must be met to qualify for WOTC?

1. 1.The new hire must be informed about the program no later than their start date.
2. 2.Within 28 days of their start, all paperwork and supporting documentation must be submitted.

How is the tax credit calculated?

The tax credit calculation is calculated based on several factors, including the specific target group and total hours worked.

Do employers have to participate in WOTC?

The program is optional, but it provides a financial incentive for employers.

Do employees have to participate in WOTC?

No, the program is optional for employees, but it benefits them because it increases their value to potential employers.

How do I gather WOTC information from new employees?

Employers can build the Work Opportunity Tax Credit (WOTC) into their onboarding process. The employee must be told about the WOTC program when or before being hired. If the employee might qualify, then employers need to gather the details needed for a claim. Automated employee onboarding makes this process easy by guiding new hires through a series of questions that determine qualification and gather the necessary details. This process must be complete within the first 28 days of employment.