Audit for Systemic Hiring Biases Before U.S. Agencies Do

By Theresa Minton-Eversole May 6, 2008

For many years the U.S. Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) didn’t pay much attention to applicant tracking data, nor was that data a focus during discrimination investigations.

But things have changed, according to Mickey Silberman, senior member of law firm Jackson Lewis’s affirmative action and diversity practice group. In recent years, both agencies have reinvented their compliance auditing processes to focus on rooting out potential adverse impact, or systemic discrimination, associated with employers’ hiring practices. They are, Silberman says, “intently focused on applicant tracking processes, obtaining that information to determine whether minorities and females who apply for jobs are disproportionately negatively rejected for [a company’s] jobs.

“The rules have fundamentally changed, and if [employers] respond the way [they] did two years ago, [they’ll] very likely be looking at a very painful systemic investigation by the EEOC,” said Silberman during a recent Society for Human Resource Management webcast titled “Applicant Tracking, Systemic Discrimination and the New, Improved EEOC and OFCCP.”

Several factors serve to make applicant tracking a more convoluted process for employers than it was in the past, including increases in use of online, automated applicant tracking systems and applicant flow logs, increases in the use of pre-employment tests and reliance on third-party vendors that handle various aspects of the recruitment process, such as drug screens and background checks.

“Tracking applicant flow is not an end in itself,” Silberman said. “It’s a means to an end. The effect of these developing technologies is that employers now can quickly and easily analyze large amounts of data to determine who is most qualified for employment openings.”

But the EEOC, OFCCP and private plaintiffs’ attorneys also can analyze this data, he added, noting that unsuspecting employers often design these sophisticated electronic applicant tracking processes without regard to potential legal consequences.

Pre-employment tests also can often be a trap for the unwary, Silberman said. Typically these are “off-the-shelf” tests purchased from a third party, and it is often difficult to show that the test is truly predictive of success in a specific job.

To Beat ’Em, Join ’Em

Silberman said employers should follow the EEOC’s and the OFCCP’s lead and conduct their own internal “vulnerability audits” to identify potential problems with systemic discrimination before being subjected to an investigation by the federal agencies. The audit should review the following:

  • Company’s definition of “applicant” and what electronic methods the employer and its third-party vendors use to track data.
  • Compliance with the OFCCP’s Internet applicant rule.

“Very often employers have overly broad definitions of what constitutes an applicant, but the Internet applicant rule provides tremendous opportunity for employers to fashion a definition that limits the flow of candidates into the applicant tracking process,” Silberman said. “If you can define applicant in such a way that legitimately narrows the [applicant] pool, that by itself will in many instances take away the statistical ‘red flag’ that the OFCCP and the EEOC would check.”

  • Validity and defensibility of pre-employment tests, structured interviews and other selection tools.

“When was the last time you did a validity study on your pre-employment tests? Employers that use pre-employment tests need to inventory tests, as many of them are not legally defensible. When you change the nature of a job, the [associated] tests have to change with it. If the date of your last validity study is earlier than the last time you made any modifications to the job, you’ve got a bulls-eye on your back because you’re using a test that’s testing for skill sets and job responsibilities for a job that no longer exists. And if that test has an adverse effect on minorities or females, and it no longer tests for the [current] job, it’s no longer a job-related test and that’s all the government needs to prove discrimination.”

  • Data the employer is tracking to identify the “fallout” selection stage for each applicant and the specific reason why each applicant fell out of the process.

“Make sure your third-party vendors are completely aware of your EEOC obligations and that you expect them to abide by them. Monitor and periodically audit third-party vendors, asking for data that they are collecting. Don’t put your head in the sand and assume that because your company isn’t making the selections, handling the screens or administering the tests that it won’t come back to haunt you. It will. Communicate with your vendors to ensure you’re not the one left on the hook because of illegal actions on their part.”

Finally, Silberman said to “cloak” the vulnerability audit under attorney-client privilege.

“Applicant tracking should be a robust, strategic [tool] that allows employers to drill into their hiring process to see when people fall out [and] the reason why they fall out and to categorize what stages in the hiring process that they do fall out. But the last thing you want to do is have a document hanging out there that a plaintiff’s attorney can then demand in the next lawsuit against you when they have a failure to hire discrimination claim.”

Theresa Minton-Eversole is manager of the SHRM Online Staffing Management Focus Area.


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