Affirmative action plans may seem repetitive, tedious or truly overwhelming, but they’re important because they correct past discrimination and prevent future discrepancies in your workforce. A mandatory requirement for federal contractors in place for over 50 years now, these plans consider characteristics such as race, gender and disability when viewing equality in the workplace.
Does Your Organization Need An Affirmative Action Plan?
If you do business with the U.S. federal government, you likely fall in the “yes” category. In fact, one-fifth of the U.S. workforce is employed by companies that do business with the federal government (U.S. Dept of Labor).
Your organization needs an affirmative action plan if:
You have at least 50 employees and you conduct at least $50,000 of government business in a one-year period.
This category includes:
- Contractors who supply goods or services to any federal government body,
- Financial institutions that cash or sell U.S. savings bonds or have deposit accounts for federal funds, or
- Subcontractors who supply components to other businesses with federal contracts. For example, manufacturers of engine parts for makers of vehicles purchased by the Department of Defense.
If you meet any of these requirements, your organization must have an affirmative action plan in place.
And this plan isn’t a one-and-done chore — you must complete an action plan every year to prove that your organization meets the federal requirements.
Not sure if your plan meets all necessary requirements? Contact me for a free consultation.
What Does An Affirmative Action Plan Look Like?
Affirmative action plans correct past and future discrimination in the workforce, but they don’t exist in a bubble. This isn’t about having equal ratios of all characteristics within your workplace. The plan itself must also consider external factors that provide context for your organization.
Your workforce should:
- Reflect the demographic statistics of the areas you operate in, and
- Recognize past discrimination which has created an imbalance, and seek to correct it.
For example, past discrimination against women may have led to a male-dominated industry, which then leads to more women being hired in that industry.
To complete an affirmative action plan, there are eight technical analyses your organization must perform. This requires considering different data points, like compensation or census data.
The results will highlight where there are discrepancies and your organization must then use these results to take corrective action. Your affirmative action plan would incorporate your findings and your intended corrections — then you need management buy-in to ensure there is follow through.
For example, if you discover your workforce is male-dominated, you would need to highlight this discrepancy and then address how you plan to correct it in your affirmative action plan. But the most important step is that these corrections are actually put in place.
Improving recruitment practices is also a key part of your plan. The federal government encourages recruitment in underrepresented groups found in your data — ensuring your workforce mirrors the local population as closely as possible. Some organizations complete this exercise, even though they’re not obligated to, because it’s useful data. Knowing the gaps in your workforce and how to improve diversity is crucial for today’s employees.
Failure To Comply Can Lead To Disastrous Consequences
Any organization required to complete an affirmative action plan can be audited — unfortunately, we have no control over who’s chosen. The federal government performs audits every year and they randomly select a number of organizations to assess from the pool of applicable entities.
If your organization does get audited, the federal government will ask to see your affirmative action plan and review it. If there are any issues, or more information is required, you may be audited on-site and you are legally required to comply.
There are four potential outcomes for organizations that get audited:
- You pass, and are not required to take any further action (and with a well-thought-out affirmative action plan, this is 100% possible — just ask every single one of my clients).
- Problems are uncovered and a caution is issued, along with an appropriate time period to fix the problems.
- If the problems uncovered have been consistent, or are bad enough, your organization may receive a citation, which includes a financial penalty for failing the audit. Depending on your organization’s size and the extent of the problems, the penalty can range from a few thousand dollars to hundreds of thousands of dollars.
- The worst possible outcome is your organization failing the audit repeatedly. In this situation, you’re not complying with good faith efforts to hire a diverse group of people. The federal government can decide to disbar you from working and this is a permanent decision. Not only does it result in you losing an existing government contract, but it also means you cannot work with the government again — period.
So with such heavy penalties and potentially devastating outcomes, it pays to:
- Invest in the right resources and people to complete your affirmative action plan, and
- Get management buy-in to ensure all necessary corrections are put in place.
Streamline Your Affirmative Action Plan Like This…
Whether you’re new to contracting with the government, or you’ve been working together for quite some time, this process can be overwhelming, tedious, frustrating or downright mundane.
Not having the right in-house resources to analyze, plan and create an appropriate plan can feel daunting — not to mention the time and expense required to train internal HR staff for this once-a-year requirement.
Let’s face it — your team’s time, energy and resources are better spent elsewhere.
Which is why I work my magic on behalf of organizations like yours.
From performing statistical analyses and writing up affirmative action plans to managing audits and ensuring you’re compliant, I act as an extension of your HR team for as long as you need.
So stop worrying about where to start, what to include, or what order steps need to be completed in.
Instead, rely on my 20+ years of affirmative action expertise so you can focus on keeping your organization running smoothly — without the headache. I’ve worked with clients in construction, manufacturing, not-for-profit, banking and so many more. Therefore, I can act on your behalf one-off, or on a multi-year contract, regardless of industry.
Contact me for a free consultation to see how I could help your organization stay compliant.