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Affirmative Action Plan Components

Annette Alvarado

Affirmative Action Plans (AAPs) have many components and intricacies. We break down AAPs section by section.

Affirmative Action Plans (AAPs) have many components and intricacies. As a whole, AAPs can seem daunting and very confusing. It’s best to break it down section by section, report by report, and really understand each piece separately. Hopefully, by understanding each individual report, you can better comprehend the plan in full.

There are essentially three separate AAPs.

  1. Executive Order 11246: Women and Minorities
  2. Vietnam Era Veteran Readjustment Assistance Act (VEVRAA)
  3. Section 503 of the Rehabilitation Act: Individuals with Disabilities (IWD).

Each plan consists of a narrative portion followed by statistical reports. Let’s dive into the sections of the AAP beginning with the Women and Minorities plan.

Women and Minorities

Narrative

The first component of the Women and Minorities plan is the narrative, which reflects the policies and procedures necessary for the implementation of the plan. Outlined below are the language sections which reference what is stated in the EO 11246 regulations and noted by citation number.

  • Reaffirming Commitment to Equal Employment Opportunity
  • Internal Dissemination of EEO Policy - 41 C.F.R. § 60-1.42
  • External Dissemination of EEO Policy - 41 C.F.R. § 60-1.41; 41 C.F.R. § 60-1.5
  • Establishment of Responsibility for Implementation of the AAP - 41 C.F.R. § 60-2.17(a)
  • Identification of Areas for Discussion - 41 C.F.R. § 60-2.17(b)
  • Narrative Discussion of Goals
  • Development & Execution of Action-Oriented Programs - 41 C.F.R. § 60-2.17(c)
  • Internal Audit and Reporting System - 41 C.F.R. § 60-2.17(d)
  • Guidelines for Prevention of Sex Discrimination - 41 C.F.R. § 60-20.1 et seq.
  • Policy with Respect to Religion or National Origin

The EEO policy conveys the company’s commitment to equal employment opportunity and affirmative action. The policy shows top executive support of their AAPs and should be posted on all bulletin boards visible to employees and applicants. As a best practice and to further demonstrate commitment from the top, the EEO policy can be signed by the CEO or President of the company. The dissemination of the EEO policy is the company’s plan to assure that equal employment opportunity and affirmative action are correctly communicated throughout the organization. This portion of the narrative is broken down into internal and external dissemination in order to outline exactly what the company intends to do internally versus externally to provide for a diverse workforce.

Another key piece of the EO 11246 narrative is the establishment of responsibility for implementation of the AAP. The Top official designates an individual as EEO Administrator to ensure effective execution of the AAP. In doing so, a list of the EEO Administrator’s responsibilities is outlined in this section of the narrative.

The identification of areas for discussion points out the areas of the AAP that need improvement. After all, this is a plan of action, which means one must be taking action and attempting to remedy any issues. This can only be accomplished after the statistical analyses have been done and a meticulous review of the employment process is complete. Once the problem areas have been identified, the company will indicate the actions to be taken to remedy those problems. The development and execution of action-oriented programs are outlined (41 C.F.R. § 60-2.17(c)) in the narrative to help achieve these specific affirmative action goals.

The internal audit and reporting system (41 C.F.R. § 60-2.17(d)) section of the narrative focuses on measuring the effectiveness of the total AAP. This section relies on processes such as documentation of personnel activities to assist in monitoring progress throughout the plan year. In addition, another aspect to achieve a thorough internal and audit reporting system is to ensure the review goals and problem areas with all levels of management.

One of the final parts of the narrative portion is the guidelines for prevention of sex discrimination (41 C.F.R. § 60-20.1 et seq). Language providing guidance on how to avoid gender discrimination within the organization must be included in the plan. Contractors need to identify policies that encourage and guarantee equal opportunity of its employees and applicants without regard to sex.

Lastly, the narrative concludes with a policy with respect to religion or national origin. This section provides guidelines in prohibiting discrimination on the basis of religion or national origin. This policy seeks to ensure that the company does not discriminate in any employment practices related to various religions and/or ethnic groups.

Statistical Analysis

The statistical component of the AAP determines an available percentage of minorities and women within different job groups of a contractor’s workforce and compares them against the company’s incumbent workforce. The incumbent workforce consists of all employees present at an establishment on the selected plan date. The main components of the statistical analyses are workforce analysis, job group analysis, availability analysis and utilization analysis. The statistical components will follow this simple analysis:

affirmative action plan statistical analysis steps

Workforce Analysis

The Workforce Analysis is a picture of a contractor’s current workforce (as of the plan date) broken out by department. There is no real “analysis” being done in the Workforce Analysis, it is simply a headcount of race and gender within department separated by job title in hierarchal format from lowest to highest paid. Each department is included on a separate page with jobs ranked from lowest to highest paid. Salary grades or wage rates are the best way to list jobs in sequential order within each department. We do not suggest including the actual salary or salary range for each job due to the sensitivity of salary information that could be potentially viewed by employees. Each job should include employee counts with the breakdown by race and gender. It is important to note that a woman is not necessarily counted as a minority. A minority is defined as a man or woman whose race is other than white and ethnicity is non-Hispanic.

An Organizational Display is another, less popular alternative to the Workforce Analysis. It is a detailed chart of the contractor’s organizational structure to include the hierarchal relationship of departments. Each department would include the race/sex counts of the supervisor and employees. Contractors may choose to develop either the Organizational Display or the Workforce Analysis, but not both.

Below is a sample of the Workforce Analysis.

Job Group Analysis

The Job Group Analysis, similar to the Workforce Analysis, is a listing of positions by job groups or EEO-1 categories as opposed to department structure. Job groups are simply subcategories of EEO-1 categories and are defined in 41 CFR § 60-2.12 (b) as “jobs at the establishment having similar content, wage rates and opportunities.” It is vital that job groups are formed correctly because the Job Group Analysis creates the framework needed for the Availability Analysis and Utilization Analysis. The totals derived from the Job Group Analysis will later be compared with availability to determine any underutilized areas.

The number and size of job groups a company has will largely depend on the size and structure of the organization. Smaller companies with a total workforce of less than 150 employees do not need to create job groups and can simply use the EEO-1 categories assigned to the job. The first step in defining job groups is to place jobs into the correct EEO-1 category. These can be defined based off of EEO-1 categories used in the Standard Form 100, Employer Information EEO-1 Survey. Below is a list of definitions for the 10 EEO-1 categories:

1.1 - Executive/Senior Level Officials and Managers - Individuals who plan, direct and formulate policies, set strategy and provide the overall direction of enterprises/organizations for the development and delivery of products and services, within the parameters approved by boards of directors of other governing bodies. Residing in the highest levels of organizations, these executives plan, direct, or coordinate activities with the support of subordinate executives and staff managers. They include, in larger organizations, those individuals within two reporting levels of the CEO, whose responsibilities require frequent interaction with the CEO. Examples of these kinds of managers are: Chief executive officers, chief operating officers, chief financial officers, line of business heads, presidents or executive vice presidents of functional areas or operating groups, chief information officers, chief human resources officers, chief marketing officers, chief legal officers, management directors and managing partners.

1.2 - First/Mid Level Officials and Managers - Individuals who serve as managers, other than those who serve as Executive/Senior Level Officials and Managers, including those who oversee and direct the delivery of products, services or functions at group, regional or divisional levels of organizations. These managers receive directions from Executive/Senior Level management and typically lead major business units. They implement policies, programs and directives of Executive/Senior Level management through subordinate managers and within the parameters set by Executives/Senior Level management. Examples of these kinds of managers are: Vice presidents and directors; group, regional or divisional controllers; treasurers; and human resources, information systems, marketing, and operations managers. The First/Mid Level Officials and Managers subcategory also includes those who report directly to middle managers. These individuals serve at functional, line of business segment or branch levels and are responsible for directing and executing the day-to-day operational objectives of enterprises/organizations, conveying the directions of higher level officials and managers to subordinate personnel and, in some instances, directly supervising the activities of exempt and non-exempt personnel. Examples of these kinds of managers are: First-line managers; team managers; unit managers; operations and production managers; branch managers; administrative services managers; purchasing and transportation managers; storage and distribution managers; call center or customer service managers; technical support managers; and brand or product managers.

2 - Professionals - Most jobs in this category require bachelor and graduate degrees, and/or professional certification. In some instances, comparable experience may establish a person's qualifications. Examples of these kinds of positions include: Accountants and auditors; airplane pilots and flight engineers; architects; artists; chemists; computer programmers; designers; dieticians; editors; engineers; lawyers; librarians; mathematical scientists; natural scientists; registered nurses; physical scientists; physicians and surgeons; social scientists; teachers; and surveyors.

3 - Technicians - Jobs in this category include activities that require applied scientific skills, usually obtained by post-secondary education of varying lengths, depending on the particular occupation, recognizing that in some instances additional training, certification, or comparable experience is required. Examples of these types of positions include: Drafters; emergency medical technicians; chemical technicians; and broadcast and sound engineering technicians.

4 - Sales Workers - These jobs include non-managerial activities that wholly and primarily involve direct sales. Examples of these types of positions include: Advertising sales agents; insurance sales agents; real estate brokers and sales agents; wholesale sales representatives; securities, commodities, and financial services sales agents; telemarketers; demonstrators; retail salespersons; counter and rental clerks; and cashiers.

5 - Administrative Support Workers (formerly Office and Clerical) - These jobs involve non-managerial tasks providing administrative and support assistance, primarily in office settings. Examples of these types of positions include: Office and administrative support workers; bookkeeping, accounting and auditing clerks; cargo and freight agents; dispatchers; couriers; data entry keyers; computer operators; shipping, receiving and traffic clerks; word processors and typists; proofreaders; desktop publishers; and general office clerks.

6 - Craft Workers (formerly Craft Workers (Skilled)) - Most jobs in this category include higher skilled occupations in construction (building trades craft workers and their formal apprentices) and natural resource extraction workers. Examples of these types of positions include: Boilermakers; brick and stone masons; carpenters; electricians; painters (both construction and maintenance); glaziers; pipelayers, plumbers, pipefitters and steamfitters; plasterers; roofers; elevator installers; earth drillers; derrick operations; oil and gas rotary drill operators; and blasters and explosive workers. This category includes occupations related to the installation, maintenance and part replacement of equipment, machines and tools, such as: Automotive mechanics; aircraft mechanics; and electric and electronic equipment repairers. This category also includes some production occupations that are distinguished by the high degree of skill and precision required to perform them, based on clearly defined task specifications, such as: millwrights; etchers and engravers; tool and die makers; and pattern makers.

7 - Operatives (formerly Operatives (Semi-skilled)) - Most jobs in this category include intermediate skilled occupations and include workers who operate machines or factor-related processing equipment. Most of these occupations do not usually require more than several months of training. Examples include: Textile machine operators; laundry and dry cleaning workers; photographic process workers; weaving machine operators; electrical and electronic equipment assemblers; semiconductor processors; testers, graders and sorters; bakers; and butchers and other meat, poultry and fish processing workers. This category also includes occupations of generally intermediate skill levels that are concerned with operating and controlling equipment to facilitate the movement of people or materials, such as: Bridge and lock tenders; truck, bus or taxi drivers; industrial truck and tractor (forklift) operators; parking lot attendants; sailors; conveyor operations; and hand packers and packagers.

8 - Laborers and Helpers (formerly Laborers (Unskilled)) - Jobs in this category include workers with more limited skills who require only brief training to perform tasks that require little or no independent judgment. Examples include: Production and construction worker helpers; vehicle and equipment cleaners; laborers; freight, stock and material movers; service station attendants; construction laborers; refuse and recyclable materials collectors; septic tank servicers; and sewer pipe cleaners.

9 - Service Workers - Jobs in this category include food service, cleaning service, personal service, and protective service activities. Skill may be acquired through formal training, job-related training or direct experience. Examples of food service positions include: Cooks; bartenders; and other food service workers. Examples of personal service positions include: Medical assistants and other healthcare support occupations; hairdressers; ushers; and transportation attendants. Examples of cleaning service positions include: cleaners; janitors; and porters. Examples of protective service positions include: Transit and railroad police and fire fighters; guards; private detectives and investigators.

Once all positions are assigned to one of the EEO-1 categories, you can start to break out positions within each of the EEO-1 categories. Again, job groups should consist of jobs within an EEO-1 category having similar content, wage rates, and opportunities.

Keep in mind that the development of job groups is company specific and that there is no set standard. Below are some of OutSolve’s best practices for creating job groups:

  • Don’t split EEO codes containing small numbers of employees. Don’t form groups containing less than 10-15 employees. OFCCP often frowns on small groups because they are of little statistical significance.

  • Split very large groups. If you see an EEO code with a significant number of jobs and employees contained in it you may wish to split it into smaller groups that are more similarly situated for the purpose of creating more meaningful availability comparisons. Situations do exist when a very large group is acceptable. For instance, you may have 200 Customer Service Representatives. Since they are all in the same job making approximately the same amount of money, there is no need to split them.

  • Look at either levels or functions within an EEO classification. Large EEO codes can be broken into smaller job groups in two ways. Breaking these EEO codes by level means that there is a significant difference in salary and responsibility within the code. You can split the management group into lower, middle, and senior management if indeed there are a sufficient number of employees to reasonably expect a division. Another way to subdivide EEO codes is by function. Your professional group may need to be split. A good way to do this may be by level as described above. Another suggestion would be to split all the technical professionals from the administrative professionals. By doing this you are keeping together jobs with like responsibility.

  • Use symmetry where possible. If you have broken out three levels of management (lower, middle, and senior), you may want to break professionals out the same way so that it is easier to determine promotional patterns in determining availability. Remember that lower likely promotes to middle, which eventually promotes to senior.

Below is a sample of the Job Group Analysis:

Availability Analysis

The Availability Analysis depicts what a company should have in their workforce by estimating the percentage of minorities and women available for employment in a given job group. There are two factors involved in determining availability of minorities and women.

  1. External availability is the percent of minorities and women with requisite skills in the Reasonable Recruitment Area (RRA). The RRA is defined as the geographical area from which the contractor usually seeks or reasonably could seek workers to fill the position (41 C.F.R. § 60-2.14(c)). In most cases, the U.S. Census Bureau statistics would provide for the necessary data in determining external availability. The statistics pulled from the US Census provides census occupations by race, ethnicity, and sex composition and is broken out by residence geography. These statistics alone would suffice, however in addition to this contractors may also derive from other statistical information available such as data from colleges or training institutions, if applicable. The contractor may not draw its RRA in such as way as to exclude minorities or women.

  2. Internal availability, meaning those available (promotable, transferable, trainable) for future openings within the contractor’s organization. When determining internal availability a contractor should consider the job groups or jobs, also known as feeder groups, which could reasonably “feed” or promote into the job group in question.

The second step in determining availability is to weight the two factors described above. There is no one way of doing this. Some companies rely on historical data for a calculated, more finite figure. By doing so, a period of activity data (hires and promotions) is obtained in order to determine the weighted ratio between internal and external recruiting. This method is very specific and does not account for changing business conditions. Another way of assessing weights is by making reasonable assumptions based on past practices. This approach simply answers the question, “Where do people in this group come from?” and weights are assigned based on the reasonable consideration of the relevant factors.

Below is a sample the Availability Analysis:

availability analysis sample

Utilization Analysis

The utilization analysis is the key component and final result of an AAP. It is essentially the summary of the AAP and compares a company’s employment to its availability to indicate specifically which job groups have a placement goal. In this analysis the percentage of minorities and women represented in the job group analysis (what a company has) is compared to the percentage estimated available in the availability analysis (what a company should have). If the company employs at a minimum what is determined available, there is no need to set a goal. However if employment is below availability, further analysis is necessary to determine if there is underutilization. There are many statistical methods used to determine underutilization by comparing employment with availability:

  • Any difference rule
  • Whole person rule
  • 80% rule
  • 2 standard deviations

All placement goals are set to be equal to or greater than availability. These serve as targets reasonably attainable by means of applying good faith efforts. Goals may not be rigid and inflexible quotas and quotas are expressly forbidden (41 C.F.R. § 60-2.16(e)). The contractor must document and take the necessary steps in an attempt to alleviate the goal.

Below is a sample of the Utilization Analysis.

Adverse Impact Analysis

The Adverse Impact Analysis (AIA) is a tool used to measure the statistical relationship between two selected groups. For the AAP, the selected groups are hires versus applicants, terminations versus those available for termination, and promotions versus those available for promotion. The report analyzes these transactions to determine if any race or gender group is adversely affected by a company’s selection decisions. The Impact Ratio Test (IRA), also known as the 80% test is the most widely used test to determine adverse impact at least as an initial indicator of a potential issue. A two-standard deviation test is typically used by OFCCP and contractors as the more definitive, final result.

Adverse impact indicated as ‘Yes’ does not automatically indicate discrimination. When there is adverse impact a contractor must research selections with impact and document findings and resolutions. It is obligatory to research any instance where adverse impact occurs and attempt to remedy or explain the potential problem. In some instances, the reason for adverse impact indicated as ‘Yes’ is due to data discrepancies while in others the statistical gap may be due to legitimate factors such as a validated test. Regardless of the cause readers must know that OFCCP will fully investigate instances of adverse impact found in submitted data.

Typically, the time period used for the Adverse Impact Analysis is the year prior to the current affirmative action plan. Some contractors elect to perform quarterly or semi-annual Adverse Impact Analyses in an attempt to identify problem areas before a full yearly cycle has passed.

adverse impact analysis sample

Progress Toward Goals

The Progress Toward Goals Report provides for a look back at the prior year’s AAP to determine whether or not placement goals were met. The report includes the job representation in the prior year’s AAP, the job representation in the current AAP and acknowledges the progress toward the goals. The proper execution of this report involves listing all job groups; highlighting the goals; measuring the opportunities, and listing the incumbency at the end of the period to determine if, in fact, progress was made. Opportunities are defined by the OFCCP as hires plus promotions into the job group.

Below is a sample of the Progress Toward Goals Report.

The Vietnam Era Veteran Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act Individuals with Disabilities

Narrative

Similar to the Women and Minorities AAP, the Protected Veteran (VEVRAA) and Individual with Disabilities (IWD) AAPs begin with a narrative portion that reflects the policies and procedures necessary for the implementation of the plan. The key points of the narrative are listed below.

VEVRAA & IWD narrative components:

  • Equal Employment Opportunity Policy Statement
  • Review of Personnel Processes
  • Physical and Mental Job Qualifications
  • Reasonable Accommodation
  • Anti-Harassment Procedures
  • External Dissemination of Policy, Outreach, and Positive Recruitment
  • Internal Dissemination of Policy
  • Audit and Reporting System
  • Responsibility for Implementation of the Plan
  • Affirmative Action Training

The narrative portions of these sections are explained in detail in Patrick Savoy’s recent article covering OFCCP’s sample affirmative action plan and can be viewed here.

Data Collection Analysis

Following the narrative is the Data Collection Analysis, which is derived from sections 41 C.F.R. § 60-300.44(k) and 41 C.F.R. § 60-741.44(k) of the regulations. Contractors must document computations or comparisons for the number of veterans and IWDs who apply for jobs and the number of veterans and IWDs hired on an annual basis and maintain these records for a period of three years. The retention of this data will aid contractors in measuring the efficacy of their outreach and recruitment efforts.

Information to document and maintain:

  • The number of applicants who self-identified as protected veterans or IWDs
  • The total number of job openings and total number of jobs filled;
  • The total number of applicants for all jobs;
  • The number of protected veteran or IWD applicants hired; and
  • The total number of applicants hired.

Below are samples of the Three Year Data Collection for Protected Veterans and IWDs:

Benchmarks for Hiring for Protected Veterans

The Hiring Benchmarks are part of the new regulations, which requires contractors to establish an annual hiring benchmark in order to measure its progress in achieving equal opportunity for protected veterans. Hiring benchmarks are measured in the aggregate and not broken out by job groups. These benchmarks are set on an annual basis and can be determined one of two ways.

The first and easiest option is to adopt the benchmark equal to the national percentage of veterans in the civilian labor force, currently 7.0%. The other option allows for contractors to develop their own benchmark based on the below five required factors. This would require additional statistics and detail on the contractor’s part.

  1. Average of VETS by state over last 3 years from the Bureau of Labor Statistics

  2. Veteran participants in the employment service delivery system from previous four quarters

  3. Contractors’ applicant and hiring ratios for veterans in previous year

  4. Contractor’s recent assessments of the effectiveness of is outreach

  5. Other factors, such as nature and location of contractors’ job openings

Below is a sample of the Protected Veteran Hiring Benchmark.

Utilization Analysis for IWDs

This final piece of the IWD AAP is where contractors compare employment of IWDs to the nationwide utilization goal of 7% to each of their job groups (or to their entire workforce if the contractor has 100 or fewer employees). Contractors must establish specific action-oriented programs to address any identified problems (i.e. modification of personnel processes to ensure equal employment opportunity, alternative or additional outreach and recruitment efforts, and/or other actions designed to correct the identified problem areas and attain the established goal).

Below is a sample Utilization Analysis for IWDs.

We have covered a lot material here discussing in detail each of the Affirmative Action Plan Components that make-up the three affirmative action plans (Minorities & Women/VEVRAA/IWD). AAP development is certain to overwhelm contractors particularly in light of the new regulations and requirements. And although there are a number of ways that a contractor may choose to develop and format their affirmative action reports, the above overview of each of the AAP components and sample reports should provide some insight to those needing guidance.

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