Importance of Candidate Dispositioning: Post-EO 11246

With the recent rescission of Executive Order (EO) 11246, many employers, especially federal contractors, are reevaluating their approach to compliance. However, while EO 11246 is no longer in effect, compliance obligations remain under both Title VII of the Civil Rights Act and the Uniform Guidelines on Employee Selection Procedures.  

These regulations prohibit employment practices that result in discrimination based on race, color, sex, or other protected characteristics, requiring all employers (not just federal contractors) to ensure their hiring and selection processes do not create adverse impact.   

In the workplace, adverse impact is defined as the result of an employer’s practice or policy that appears to be neutral but has a discriminatory effect on protected groups such as minorities, females, and older employees. This can be any employment process including recruiting, hiring, promotion, training and development opportunities, pay, job transfers, performance reviews, layoffs, company policies and procedures, etc.  

One key area often overlooked in this compliance equation is candidate dispositioning, which is the process of categorizing and documenting why candidates or job seekers were not selected for a position. Accurate dispositioning is more than just an administrative step; it's a critical component in mitigating risk, demonstrating compliance, and defending against claims of hiring discrimination.  

 

Why Dispositioning Matters  

A thorough candidate dispositioning process ensures that employers can clearly articulate and document why a candidate was not selected. This is essential for several reasons:  

• Defensibility in EEOC Investigations: The Equal Employment Opportunity Commission (EEOC) routinely requests disposition data and supporting documentation when investigating hiring discrimination claims. Without accurate, detailed disposition reasons, employers may struggle to defend their hiring decisions.  

• Proactive Adverse Impact Analysis: The Uniform Guidelines make it clear that any selection procedure with an adverse impact on protected groups is considered discriminatory. Employers, particularly federal contractors, must conduct proactive analyses to assess whether their hiring processes result in adverse impact and, if so, take corrective action.  

• Federal Contractor Certification Requirements: Under EO 14173, federal contractors may be required to certify their compliance with non-discrimination laws, further emphasizing the need for well-documented selection practices.  

• Improving Hiring Transparency: Beyond compliance, strong candidate disposition practices contribute to better recruitment strategies – including determining if there is a true ROI from using sometimes costly job boards, helping employers refine their selection processes, enhance candidate communication, and promote fair hiring.  

By ensuring that candidate disposition is accurately documented and that the reasons for non-selection are clearly articulated, companies can demonstrate their commitment to fair and transparent hiring practices. This practice also helps mitigate the risk of legal challenges and protects organizations from potential violations of the Uniform Guidelines and Title VII of the Civil Rights Act.  

Common Pitfalls in Candidate Dispositioning  

Through decades of working with federal contractors, we’ve observed that even organizations with rigorous compliance programs often struggle with dispositioning. Common mistakes include:  

• Vague or Generic Reasons: Many applicant tracking systems provide default disposition reasons such as "rejected" or "not selected," which offer no insight into why the decision was made. Employers should carefully review the disposition reasons provided, making edits or additions as needed to ensure they are specific in detail, are applicable to your organization as well as are defensible for each instance of application. We recommend assigning static disposition codes pertinent to each step in the hiring process. This will ensure consistency in dispositioning. 

• Bulk Dispositioning: Many applicant tracking systems allow for bulk dispositioning. Unless candidates have not been reviewed or considered for a position at all, each candidate should be dispositioned independently. Bulk dispositioning can increase liability through incorrectly dispositioning candidates in large batches. 

• Lack of Standardization: Some companies create their own disposition status codes without a structured approach, leading to inconsistencies in usage and potential compliance risks.  

• Failure to Document Selection Decisions: Employers who rely solely on interview notes or informal discussions without tying them to a disposition reason may find themselves unprepared in the event of an EEOC audit. This lack of documentation can significantly hinder the ability to defend hiring decisions.  Additionally, interview notes may also include verbiage that is discoverable in an EEOC investigations and can lead to indefensible language. 

These issues can undermine the effectiveness of dispositioning job candidates, making it more difficult for employers to prove that their hiring practices comply with nondiscrimination regulations. To be compliant, it’s essential to implement a consistent, detailed, and well-documented dispositioning process.  

Best Practices for Effective Dispositioning  

To strengthen candidate dispositioning practices, employers should consider the following steps:  

• Establish Clear and Specific Disposition Codes: Instead of generic terms such as "not a fit," use codes that reflect the actual reason for non-selection.  For example: 

• • "Lacked required certification" 

• • "Did not meet minimum requirements – education" 

• • “Did not meet minimum requirements – experience"
• Ensure Consistency Across Recruiters and Hiring Managers: Provide training on dispositioning candidates to ensure that hiring teams apply codes uniformly and accurately. A well-structured and standardized process prevents confusion and promotes consistency in practice across the recruitment team. We recommend conducting this training as part of onboarding for new recruiters and hiring managers, as well as annually to all individuals involved in the hiring process. 

• Regularly Review and Audit Disposition Data: Conduct periodic audits to identify patterns that may indicate potential bias or adverse impact in the hiring process. Reviewing disposition data for trends in rejected candidates can assist in identifying unintentional discrimination and can create the opportunity to proactively make adjustments as needed to keep hiring practices equitable. The audit can focus on dispositioning by recruiter, requisition, hiring manager, or by the disposition reason itself.  
• Align Dispositioning with Adverse Impact Analysis: Use dispositioning data to support proactive adverse impact analyses, to confirm that hiring practices remain compliant with the Uniform Guidelines. This analysis should include an examination of whether any specific protected group is disproportionately impacted by the selection process. If adverse impact is identified, employers should conduct a thorough review and analysis of each step of the selection process. Note: consult with legal counsel prior to running your analyses to determine if it should be conducted under privilege.  
• Candidate Communication Needs to be Clear and Respectful: Not only does candidate dispositioning support compliance, but it also improves the candidate experience. Providing clear and respectful feedback helps candidates understand the reason for their non-selection, which can reduce confusion and dissatisfaction. This transparent approach also reinforces the employer's commitment to fairness. Finally, it provides candidates with constructive and meaningful feedback that they can use for their own professional development.  
• Leverage Technology for Efficiency and Accuracy: Many modern applicant tracking systems (ATS) offer tools to track and categorize disposition data automatically. Implementing an effective ATS that works for your business and integrates dispositioning codes with other aspects of the recruitment process can streamline documentation and reduce the risk of errors.  

Benefits of Proper Dispositioning 

Companies should not underestimate the significance of developing, clearly documenting and categorizing candidate disposition reasons. For federal contractors and non-contractors alike, candidate dispositioning is not just a compliance requirement, it is a best practice that: 

• Strengthens hiring processes 

• Reduces legal risk 

• Enhances transparency 

With EO 11246 rescinded, federal contractors must continue to prioritize fair hiring practices under the Uniform Guidelines and Title VII. It’s critical to maintain a focus on candidate disposition reasons that are consistent, specific, and defensible.  

A well-implemented candidate disposition process supports a company’s strategic goals. By ensuring that hiring decisions are made based on job-relevant criteria and are thoroughly documented, organizations can cultivate a more diverse, equitable, and inclusive workforce. This can enhance employee satisfaction and engagement, increase retention rates, and improve overall business performance.  

What Candidate Dispositioning Means for Your Organization  

As the regulatory environment continues to evolve, and with increasing attention on diversity, equity, and inclusion (DEI) initiatives, effective candidate dispositioning practices are the foundation for demonstrating a company’s commitment to fair treatment and transparency in hiring. An overview of a strong, fair, and defensible hiring process includes:  

• Implementing specific, consistent, and standardized candidate disposition reasons  

• Regularly auditing disposition data for potential bias or adverse impact.  

• Aligning dispositioning practices with proactive adverse impact analysis to ensure equitable hiring practices.  

• Cultivating and maintaining a culture of transparency and communication to enhance candidate experience and to strengthen the employer’s brand.  

OutSolve works closely with organizations to improve their dispositioning practices, conduct adverse impact analyses, and ensure compliance with new and changing regulations.  

Whether your organization is a federal contractor subject to certification requirements or a private employer looking to mitigate risk under the Uniform Guidelines, our team of compliance experts can help refine your hiring processes and safeguard against discrimination claims. We’re here to help you with this common challenge, which is becoming more important as HR compliance regulations change. 

Beth Montgomery

Prior to joining OutSolve as a Senior Consultant, Beth was a Director of Affirmative Action for a Fortune 300 federal contractor where she managed an affirmative action program for 100,000+ employees and successfully coordinated hundreds of OFCCP audits. Beth combines her experience as a hands-on federal contractor with her knowledge of regulatory requirements to provide support to her clients in designing and monitoring their affirmative action programs. Beth is a graduate of the University of Louisville and has over 25 years of affirmative action planning and OFCCP compliance experience. Expertise: Comprehensive knowledge of Executive Order 11246, Section 503 and VEVRAA, OFCCP compliance evaluations, training, healthcare industry, mock audits.