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EEO-1 Component 2 Reporting Deadline (CLICK FOR HELP): EXPIRED

The Unique Challenges of Managing Affirmative Action in the Healthcare Industry

Beth Montgomery, SPHR, SHRM-SCP

By Beth Montgomery, SPHR Sr. Consultant, OutSolve

As a former federal contractor, I have experienced first-hand how challenging it can be to make the square peg (affirmative action regulations) fit into the round-hole (real life, day-to-day business operations). While Operations’ staff generally comprehends and supports the concept of affirmative action, you may experience the proverbial “line drawn in the sand” if too many data requests, documentation requirements or procedural changes are made (2014 was certainly not an easy year for affirmative action professionals due to the addition of data requirements for protected veterans and individuals with a disability). And while all federal contractors must follow the same general requirements pertaining to their affirmative action programs, the healthcare industry faces unique challenges not experienced by other industries due to the nature of the business, which many compare to a 24 hour a day/7 days a week roller coaster ride.

What are some of these challenges, and what steps can you take to be viewed as a business partner by Operations and not merely as a non-strategic, single-minded regulatory Enforcer?

Big, Ugly Mounds of Data: For years, we have heard that “big data is bad data”, meaning the larger your pool of data being analyzed, the greater the chance of statistical indicators of disparate impact occurring. When statistical indicators occur, you are compelled to research the cause of the indicator; the larger the data set (applicants, for instance), the more complicated and time-consuming this review becomes.
Factors lending to large amounts of data in the healthcare industry include:

• High volume of active jobs: While many employers have a range of jobs from small to large numbers; healthcare functions at an even higher level with many hospitals carrying thousands of jobs with tens of thousands of employees and astronomical numbers of applicants. This makes the creation of job groups and meaningful availability pools a significant challenge leading to many risk factors to oversee.

• High Turnover: The healthcare industry has historically been fraught with high turnover. Whether it be in low-skilled, low paid positions such as CNAs, home health aides or environmental services workers – who will quit without notice to work for a competitor across the street for five cents more an hour, or the registered nurse or therapist who will work long enough to collect the sign-on bonus then resign, only to move on to the next employer who is offering an even better sign-on bonus - these are challenges every Executive Director and CEO face daily. It is not uncommon to find the same employee in your data set listed as hired, terminated and rehired multiple times within the same Plan year.

• Fluctuating Patient Census: The cyclical ebb and flow of patient census impacts staffing levels which, in turn, can potentially impact your employment data.   • Per Diem/PRN Employees: While the unique per diem or PRN employment status offers many benefits to both employers and employees alike, it can add to your data challenges. Changes in status from full or part-time to per diem (and vice versa) are often seen throughout the year, as is a high number of requisitions for per diem positions and a high volume of applicants.
While your ability to impact the causes of the large amounts of data may be limited, there are steps you can take to decrease the pool size for analyses.

 Job groups are the foundation of how all analyses within the affirmative action plan are conducted. Is the placement of job titles within your job groups logical, based upon similar responsibilities, compensation and paths for advancement? Should you have more or fewer job groups? While there is no magic number of job groups to use as a target, you do not want there to be so few that the vast majority of your jobs appear in a couple of job groups, nor do you want there to be so many that you seem to have a different job group for every title. Depending on how often job titles change within your organization, I would suggest conducting an annual review of your title placement within groups – and do not forget to invite your friends in the Compensation Department to assist in this review. You should also carefully review the recruitment areas and occupational codes used in the Availability Analysis for each job group to ensure an accurate comparison is being made in your annual affirmative action plan. And, remember to document this review as part of your annual internal audit of the affirmative action program.

 Thoroughly understand the Internet Applicant Rule and what a huge impact it should make when determining your applicant pool.

 Educate your recruiters annually on how to utilize data management techniques when reviewing large pools of applicants.

 Discuss with your recruiters why it is important they monitor the pool size of applicants for requisitions, especially for those positions that historically receive a high level of responses (office positions, for example). Keep these high-response requisitions open for shorter amounts of time, and build in to your policy the allowance for this procedure.

 You must understand who is in your applicant pool and if they truly should appear there. Duplicate applications by the same applicant for the same position within a short period of time or a change in employment status alone are instances where a healthy trim in your pool size could occur. Look at each requisition individually to ensure it is a valid requisition that should appear in your analyses. Look at the timing of the hire date and if the applicant pool is in the correct Plan year. Perhaps you should conduct separate analyses for data that results due to acquisitions/mergers, divestitures or the outsourcing of an entire department. Understand your data and ensure it represents an accurate depiction of your employment pools to be analyzed.  

Documentation and Record-Keeping: Due to Medicaid/Medicare reimbursement regulations, Operations is well-versed on the necessity of timely and consistently detailed clinical documentation. However, when it comes to documentation pertaining to HR decisions, you may find there is an opportunity for improvement. Having concise policies pertaining to documentation, record-keeping and retention periods as well as conducting (at a minimum) annual training with Operations (hiring staff and leadership) is a must. Conducting internal audits throughout the year of documentation and retention efforts is also a Best Practice (and don’t forget to document and retain information regarding your self-audits).

• Documentation of Compensation Decisions: Starting salaries for the majority of healthcare positions follow experience-based pay scales. While there may be some pay-per-visit or per diem positions which pay flat rates regardless of experience, starting pay rates for the vast majority of non-per diem positions are experience-based. I have seen countless experience-based pay scales or grids, some so detailed as to break down how half-credit is given for foreign nurse experience or other healthcare positions (i.e. credit is given to an RN for years worked as an LPN or CNA). However, I have rarely witnessed a federal contractor actually tracking this information in an easily-accessible electronic format. If audited by the OFCCP, the federal contractor must provide an exhaustive detail of factors impacting pay for employees and the turnaround time for fulfillment of this request is very brief. Since years of experience plays such a large part in determining starting pay for the majority of healthcare positions, it is a Best Practice to have a detailed compensation policy, including how to consistently determine and document years of experience, as well as a method to track and report upon this information within the HRIS system.

• Bullseye Target on Recruitment: Maintaining acceptable patient/resident to caregiver ratios is vital in healthcare and this is challenged daily by high turnover. Maintaining acceptable staffing levels becomes the roundabout responsibility of Recruitment, and Operations demands that when it falls short, it be corrected at lightning speeds. Filling the never-ending volume of job openings is a gargantuan task for recruiters and, coupled with procedural and documentation requirements for affirmative action, can be overwhelming from a documentation and record-keeping perspective.

The high volume of employment transactions occurring each year in healthcare does not go unnoticed by the OFCCP which is why so many audits continue to be focused on the recruitment and selection procedures of federal contractors. Having the knowledge that this will be a key area of focus by the government in their review if audited should give you an incentive to take proactive measures to help insulate you against exposure in this area. Conducting both new hire and annual training with recruiters and Operations on affirmative action requirements, how they impact the program on a daily basis and how something as simple as disposition reasons (and how they are used) is a critical Best Practice. Not only does it provide consistency in training content, it also provides a consistent reminder that both recruiters and Operations are the key players in the success of the affirmative action program.

Mergers and Acquisitions: The shape of the healthcare industry is constantly morphing through mergers and acquisitions. These bring new, and not insignificant, data collection, record retention, and pay challenges that the new company assumes upon merger or acquisition.

• Merger of HRIS and Payroll Systems: Once the acquisition is complete and prior to the merger of any HRIS or payroll systems, I suggest getting baseline demographic numbers of the employees from both systems to compare to post systems merger, in case there may be issues in cross-walking the data between systems. While the overall data may not be exact, it will provide you with a close point of comparison. It is also beneficial for affirmative action to be included as part of the systems merger team so that assumptions pertaining to data are not made erroneously.

• Affirmative Action Program History: The due diligence process should include obtaining information regarding OFCCP audit history, including the status of any open audits for risk assessment purposes. Once the merger or acquisition is complete, you should obtain copies of past affirmative action plans as well as data from job placement/outreach vendors. It has been my experience that while these vendors will “play nice” with the new operator for a period of time and fulfill any data requests that may be made, this level of response will not last forever, especially if you do not continue to use their services, and may eventually come with a price.

• EEO-1 and VETS-4212 Reporting: The due diligence process should also include obtaining information pertaining to EEO-1 and VETS-100 report filings. Once finalized, you will need to ensure the merger/acquisition or divestiture is reported to the EEO-1 Committee as well as copies of prior EEO-1 and VETS reports are obtained.

We’ve discussed several items that may help you, as an affirmative action professional, strategize to be seen as a forward-thinking partner to Operations. You should strive to create a compliant affirmative action program which insulates the company against legal exposure yet does not create a great amount of additional work for them. By understanding the regulations, having a thorough knowledge of your data and ensuring it represents an accurate yet strategic depiction of operations will assist in your role changing from that of a regulatory enforcer to business partner.

To contact Beth for comments or questions you can reach her at: (888) 414-2410 or bmontgomery@outsolve.com Copyright OutSolve, LLC 2018

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