One of the most common questions asked by contractors when they are gearing up to manage affirmative action plan compliance within their company is:
“Should I purchase software or outsource my affirmative action plan?”
This is a critical question because it will impact a whole plethora of factors including:
- The accuracy/quality/meaningful-ness of your plan results
- How many resources you need to apply and the total costs the contractor must absorb considering both internal and external time and expenses
- OFCCP audit readiness
If a company has dedicated and experienced EEO staff that know how to manage the data, make educated decisions in the program, interpret and implement the results, and handle an OFCCP audit, then software can be the right solution. For everyone else, it’s a bad idea.
OutSolve has identified three reasons why affirmative action plan outsourcing may be a viable option for you.
- There is no such thing as TurboTax® for AAPs:
There are a lot of reasons why companies consider software for completing affirmative action plans. The most common – a busy HR manager is tasked with finding a low cost solution for developing the annual AAP. They ask around and search the Internet for a “click-click print a plan” tool that will satisfy leadership’s desire for a fast, low cost answer.
The fact is, however, that unless the user understands the data and the decision tree that is integral to accurate affirmative action plan development, the plan will be a “garbage in-garbage out” solution. It’s easy to produce indefensible results during plan development. To produce an effective, compliant affirmative action plan, knowledge of the industry, policies and procedures is integral and experience preparing AAPs is crucial. That knowledge and experience is missing with some contractors.
- The requirements for being compliant have become more complex and there is significant risk to contractors who choose a quick, low-cost plan development method:
With the expansion of regulations and OFCCP's aggressive auditing efforts, it’s important for contractors to minimize exposure to problem areas that can be discovered during a compliance review. Contractors, prior to OFCCP’s regulation and audit updates, have always struggled to collect and analyze applicant data. Now, with the addition of new and proposed regulations – particularly around veterans and individuals with a disability, compiled with increased frequency of conciliation agreements and financial settlements with OFCCP there is too much at stake for contractors to take the path of least resistance.
- The value associated with outsourcing has surpassed any cost-benefit gained from buying software:
The intent behind buying software for most contractors is to save money. It’s assumed that the program will funnel them into making the right selections, create an accurate AAP that allows users to move on to other tasks. This may have been a functional decision in the past. Now, however, that’s not the case. AAP consulting is a mature market with aggressive, skilled suitors, and, like any market, the competition drives the cost. With the growth of companies that offer AAP consulting, the fees for using an expert consultant is a fraction of what it used to be when services were billed hourly and à la carte options were the norm. Now, consultants use fixed costs, volume discounts and competitive bids. Not only has the cost value become more attractive, but the deliverables (what contractors get for their dollar) typically exceed anything a software program could provide.
- Expertise – Having open access to an expert team who supports dozens (or hundreds) of contractors is important and valuable and often comes included under a fixed rate.
- Keeping Up and Adapting to Changes – The laws around affirmative action are changing fast. Not only has record keeping and analysis for veterans and individuals with a disability expanded but compensation has become a contentious area of compliance and more changes are in the pipeline. Software cannot easily adapt to these fluctuations.
- Training – Software cannot conduct training and consultants often provide affirmative action training with their consulting packages. For those who are not AAP experts, having a consultant available to explain reports, diagnose problem areas, and assist with required staff training is invaluable.
- OFCCP Audit Support – Audits are a red-flag area for software users. There are several obvious reasons around the concept of lacking the knowledge to support the plan and interact with the OFCCP. Software users often submit what the software spits out, without fully understanding what it means or how much information they may be handing over to the OFCCP. Companies – using software – may submit above and beyond what the OFCCP requires, revealing confidential company information. There is sensitive data involved under the umbrella of affirmative action including compensation and transactions such as hires that when, under scrutiny, can quickly evolve into a claim of discrimination by the OFCCP.
- Guarantees – Consultants will usually guarantee their methods. So, if OFCCP or any authority takes issue with plan output, excluding legitimate issues, the consultant will support and defend the results. An in-house HR staff member would typically struggle to respond to in-depth scrutiny of the plan.
- Custom Reporting – A valuable component of consulting is the ability to adapt to client needs with custom reporting that can range from executive summaries to advanced data output. Most software programs cannot adapt beyond the basics.
- Online Support – In the current marketplace, consultants offer a pool of resources to assist with ongoing compliance efforts. Plan development used to be like tax season – every year, you complete your taxes, and move on. Now, with compliance being more of a year-round activity, access to continuous support from a consultant is hugely beneficial. Consultants, recognizing that clients need continuous access to regulatory information and training, have responded by developing online portals. These portals, or dedicated websites, serve to share resources such as reports, training materials, outreach tools and more. Online portals enhance the consulting program and these resources often don’t exist for software users.
- Managing Complexity – Many contractors are required to support affirmative action for dozens and even hundreds of establishments. This means a mountain of varied data sets that are touched by a lot of people within the organization. With decades of experience, we have found that organizations that leverage external consultants to manhandle the five items below can shift their focus to affirmative action plan implementation and happily never look back.
- i. Organize and clean multiple data sets from a variety of systems
- ii. Create a high-volume of compliant plans
- iii. Develop custom reports for goals and transaction monitoring
- iv. Prepare OFCCP audit submissions
- v. Prepare management summary reports