A How a DEI Focus Can Support Affirmative Action Compliance By Julia Paris, Esq., Director, Specialized Consulting Services, Employers Council Among the regulations and compliance requirements imposed on the banking industry, there is one that may fall below the radar: Affirmative Action (AA). As stated by the Office of Federal Contract Compliance Programs (OFCCP), “Financial institutions with federal share and deposit insurance are considered to be government contractors” and required to comply with Affirmative Action. A quick review of AA may be helpful. Created by Executive Order 11246 in 1973, AA is intended to “ensure equal employment opportunities for applicants and employees” and combat employment discrimination based on protected class (age, disability, gender, race, religion, sex, etc.); amended in 1974 by VEVRAA to include veterans and active military personnel, AA is housed within the U.S. Department of Labor with compliance administered by the OFCCP. AA compliance requires a written affirmative action plan (AAP) to address the flow of applicants and employees through an organization’s processes from recruiting to hiring, selection for advancement, pay practices and termination. Extensive tracking and annual reporting must be completed, driven by statistical analyses of internal staffing and comparisons with external community demographics. Employers must review their data to identify statistical gaps and discrepancies, then devise and implement strategies to address them. Non‑compliance may lead to invasive audits and monitoring. The ultimate objective of AA is to eliminate barriers to equal opportunity in workplaces with statistically meaningful reflection of community demographics in workplace participation. So, what does DEI (diversity, equity, inclusion) strategy have to do with AA? To be clear, DEI is not currently mandated by law and is not the same as AA compliance. Unlike AA, DEI does not define specific classes of people and is intended to provide universal benefits. Recently, DEI has been critiqued as politically motivated or socially correct; when done properly it can instead be a powerful, human-focused business strategy. At Employers Council, we believe employers can incorporate DEI in their business strategy to obtain improved results by attracting, engaging and retaining people with the skills, abilities and potential needed to implement business strategies and achieve desired results. Banks may wish to consider a broader approach to the challenges of AA compliance with strategies that also improve overall business outcomes. Voluntary efforts to enhance workplace diversity, equity and inclusion offer opportunities to simultaneously leverage the impact of efforts designed to address AA requirements. Importantly, unlike AA, improved business results are the measure of success of any DEI efforts. An underlying concept of DEI is that every human being is unique, has potential to contribute, and can flourish when offered opportunities that match their strengths along with consistent employer support. DEI challenges employers to look beyond “business as usual” tactics to identify talent that may be overlooked due to presumptions, biases, stereotypes, process inertia and lack of imagination. Employers with a DEI focus can tap into a wider pool of talent and expand the capabilities of their workforce. Historically, for example, neurodiverse people have not fared well in standard employment hiring practices; they often lack social skills that are deemed of value by traditional applicant Colorado Banker 10
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