Diversity in the Technology Sector: Federal Agencies Could Improve Oversight of Equal Employment Opportunity Requirements

GAO-18-69 Published: Nov 16, 2017. Publicly Released: Nov 30, 2017.
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Highlights

What GAO Found

The estimated percentage of minority technology workers increased from 2005 to 2015, but GAO found that no growth occurred for female and Black workers, whereas Asian and Hispanic workers made statistically significant increases (see figure). Further, female, Black, and Hispanic workers remain a smaller proportion of the technology workforce—mathematics, computing, and engineering occupations—compared to their representation in the general workforce. These groups have also been less represented among technology workers inside the technology sector than outside it. In contrast, Asian workers were more represented in these occupations than in the general workforce. Stakeholders and researchers GAO interviewed identified several factors that may have contributed to the lower representation of certain groups, such as fewer women and minorities graduating with technical degrees and company hiring and retention practices.

Estimated Percentage of Technology Workers by Gender and Race/Ethnicity, 2005-2015

Estimated Percentage of Technology Workers by Gender and Race/Ethnicity, 2005-2015

Note: Changes from 2005 to 2015 were statistically significant at p-value <0.05 except for changes for female, male, and Black workers. All population estimates have Relative Standard Errors of less than 7 percent. “Other” includes American Indian or Alaskan Native, and “Two or More Races”. White, Black, Asian, and “Other” categories include only non-Hispanic members.

Both the U.S. Equal Employment Opportunity Commission (EEOC) and the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) have taken steps to enforce equal employment and affirmative action requirements in the technology sector, but face limitations. While EEOC has identified barriers to recruitment and hiring in the technology sector as a strategic priority, when EEOC conducts investigations, it does not systematically record the type of industry, therefore limiting sector-related analyses to help focus its efforts. EEOC has plans to determine how to add missing industry codes but has not set a timeframe to do this. In addition, OFCCP's regulations may hinder its ability to enforce contractors' compliance because OFCCP directs contractors to set placement goals for all minorities as a group rather than for specific racial/ethnic groups. OFCCP also has not made changes to its establishment-based approach to selecting entities for review in decades, even though changes have occurred in how workplaces are structured. Without taking steps to address these issues, OFCCP may miss opportunities to hold contractors responsible for complying with affirmative action and nondiscrimination requirements.

Why GAO Did This Study

Technology companies are a major source of high-paying U.S. jobs, but some have questioned the sector's commitment to equal employment opportunity. EEOC provides federal oversight of nondiscrimination requirements by investigating charges of discrimination, and OFCCP enforces federal contractors' compliance with affirmative action requirements. GAO was asked to review workforce trends in the technology sector and federal oversight.

This report examines (1) trends in the gender, racial, and ethnic composition of the technology sector workforce; and (2) EEOC and OFCCP oversight of technology companies' compliance with equal employment and affirmative action requirements. GAO analyzed workforce data from the American Community Survey for 2005-2015 and EEOC Employer Information Reports for 2007-2015, the latest data available during our analysis. GAO analyzed OFCCP data on compliance evaluations for fiscal years 2011-2016. GAO interviewed agency officials, researchers, and workforce, industry, and company representatives.

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Recommendations

GAO makes 6 recommendations, including that EEOC develop a timeline to improve industry data collection and OFCCP take steps toward requiring more specific minority placement goals by contractors and assess key aspects of its selection approach. EEOC neither agreed nor disagreed with its recommendation, and OFCCP stated the need for regulatory change to alter placement goal requirements. GAO continues to believe actions are needed, as discussed in the report.

Recommendations for Executive Action

Agency Affected Recommendation Status
Equal Employment Opportunity Commission The Chair of the EEOC should develop a timeline to complete the planned effort to clean Integrated Mission System data for a one-year period and add missing industry code data. (Recommendation 1)
Closed – Implemented
As part of an effort to overhaul its IMS data system, EEOC developed an Employer Master List (EML) that provides a consistent source of employer information, including industry codes, across charges. The Commission also reported that it has linked charges, including many in the older IMS system, to records in the EML that generally include industry codes.
Office of Federal Contract Compliance Programs The Director of OFCCP should analyze internal process data from closed evaluations to better understand the cause of delays that occur during compliance evaluations and make changes accordingly. (Recommendation 2)
Closed – Implemented
OFFCP took steps to understand the cause of delays in enforcement cases. Specifically, the agency reviewed cases that had been ongoing for more than 2 years without being referred for further enforcement action. They identified several specific bottlenecks, such as delays in conciliation due to limited explanation of evidence collected and analyses performed, a former protocol that lengthened the amount of time it took to complete reviews, and contractors' lack of incentive to resolve compliance findings prior to enforcement action. In addition, OFCCP issued DIR 2020-02, Efficiency in Compliance Evaluations, which included operational initiatives to keep the number of cases that are "aged" (i.e., compliance reviews unresolved two years from the issuance of the scheduling letter) below 15 percent of total caseload. As OFCCP moves forward, it will be important to evaluate these efficiencies in concert with information on case enforcement; steps that appear dilatory may in fact result in higher rates of enforcement. Nevertheless, the agency has taken sufficient action to address this recommendation.
Office of Federal Contract Compliance Programs The Director of OFCCP should take steps toward requiring contractors to disaggregate demographic data for the purpose of setting placement goals in the affirmative action program (AAP) rather than setting a single goal for all minorities, incorporating any appropriate accommodation for company size. For example, OFCCP could provide guidance to contractors to include more specific goals in their AAP or assess the feasibility of amending their regulations to require them to do so. (Recommendation 3)
Closed – Implemented
In fiscal year 2019, OFCCP provided guidance to contractors regarding disaggregating demographic data for the purpose of setting placement goals in the AAP. The guidance clarified when contractors are required to set disaggregated goals for particular minority groups. Also, even if separate goals for different race and ethnic groups have not been required based on the results of an OFCCP review, the guidance states that OFCCP recommends, as a best practice, that contractors set disaggregated placement goals for job groups when specific minority groups are underutilized.
Office of Federal Contract Compliance Programs The Director of OFCCP should assess the quality of the methods used by OFCCP to incorporate consideration of disparities by industry into its process for selecting contractor establishments for compliance evaluation. It should use the results of this assessment in finalizing its procedures for identifying contractor establishments at greatest risk of noncompliance. (Recommendation 4)
Closed – Implemented
OFCCP has continued to conduct internal review of its efforts to improve the focus of its enforcement efforts while meeting neutral selection standards. To identify contractors at greatest risk of noncompliance, the agency made changes in 2008, 2017, and in 2020 to use 2-digit NAICS codes, identifying Agriculture, Manufacturing, and Wholesale Trade sectors for additional focus. OFCCP reports that it is committed to exploring alternative methods for identifying likely violators and is identifying specific options in collaboration with the Department of Labor's Chief Evaluation Office. Efforts to improve the 2019 scheduling protocol based on 2-digit NAICs codes are a step forward; we encourage the agency's continued efforts.
Office of Federal Contract Compliance Programs The Director of OFCCP should evaluate the current approach used for identifying entities for compliance review and determine whether modifications are needed to reflect current workplace structures and locations or to ensure that subcontractors are included. (Recommendation 5)
Closed – Implemented
OFCCP determined that it must modify its efforts to identify entities for compliance review in order to ensure subcontractors are included and it has identified multiple options to achieve this objective. In January 2022, it reported that it plans to include subcontractors in the lists from which it draws entities for review, possibly beginning with the list released in the second quarter of FY22, by relying on the expiry date of the prime contract in the absence of such a date for each subcontract. As a longer-term strategy, OFCCP included a proposal in its Fall 2021 regulatory agenda for regulations requiring that contractors provide notice of subcontract awards. If finalized, OFCCP projected that proposed regulations would be issued in 2023. Alternatively, OFCCP may again petition OMB for authority to collect subcontractor information from contractors who are scheduled for review. Alternatively, OFCCP indicates it has regulatory authority to require contractors to maintain subcontractor information and to require scheduled contractors to produce it on request. With respect to whether scheduling procedures need modification to reflect current workplace structures and locations, such as increases in remote work, OFCCP reported in 2021 that while it would continue to monitor the need for modification of its procedures based on workplace structure trends, it had concluded that no change was required based on its experience in using an establishment-based model during the first 12 months of the pandemic even with a high percentage of remote workers. While OFCCP' reports that its regulations do not specifically address remote work or telework, it issued related guidance for federal contractors in June 2021 and notes that all teleworkers should be included in an establishment Affirmative Action Plan (AAP) or with a business function under a functional AAP.
Office of Federal Contract Compliance Programs The Director of OFCCP should evaluate the Functional Affirmative Action Program to assess its usefulness as an effective alternative to an establishment-based program, and determine what improvements, if any, could be made to better encourage contractor participation. (Recommendation 6)
Closed – Implemented
Having reviewed compliance evaluation data and feedback from FAAP participating contractors and OFCCP regional directors, OFCCP identified significant value in the FAAP as an alternative to the establishment-based AAP. According to OFCCP, contractors using FAAPs reported that the FAAP facilitated identifying issues, monitoring progress, and establishing clear lines of responsibility for AAP implementation. Similarly, OFCCP reported that as brick and mortar structure becomes less common, it is encountering increasing numbers of traditional establishment-related AAPs that do not align with contractors' organizational structures. Finally, OFCCP noted that FAPs allow contractors to resolve any adverse findings more globally within their organization, rather than solely on an establishment basis, and that review of employment policies and practices across functional units made complaint investigations more consistent, effective, and efficient. In 2022, OFCCP followed its steps to encourage contractors to use the FAAP program with a revised directive on FAAPs that established policies and procedures for requesting, modifying and renewing FAAP agreements.

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