1F02 Executive Order Utilization Analysis

The utilization analysis is a series of separate but interrelated analyses COs use to identify whether a contractor employs minorities or women in the workforce at a rate that would be expected based upon their availability for employment. Contractors must perform a utilization analysis that includes the placement of the contractor’s employees into job groups, the determination of the availability for the employment of minorities and women, and a comparison of their incumbency in the job groups to their availability. If a contractor’s utilization analysis reveals the underutilization of minorities or women, or both, in any of the job groups, the contractor must establish placement goals designed to cure the underutilization.

a. Placement of Incumbents in Job Groups. Having combined the job titles for the job group analysis, the contractor must separately state the percentage of minorities and the percentage of women employed in each job group.

b. Determining Availability. After aggregating individual job titles into job groups, the contractor must determine the availability of women and minorities for those job groups. “Availability” is a percentage estimate of the women and minorities in the reasonable recruitment area who have the skills required to perform the jobs within the job groups compared to all. When determining availability, the contractor must separately determine the availability of minorities and women for each job group, and consider at least the following factors:

• The percentage of minorities and women with the requisite skills in the “reasonable recruitment area,” sometimes referred to by COs as “external availability.” We define “reasonable recruitment area” as the geographical area from which the contractor usually seeks, or reasonably could seek, workers to fill the positions in question. When selecting the reasonable recruitment area, the contractor must not select an area in such a way that it would exclude minorities or women. For each job group, the contractor must identify and provide a brief explanation of the rationale for the selection of that recruitment area.
• The contractor should utilize the most current and discrete statistical information available to derive availability figures (such as census data, data from local job service offices, colleges and other training institutions). When evaluating the contractor’s availability information, COs must utilize the most recent EEO Tabulation (EEO Tab).34
• The percentage of minorities and women among those promotable, transferable or trainable within the contractor’s organization, is sometimes referred to by COs as “internal availability.” The contractor must not define the pool of promotable, transferable and trainable employees in such a way as to exclude minorities or women. For each job group, the contractor must identify the pool of promotable, transferable and trainable employees, and provide a brief explanation of the reason for the selection of that pool.
• Though not required, some contractors assign a percentage or “weight” for availability rates of employees recruited into the job group. For example, if there are several job titles in the job group, and the job titles have differing availability rates, the contractor may weight each job title differently when determining the availability for the job group as a whole. In that instance, the sum of the weighted availability estimates for all job titles in the job group must be the composite availability for the job group.35 A contractor may also choose to determine availability by weighing the internal and external availability for a particular job group. In that example, the availability would be a sum of the external availability and internal availability rates.

c. Comparing Incumbency to Availability. The contractor must compare the utilization of minorities and women in each job group with their estimated availability, and identify job groups where the percentage employed is less than would be reasonably expected, given their availability.

We use the term “underutilization” to refer to the presence of fewer minorities or women in a particular job group than would reasonably be expected, given their availability. Contractors use a number of methods to determine whether the representation rates of minorities and women are lower than would reasonably be expected. Some contractors declare underutilization when there is any difference between the availability percentage and the utilization percentage, while others conclude that underutilization exists when the number of minority or women incumbents in a particular job group is at least one whole person lower than the number predicted by the availability percentages. Other contractors use a general “80%” rule and declare underutilization only when the representation of minorities or women is less than 80%of availability (which is the expected representation). Still others test whether the difference between the actual and expected representation of minorities and women is statistically significant.

While contractors may choose any of these methods for comparing incumbency and availability, they must uniformly apply the same standard to all job groups, as appropriate. Occasionally, a different method may be more appropriate to determine underutilization. For example, in some instances it may not be reasonable for contractors to use the two standard deviation method. No matter the method used, the contractor should be able to explain why it selected that method. Contractors should not use more than one method so as to mask underutilization.

The contractor must establish a placement goal if the percentage of women or minorities, or both, employed in a specific job group is less than would be reasonably expected, given their availability percentage in that particular job group.