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Paging Martin...

Posted by Colin Kingsbury

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Apr 16, 2007 2:56:00 AM

Martin Snyder was nice enough to attempt to leave a comment on my previous post about the OFCCP, but for some reason my blog software is eating it, so I'm reposting it here for discussion. Martin writes,
Colin thanks for the review and I'm glad the post got your attention. Your prose is always worth the read whether I agree or not with whatever it is that you are saying. 

Yes, I'm quite aware of what befalls Ahab, his ship, and crew. There is indeed a chance that I'll end up entangled on the body of the beast after leading our ship on a fruitless campaign- but somebody has to do it, and since I think we have standing and the least to lose of most who would cross the mighty hunter, it falls to me to voice the case against this governmental overreach. 

Might I ask if you are aquatinted with Title IV of SOX, called "Enhanced Financial Disclosures"? or Title XI "Corporate Fraud and Accountability" ? The act is intended to provide better accounting systems- no comedy involved, and your notion about CFO's and their taste for the rule is likely bit obsolete. The Harvard Business Review published an article called "The Unexpected Benefits of Sarbanes-Oxley" noting that:

"The areas of improvement go well beyond technical statutory compliance. They include a strengthened control environment; more reliable documentation; increased audit committee involvement; better, less burdensome compliance with other statutory regimes; more standardized processes for IT and other functions; reduced complexity of organizational processes; better internal controls within partner companies; and more effective use of both automated and manual controls. The result is not only shareholder protection, the official purpose of the act, but also enhanced shareholder value..."

Do you really think anything similar will ever be said about the OFCCP rule, except by hopeful spinners with embedded interests in compliance regimes (especially complex, never-ending and subjective ones)?

Or do you imagine that any inane rule is a good thing, as long as it fosters "process", which apparently can only be a good thing?
To be honest I think there's more here agreeing with my points than not.

Martin may be correct in saying that my understanding of how CFOs and boards feel about SOX is obsolete. Since the law went into effect, there have been tweaks, but nothing wholesale--most of the changes have been in terms of how businesses understand and apply the law. So if CFOs feel different today than they did five years ago, that says more about the CFOs and boards than it does about the law.

Second, while I want to tread carefully lest I put words in Martin's mouth, he seems to continue to operate from the basis that the only goals served by the OFCCP rules are, well, the OFCCP. If you actually look at what the rule ends up requiring contractors to do, what emerges is that you basically need to be able to explain:

1. Who applied to each position
2. If that person met your minimum requirements
3. If so, what happened to them

Really, am I missing something huge here? The search audit requirements are a little kooky, but in practical application I've yet to hear any real horror stories about auditors going on fishing expeditions, least of all in smaller organizations.

In any case, none of these three things strike me as unreasonable questions for a manager to ask a recruiter. If you're unable to say, "here's everyone who applied for the req," then the OFCCP would seem to be the least of your problems. Circling back to the SOX example, are going to see recruiters in 4-5 years saying, "ya know, that OFCCP wasn't really *that bad* after all..." I think the answer is probably yes.

It is of course entirely possible to make the rules mean a lot more than that, and some companies choose for their own reasons to add eight bullets below each of the above items, while others take the opposite approach. We advise clients to follow the simplest approach that answers the necessary questions as they judge them, because the simplest approach is usually the most reliable. That said, if Martin wishes to excoriate vendors for catering to client whims, he's going to need a lot of harpoons.

Last, I can't shake this sense that Martin thinks that the OFCCP is tilting at non-existent windmills here in terms of systematic discrimination. I think it's understandable that we'd all like to say "yes, that's gone, don't happen 'round here no more," but as the years go by I become less convinced of my own former certainty. A good place to begin is this post at Assymetrical Information, which has some good comments with additional links. The statistics I've seen are neither good enough to prove the case beyond a shadow of a doubt, nor shoddy enough to be dismissed out of hand.