Utilization Analysis is a process used primarily in affirmative action planning and workforce diversity efforts to evaluate how well the composition of an organization’s workforce reflects the availability of qualified individuals in the relevant labor market. The analysis identifies underrepresentation or disparities in hiring, promotions, or assignments across race, gender, disability status, and other protected classes.
It involves comparing the percentage of employees in specific job groups to the availability of qualified individuals in those same groups, based on labor market data such as U.S. Census statistics and internal feeder pools.
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Key Facts
- Affirmative Action Compliance: Required for federal contractors in the U.S. to meet affirmative action obligations under Executive Order 11246.
- Comparison Tool: Compares the demographic makeup of an employer’s workforce to the availability of those groups in the external labor market.
- Data-Driven: Utilizes census data, job group classifications, and internal HR data to assess disparities.
- Strategic Planning: Helps organizations identify where improvement is needed in recruitment, hiring, and promotion practices.
- Continuous Monitoring: Often part of annual reviews to ensure progress toward diversity and inclusion goals.
1. Who is required to perform utilization analysis?
U.S. federal contractors and subcontractors with 50 or more employees and a contract of $50,000 or more must conduct it as part of their Affirmative Action Plan.
2. What data is used in a utilization analysis?
It typically involves workforce demographic data, census labor market statistics, job groups, and the availability of qualified candidates by group.
3. How does utilization analysis promote diversity?
By identifying gaps between workforce representation and available talent, organizations can adjust hiring strategies to promote inclusion and equal opportunity.
4. What happens if underutilization is found?
Employers must set specific goals and take good-faith steps to improve representation without engaging in quotas or discriminatory practices.
5. Is utilization analysis the same as a diversity audit?
Not exactly. A diversity audit is broader and more holistic, while utilization analysis focuses specifically on comparing workforce demographics to external availability.
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