Dive Brief:

• A New York bakery agreed to pay $850,000 to resolve allegations that its practice of relying solely on word-of-mouth employee referrals to fill hourly jobs discriminated against female, Black and Asian applicants, the U.S. Department of Labor (DOL) said in an April 28 media release.
• Rockland Bakery Inc. provides baked goods to West Point Academy through a contract with the U.S. Department of Veterans Affairs. A compliance review by the Office of Federal Contract Compliance Programs found that in 2017, Rockland Bakery's word-of-mouth recruitment system contributed to hiring disparities at the company's Nanuet facility, according to the DOL release. The disparities affected female, Black and Asian applicants applying for work as cashiers, packers and bakers.
• These actions allegedly violated Executive Order 11246, which prohibits federal contractors from discriminating in employment based on race, color, religion, sex, sexual orientation, gender identity or national origin, the DOL said. In addition to paying $850,000, which includes back pay for affected applicants, Rockland Bakery agreed to extend job offers to female, Black and Asian applicants, cease its word-of-mouth referral practice and inform local recruitment centers of job openings. Rockland Bakery did not respond to a request for a statement by press time.

Dive Insight:

Employee word-of mouth referrals have been around for a long time, and understandably so. The practice provides employers with access to job candidates from a known and trusted source — their own staff.

But employers tread on dangerous ground when they rely solely on such referrals to the exclusion of other candidates, OFCCP Northeast Regional Director Diana Sen warned in the DOL release. Doing so could violate federal or state anti-discrimination laws, many of which consider facially neutral employment policies or practices discriminatory if the policy or practice has a disparate impact on a protected class, such as gender or race. Evidence of this showed up on Rockland Bakery's recruitment system. Its applicant pools did not resemble the available workforce in the community, Sen said.

The issue has gotten attention in the C-suite. Studies indicate that sponsors of succession plans often fall into the "mini me" syndrome of nurturing proteges the same race and gender as themselves, HR Dive has reported. This may shut out women and minorities from leadership roles. The bakery settlement highlights the problem at lower job levels.

There are strategies employers can use to ensure they recruit employees fairly. For example, HR can target potential talent early by forming partnerships with local high school and community college vocational programs, experts told HR Dive last year. Or they can connect with empowerment organizations. New York-based Tools & Tiaras reported success with a women's training program that taught participants how to install plumbing and led to several apprenticeships.

In the IT industry, Black professionals occupy less than 4% of technical roles in large tech companies, despite making up 13% of the overall labor force, one report found. Using targeted training initiatives, such as apprenticeships and internships, is a first step toward addressing staff diversity, an expert recently told HR Dive. But to improve attraction and retention of Black IT talent, companies should track data points of entry and retention, the expert said. This means looking at how resumes are reviewed, how candidates view their hiring experience and following up with those who didn't get hired or turned down the position to figure out why.

Assessing a company's relationship or nonexistent relationship with local Indigenous communities is a first step toward tapping into another talent pool, Indigenous Americans and First Nation Canadians, HR Dive reported last year. HR can look at how they can work with Indigenous partners on current jobs or create training programs to get people the skills they need, the CEO of Indigenous Works said in an interview.

HR can also tweak job postings to make sure the wording isn't inadvertently turning away other qualified and capable job seekers, such as individuals with disabilities, HR Dive reported.

Another strategy is to consider applicants with time gaps in their resumes, such as people with disabilities, caregivers, older workers and formerly incarcerated persons, experts participating in an April virtual conference hosted by the U.S. Equal Employment Opportunity Commission suggested. These groups offer valuable soft skills, such as critical thinking, problem solving, relationship building and entrepreneurship, the panelists said.