The CFPB Can Enhance Its Diversity and Inclusion Efforts

Recruiting and Hiring

OPM has stated that workforce diversity is based on the merit system principle that recruitment should focus on seeking qualified individuals from all segments of society while avoiding discrimination for or against any employee. OPM has further stated that emphasizing diversity in the hiring process will ensure that agencies have a workforce capable of addressing increasingly complex challenges more efficiently.

This section presents information on the CFPB's recruiting and hiring processes. Specifically, we provide a summary of the applicable laws and regulations, the CFPB's processes for recruiting and hiring, and demographic statistics. We identified information that the CFPB can further explore related to Black/African American applicants' representation throughout the hiring process.

Applicable Laws and Regulations

The CFPB has the authority to hire employees under competitive service or excepted service.²² The competitive service hiring authority allows the CFPB to fill positions through open competition among the general public. Under the excepted service hiring authority, the CFPB can fill positions outside the competitive service that are specifically excepted by statute, the President, or OPM.

Title 5, United States Code, sections 2301 and 2302, respectively, establish merit system principles and prohibited personnel practices that are applicable to the CFPB's recruiting and hiring process. In addition, title 5, chapter 33, of the United States Code and the requisite implementing regulations establish procedures for the examination, selection, and placement of civil service employees in the executive branch. However, the Dodd-Frank Act granted the CFPB temporary authority that permits the agency to waive the requirements of title 5, chapter 33, of the United States Code and the requisite implementing regulations to the extent necessary to appoint employees on terms and conditions that are consistent with section 11(1) of the Federal Reserve Act, while providing for

• fair, credible, and transparent methods of establishing qualification requirements for, recruitment for, and appointments to positions
• fair and open competition and equitable treatment in the consideration and selection of individuals to positions
• fair, credible, and transparent methods of assigning, reassigning, detailing, transferring, and promoting employees²³

The CFPB's Processes

Recruiting

According to the OHC's Diversity Recruitment Strategy, the success of the CFPB's recruiting initiatives depends on a highly qualified candidate pool, a fair and equitable process, and management accepting the value of diversity. The OHC's Talent Acquisition section, which is primarily responsible for recruiting at the CFPB, collaborates with the OHC, OMWI, and the OEEO to effectively carry out the diversity recruitment strategy. The diversity recruitment strategy outlines the various recruiting initiatives, including outreach to colleges and universities, the establishment of relationships with professional and affinity organizations, and the use of social media and other recruiting tools.

Talent Acquisition collaborates with OMWI to select colleges and universities²⁴ to recruit from based on three factors:

• the ongoing hiring needs of the CFPB (e.g., mission-critical occupations and the most critical skills and competencies needed for open positions)
• the diversity of the student body in fields of interest to the CFPB
• the level of interest within the student body in public service, federal government, and the CFPB's mission

After the colleges and universities are selected, Talent Acquisition develops relationships with affinity groups on campus, such as the national and local chapters of the Association of Latino Professionals in Finance and Accounting and the National Association of Black Accountants. Affinity groups provide an opportunity for the CFPB to identify highly qualified and diverse talent pools. Students are encouraged to apply for job opportunities at the CFPB, including through the Pathways Programs offered at the CFPB.²⁵

Talent Acquisition also works with OMWI to identify key professional and affinity organizations that serve diverse populations and address subject-matter areas relevant to the CFPB. Talent Acquisition collaborates with these organizations through events, information sessions, and headquarters visits. In addition, Talent Acquisition uses the CFPB's website, social media, search engines, and the job boards of these various professional and affinity organizations to advertise available CFPB positions.

Hiring

According to the OHC's interim Hiring, Promotion, and Internal Personnel Movements Policy, it is the CFPB's policy to provide

equal opportunity in employment for all persons, without regard to race, color, religion, sex (including pregnancy, sex stereotyping, gender identity, and gender non-conformity), national origin, disability, age (40 or older), genetic information, political affiliation, marital status, sexual orientation, parental status, uniformed status, membership in a labor organization or union activities, prior EEO or whistleblower activity, or any other nonmerit factor.

The CFPB's hiring process generally begins when a hiring manager works with the OHC to develop the vacancy announcement for the position to be filled. Vacancy announcements are posted on the CFPB's website and on USAJobs.gov, the official federal government website for jobs and employment information.²⁶ As interested individuals apply, they are prompted to voluntarily self-disclose demographic data, such as gender and race.

When the vacancy announcement closes, the applicants' minimum qualifications, technical competencies, and core competencies are evaluated by Treasury's Bureau of the Fiscal Service for positions other than senior manager positions.²⁷ The CFPB contracts with the Bureau of the Fiscal Service to determine which applicants meet the minimum qualifications, such as required education, to confirm eligibility for the position. The Bureau of the Fiscal Service also evaluates applicants' technical and core competencies to determine which applicants are best qualified for the position.²⁸

The hiring manager may evaluate best-qualified applicants using methods such as interviews and reference checks. If the hiring manager decides to select an applicant for the position, the OHC's Total Rewards section works with the hiring manager to determine the appropriate salary to offer. The OHC's Human Capital Services section then takes the necessary actions to extend a job offer, and the OHC's Talent Management section onboards the employee.

Demographic Statistics

We analyzed the CFPB's hiring data for FY 2011 through FY 2013 based on the race/ethnicity of applicants for non-senior-manager positions only. We obtained these data from the CFPB's talent acquisition system, which only contains data for applicants who applied to vacancy announcements posted on USAJobs.gov. For the three-year hiring period under review, we analyzed data by four phases in the hiring process: applied, eligible, best qualified, and hired (figure 5).²⁹ See appendix D for further detail.

Figure 5: Applicants for Non-Senior-Manager Positions, by Race/Ethnicity, Average for FY 2011–FY 2013^a

Source: OIG analysis based on CFPB-provided data.

^aAs previously noted, the Bureau of the Fiscal Service determines eligible and best-qualified applicants applying for non-senior-manager positions. Return to figure

Finding: Further Analysis of Hiring Data Could Enhance the CFPB's Efforts to Promote Workforce Diversity

We found that Black/African American applicant representation in the first two phases of the hiring process (applied and eligible) exceeded 30 percent. The group's representation in the best qualified and hired phases decreased approximately 10 to 13 percentage points.³⁰ As previously mentioned, the CFPB contracts with the Bureau of the Fiscal Service to determine which applicants are eligible for the position and which of those are best qualified. However, the CFPB is responsible for overseeing how the Bureau of the Fiscal Service makes these determinations to ensure that the CFPB's hiring process provides equal employment opportunity. The MD-715 states that

agencies must regularly evaluate their employment practices to identify barriers to equality of opportunity for all individuals. Where such barriers are identified, agencies must take measures to eliminate them. With these steps, agencies will ensure that all persons are provided opportunities to participate in the full range of employment opportunities and achieve to their fullest potential.

The MD-715 requires agencies to conduct a self-assessment on at least an annual basis to monitor progress and identify areas where barriers may exclude certain groups. This self-assessment must include an evaluation of the race of applicants for both permanent and temporary employment. Although the CFPB currently maintains and monitors the demographic data of applicants as part of the OEEO's annual MD-715 reporting, further analysis of the hiring data could provide the CFPB with an opportunity to determine whether potential barriers to workforce diversity exist and to take necessary action to address potential barriers.

Management Actions

The CFPB has created the Diversity Hiring Working Group, which is responsible for making recommendations to improve the hiring process. For example, based on a recommendation from the workgroup, the OHC now requires hiring managers to provide information on the status of each candidate referred for consideration during the final selection process. The OHC tracks the demographic data of selected and nonselected applicants and the reasons for nonselection to determine whether potential barriers to equal employment opportunity exist in the later phases of the hiring process.

Recommendation

We recommend that the Director of the OEEO

1. Enhance efforts to

1. 1. identify and evaluate potential barriers to equal employment opportunity in the CFPB's hiring process.
   2. eliminate or modify any policy, practice, or procedure that creates such barriers, as necessary.

Management's Response

The Director of the CFPB concurs with our recommendation. In his response, the Director of the CFPB noted that "OPM recently analyzed applicant flow data on a government wide basis; this data show markedly similar results to those found in the Report." In addition, he stated that it is notable that appendix C of our report states that the CFPB's non-White workforce is 33 percent, while appendix D states that the hiring of non-White employees was 44 percent from FY 2011 to FY 2013. The Director of the CFPB refers to the CFPB's ongoing tracking of hiring data related to the final selection of applicants, as mentioned in our report. To support the CFPB's efforts to ensure equal employment opportunity, the agency will analyze its hiring data and consider information, best practices, and recommendations from OPM. The Director of the CFPB states that the agency's initial assessment of hiring data, which will include a summary of key findings and recommendations, has a projected completion date of September 30, 2015.

OIG Comment

The actions described by the Director of the CFPB appear to be responsive to our recommendation. We plan to follow up on the CFPB's actions to ensure that the recommendation is fully addressed.

• 22. There are a number of other governmentwide hiring authorities available to CFPB hiring managers, including those related to the hiring of veterans and their family members, individuals with disabilities, Peace Corps staff and volunteers, and students. Return to text
• 23. The CFPB's temporary waiver authority expires July 21, 2015. Return to text
• 24. The CFPB considers organizations such as historically Black colleges and universities, Hispanic-serving institutions, tribal colleges, women's colleges, and both private schools and public institutions. Return to text
• 25. OPM implemented the Pathways Programs, established by Executive Order 13562, Recruiting and Hiring Students and Recent Graduates. The Pathways Programs provide clear paths to federal internships and potential careers in government for students and recent graduates. The Pathways Programs consist of the Internship Program, the Recent Graduates Program, and the Presidential Management Fellows Program. Return to text
• 26. The CFPB posts senior manager positions on the CFPB's website but not on USAJobs.gov. Return to text
• 27. The CFPB determines the eligible and best-qualified applicants for senior manager positions. According to an OHC official, the CFPB also determines the best-qualified applicants for select positions that require multiple assessments to enhance the quality of candidates referred to hiring managers. Return to text
• 28. Best-qualified applicants are ranked as set forth in 5 U.S.C. § 3313 and 5 C.F.R. part 330. Return to text
• 29. During the application process, individuals were asked to voluntarily disclose demographic data. If an individual chooses not to disclose demographic data, he or she is categorized as Undefined. As previously noted, for the purposes of this report, we grouped the following race/ethnicity categories as Other due to the small number of individuals typically represented in each of these categories: (1) Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino),(2) American Indian or Alaska Native (Not Hispanic or Latino), (3) Two or More Races (Not Hispanic or Latino), and (4) Undefined (i.e., an individual chooses not to disclose demographic data). Return to text
• 30. Our analysis does not identify whether statistically significant differences exist in the number of applicants represented in each of the four phases of the hiring process based on race/ethnicity. It is important to note that statistically significant differences do not necessarily indicate discrimination and could be due to a wide variety of explanations, such as actual differences in the applicants' qualifications. Return to text