Tracking Diversity Quotas in Construction

May 18, 2021

For too long the construction industry has suffered from a lack of diversity in gender and race. To combat this, federal contracts legally require a percentage of the project goes to minority-certified businesses. Aside from legal requirements, the benefits of diversity in construction are hard to ignore. 

While the data has proven diversity improves financial returns, diverse projects also excel in workplace safety and innovation. Though collecting certifications, documents, and records to track diversity can prove to be a cumbersome task, there are ways to manage this more efficiently, and, ultimately, improve your company’s bottom-line.

Why Diversity Matters in Construction

According to the Associated General Contractors of America (AGC), diversity offers tangible benefits. For example, businesses who employ a diverse workforce are:

  • 21% more likely to have above-average financial returns with a gender diverse team
  • 33% more likely to have above-average financial returns with a racially diverse team
  • Diverse workforces result in more welcoming and generally safer work environments
  • Diverse teams are more productive than their less diverse counterparts

It’s not enough to simply hire subcontractors to satisfy federal requirements. Diversity must be less about meeting quotas and more about embracing unique perspectives and experiences and a genuine desire for inclusion. 

When not done properly, employees from diverse groups can feel excluded or outcast, resulting in increased stress. This stress can be distracting, resulting in loss of focus – a major cause of workplace injury. Low morale might also reduce productivity, which could cause unnecessary delays. All of these factors affect your construction company’s bottom line. The key is a genuine shift in inclusive behavior and your construction company culture.

This may seem like a challenge. The AGC notes that 63% of construction workers are white and 90.9% are male. According to the Bureau of Labor Statistics, construction managers are even more likely to be white (91.4%) and less likely to be women (8.4%) than the construction workforce as a whole. For this to change, you need the ability to find appropriate subcontractors, track your diversity quotas, and have the ability to share and report them when necessary.

Genuinely embracing diversity will help you stand out as an industry leader. 

Diversity Requirements for Government Contracts

If you’re hiring subcontractors for a federal government project, procurement practices that prioritize diversity are mandatory. This requires making an active effort to recruit subcontractors without regard for race, gender. or any factor beyond their ability to perform the work needed.

While meeting diversity quotas is essential, the goal isn’t to hire a subcontractor just because they are a minority. Instead, the goal is to give minorities an equal opportunity in the application process. To start, place your job description on websites targeting diverse subcontractors, including sites like the U.S. Minority Contractors Association or the National Association of Women in Construction. 

Wider job posting increases your chances of receiving bids from a more diverse group of highly qualified minority subcontractors. The key is to provide yourself with choices you might not otherwise have through the deliberate and intentional broadening of your procurement efforts. 

The Office of Federal Contract Compliance Programs requires that you maintain records regarding diversity that may be audited. Not only is it important to engage in these inclusive procurement efforts, but you must also meticulously document them.

So what does diversity tracking look like right now?

Current State of Diversity Tracking

Diversity record-keeping often consists of spreadsheets, surveys, and DropBox folders. If you’re still doing things this way, you’re definitely not alone. However, there is a better way. All that manual data entry takes time and can result in critical errors. 

Manually tracking diversity certifications also means you must remember to follow up with contractors who may not send them right away, causing you to miss critical deadlines that could be costly. It’s also time-consuming to create monthly reports manually, and it is easy to make errors when transferring data. 

Finally, manual diversity tracking limits data transparency across your entire supply chain. You might not meet diversity quotas across your primary subcontractors, but maybe you do in terms of sub-tier contractors. You’ll have a hard time determining this if you’re tracking diversity quotas manually. 

The better solution is diversity tracking software, which gathers diversity certifications for you, tracks them should they expire, and can be used to create reports for government agencies as needed. This software also improves “big picture” visibility regarding all of your quotas and goals.

Constrafor Tracks Diversity Procurement and Much More

Try Constrafor’s diversity procurement platform to easily request and verify subcontractors’ diversity certificates. Immediately see which subcontractors qualify as WBE, MBE, SDVOB, and more. Constrafor automatically tracks outstanding requests, sends reminders when needed, and keeps received certificates stored in an intuitive cloud-based interface. This makes the process of tracking and managing diversity procurement a breeze.

Diversity doesn’t have to be complicated. Demo Constrafor today!