The two examples below show how a hypothetical contractor might establish a benchmark using the five-factor method. The first example shows how a new contractor might establish a benchmark for its first AAP. The first AAP may contain only some of the data required by the regulations and, therefore, will not be in full compliance with the regulations. The second example shows how the same contractor might establish a benchmark for its subsequent AAP when it is in full compliance with the regulations.

These examples are not prescriptive; they simply demonstrate possible approaches contractors may take when establishing an individualized benchmark. Contractors, however, may take other approaches. So long as the contractor reasonably describes and documents the factors it took into account and its methodology for considering them, it will be found to be in compliance with the 41 CFR 60-300.45 requirement to establish a hiring benchmark.

  1. First AAP Year. FCI, a contractor in Dayton, Ohio, establishes an individualized benchmark for its transitional AAP of 8.2%. The data considered using the five factors and the methodology FCI used to create its benchmark are shown below. FCI is an engineering and aerospace firm.

    Hiring Benchmark: 8.2%

    Example information for a contractor in their first AAP year
    Example Contractor Data

    Factor 1: Average percentage of veterans in the civilian labor force in Ohio (data is for illustrative purposes only)

    2012
    7.8%

    2013
    8.03%

    2014
    8.72%

    Factor 2: Number of veteran participants in Ohio ESDS over the last four quarters (data is for illustrative purposes only)

    75,246

    Factor 3: Applicant and hiring ratio data for the previous year (41 CFR 60-300.44(k) data)

    First year – No data for the previous year available.

    Factor 4: Recent assessments of the effectiveness of its outreach and recruitment efforts

    First year – Assessment not yet conducted.

    Factor 5: Other factors affecting the availability of qualified protected veterans

    Contractor location is less than 15 miles from the Wright-Patterson Air Force Base. The base is headquarters of the Aeronautical Systems Center and the Air Force Research Laboratory. Estimates from the local media outlets are that between 100 to 250 veterans leave military service while stationed at this base annually and many are highly skilled.

    To arrive at its benchmark, FCI considers the data in the following way:

    • First, Factor 1 indicates that the percentage of veterans in the civilian labor force in Ohio over the last three years has been rising slightly.
    • Second, Factor 2 shows that a significant number of veterans are seeking employment in the state and have registered with the ESDS.
    • Third, because FCI’s AAP is its first AAP, it does not yet have data available for Factors 3 and 4. Therefore, FCI is unable to fully consider these factors in developing its benchmark.
    • Finally, Factor 5 indicates that there are likely good veteran recruitment opportunities for FCI, at the local level, due to its proximity to a major military installation. The skills match with Wright-Patterson is also very compatible with FCI’s needs, as many of the separating veterans are highly skilled in engineering and related fields.

    Looking at all the available data from Factors 1 through 5, including the absence of data for Factors 3 and 4, FCI decides to rely on the Factor 1 data reflecting the general availability of veterans in Ohio’s civilian labor force as the basis for its benchmark. In light of the relatively consistent statewide availability numbers, FCI decides to average together the three years of Factor 1 data and uses as its benchmark the resulting 8.2%. This number is higher than Ohio’s veteran availability for two of the last three years (2012 and 2013); at 8.2%, the benchmark is only 0.52% lower than the state’s 2014 availability of 8.72%. FCI’s methodology for setting its 8.2% benchmark appears reasonable based on how it considered and assessed the significance of the five factors.

  2. Subsequent Year AAP. The following year, for its first full AAP, FCI establishes an individualized benchmark for its AAP of 9%. FCI’s data for each of the five factors and its methodology in arriving at its benchmark are shown below.

    Hiring Benchmark: 9%

    Example information for a contractor in their second AAP year
    Example Contractor Data

    Factor 1: Average percentage of veterans in the civilian labor force in Ohio (data is for illustrative purposes only)

    2013
    8.03%

    2014
    8.72%

    2015
    8.53%

    Factor 2: Number of veteran participants in Ohio ESDS over the last four quarters (data is for illustrative purposes only)

    82,770

    Factor 3: Applicant and hiring ratio data for the previous year (41 CFR 60-300.44(k) data)

    Applicant Ratio: 9%

    Hiring Ratio: 10%

    Factor 4: Recent assessments of the effectiveness of its outreach and recruitment efforts

    Overall outreach and recruitment efforts are effective. FCI has attracted a large pool of veteran applicants due to participation in veteran job fairs and veteran hiring from local colleges.

    Factor 5: Other factors affecting the availability of qualified protected veterans

    Contractor location is less than 15 miles from the Wright-Patterson Air Force Base. The base is headquarters of the Aeronautical Systems Center and the Air Force Research Laboratory. Estimates from the local media outlets are that between 100 to 250 veterans separate from service while stationed at this base annually, and many are highly skilled. Contractor works with Wright-Patterson’s Transition Assistance Program (TAP).

    In this scenario, FCI has more information about its outreach and recruitment efforts and has assessed their effectiveness. Its program has resulted in applicant and hiring ratios that are higher than the statewide percentage of veterans in the civilian labor force. Therefore, FCI concludes that it would be more appropriate to base its hiring benchmark on its own applicant and hiring ratio data, rather than on the statewide availability data it had used the previous year when its own data was incomplete. Although the number of veterans seeking employment through the ESDS has increased slightly, FCI is also mindful that the statewide availability of veterans has decreased a little since last year. Therefore, FCI decides to adopt as its hiring benchmark its 9% applicant pool ratio, rather than its previous year’s hiring ratio of 10%.