3.03.2009

Utilization and Availability


For the past three years, my firm has produced a Disparity Study for the City of Philadelphia. A Disparity Study looks at the utilization of businesses owned by minority, women, and disabled entrepreneurs, in contracting opportunities, versus their availability: disparity = utilization divided by availability. A disparity ratio of less than 1 means under-utilization - utilization rates are lower than availability rates - while a disparity ratio of greater than 1 means over-utilization - utilization rates are higher than availability rates.

Looking at both utilization and availability is important for two related reasons. Let's say Hispanics received 5 percent of professional service contracts in a particular jurisdiction. If Hispanics represent 40 percent of the population in that jurisdiction, the easy response is to say that 5 percent utilization is way too low. But what if Hispanics represent only 1 percent of professional service providers in the jurisdiction? (In other words, utilization is five times availability.) So the twofold take-away is: 1) the fact that Hispanics are 40 percent of the population and 5 percent of professional service contracts is not the problem, and 2) the real problem in need of fixing is that Hispanics are only 1 percent of professional service providers.

Unfortunately, people tend to focus solely on utilization rates that seem unfairly low, and thus push the powers that be to directly up those utilization rates. Or, another set of people might look at the numbers above and, seeing a disparity ratio of 5, pat themselves on the back for having achieved "over-utilization." A "disparity" analysis rightly brings the notion of "availability" into the conversation. So now the policy push is about more than "hey, government; give more contracts to minorities, women, and the disabled"; in addition, it's about "hey, government; work with the private sector to create an environment in which more minority, women, and disabled owned firms exist in the first place."

Furthermore, this concept applies to other fields outside of contracting opportunities, such as coaching positions and philanthropic endeavors. Let's be clear: inequities of opportunity on the basis of race, gender, and physical ability are tough topics to talk about and tough nuts to crack, but a broader discussion that looks at both utilization and availability is a more constructive way in the long run to make things better. Let's not settle for either "fixing inequities is too hard to try" or "all we have to do is force decision-makers to pick more of whoever they're not picking enough of now," but rather let's treat this as the important goal that it is and press towards "how can we work together to increase both the use of under-used groups AND the pool from which we'd draw such candidates in the first place."
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