Nonprofits Should Keep Tracking Workforce Data, Even If EEO-1 Race and Sex Reporting Ends

In July, the Equal Employment Opportunity Commission (EEOC) proposed rolling back EEO-1 reporting requirements that require certain employers to report workforce data by job category, sex, and race or ethnicity.

Authorized under Title VII of the Civil Rights Act, EEO-1 reporting was designed to do more than create a record of workforce demographics. The data was used to identify employment patterns and support discrimination investigations. But beyond the government mandate, tracking the data is only the first step for employers.

“[W]orkforce data by race and gender helps leaders understand whether people are being hired, developed, promoted, retained, and supported fairly,” said Laurie Henneborn, Vice President of Research, Insight & Solutions at Catalyst, a global nonprofit focused on women’s advancement and inclusion.

At Catalyst, workforce measurement like this is viewed as an accountability issue, not a legal-compliance exercise. By gathering this data, employers can evaluate their internal systems and identify where barriers may be affecting employees.

For nonprofits, this is especially important.

“Nonprofits are built on trust,” Henneborn told NPQ. “They ask employees, funders, partners, and communities to believe in a mission that often centers fairness, opportunity, and public benefit. That credibility depends not only on what an organization says externally, but also on what it can see and improve internally.”

Even if the federal reporting mandate is ultimately removed, Henneborn argues that nonprofits—and business leaders in general—should continue measuring workforce data as a matter of leadership and accountability. 

What Does This Mean Legally?

Vague language and an aggressive anti-DEI agenda from the Trump administration muddy the waters when organizations are deciding how to approach inclusion-related policies and programs. Even if the proposed rule takes effect, halting the collection of workforce data is not necessarily the smart—or legal—move.

“Losing a filing requirement does not erase the underlying law,” explained Jared Pope, benefits and employment law attorney and CEO of Work Shield, a workplace misconduct management company focused on harassment, discrimination, and retaliation.

If the EEOC proposal goes through, Title VII will continue to prohibit employment discrimination based on race, color, religion, sex, and national origin. Eliminating the reporting requirement doesn’t change that law.

Pope also reminds business leaders that the federal requirement isn’t necessarily the only one, citing state demographic reporting requirements with different workforce-size thresholds than EEO-1.

Furthermore, Pope notes that the underlying obligation is different from reporting the numbers: “Employers have generally been free to collect and study their own workforce data by race and gender for internal purposes, and that has not changed.”

He stressed that Title VII was never about simply filing a form, but about whether an employer was discriminating against workers. “Take away the report and the exposure for discrimination sits exactly where it sat the day before,” he said.

“A nonprofit that studies its own data to find a problem is doing exactly what a well-run organization should do,” he continued. “A nonprofit that lets those categories drive an actual decision about a person is playing with fire, no matter what the EEOC does with its own reporting form.

That distinction doesn’t make the data any less useful. It changes what leaders should use it for.

“The goal is to understand where systems are working, where barriers persist, and how to create workplaces where women and employees from historically underrepresented groups can contribute, grow, and advance,” Henneborn told NPQ. 

Why Workforce Data Still Matters

Nonprofit leaders can’t evaluate internal processes and systems without data. A change in reporting requirements doesn’t eliminate the need for evidence when making important organizational decisions.

“If the federal government ultimately eliminates EEO-1 and related demographic reporting requirements, nonprofits should not treat that as permission to stop paying attention or confuse it with an order that prevents the collection of this information,” said Henneborn.

“It is about using evidence to see where opportunities are expanding, where barriers persist, and whether all talent has a fair path to contribute and advance,” Henneborn added.

“If a federal reporting requirement goes away, the leadership responsibility does not. Nonprofits still need workforce data to understand whether their own systems are living up to their mission.”

For employers, this evidence can lead to better decision-making when it comes to hiring and developing talent. As Henneborn noted, it can show employees that inclusion is more than language. Workforce data can help leaders identify potential bias in the systems that shape who gets hired, promoted, and moves into leadership roles.

The importance of addressing bias in workplace systems was reflected in a recent Catalyst survey. Among employees and leaders surveyed, 40 percent said future inclusion efforts should focus on removing bias from systems, including recruitment, mentorship, and promotion.

For nonprofits, workforce data also matters to funders, boards, and communities because it can show whether internal practices reflect the values the organization promotes publicly.

“Workforce data helps leaders test whether those values are showing up inside the organization,” said Henneborn. “Without that data, leaders may lose visibility into the barriers affecting women and employees from historically underrepresented racial and ethnic groups.”

Losing the reporting requirement changes what employers have to submit to the federal government, but it doesn’t change what nonprofits can learn from the data. This information can reveal disparities and help leaders figure out what’s driving them.

Turning Workforce Data into Action

To fully utilize this workforce data to optimize processes and root out bias, Henneborn recommends examining the systems that shape who enters and leaves the organization, and who advances within it. Those systems include “hiring and selection, performance evaluation, promotion and advancement, pay and compensation, development opportunities, retention and exits, and leadership representation.”

This is a three-step process. The first step, as Henneborn points out, is to “audit the system.” “Ask where decisions are being made, what criteria are being used, and whether outcomes differ by race or gender,” Henneborn said. “Second, redesign the process so decisions rely less on informal networks or ‘gut feel’ and more on clear criteria, structure, and accountability. Third, measure whether the redesign is improving outcomes over time.”

“A nonprofit that studies its own data to find a problem is doing exactly what a well-run organization should do.”

This is not a one-time exercise, but something that should be repeated regularly to see whether disparities persist and whether changes are working. Finding a racial or gender disparity in the data is a starting point. Henneborn added that it should be treated as a signal to understand where the disparity is showing up and what system may be producing it.

Employee experience also matters, she noted to NPQ. This includes whether employees feel they are treated fairly, included, and supported at work. While representation data can show where disparities exist, employee experience can help explain what’s behind them.

Henneborn recommends that human resources, senior leadership, and legal counsel, as appropriate, review the data regularly and use what they find to guide action. That means looking beyond the disparity itself to the workplace practices and conditions that may be contributing to it.

Once a disparity is identified, leaders should validate the data, listen to employees, examine the relevant decision points, and make changes where needed. When legal questions arise, leaders should work with counsel.

“But they should not use uncertainty as a reason to stop looking,” Henneborn said.

The EEOC has scheduled a public hearing on the proposal for August 11, and public comments are due by August 24. The agency will consider those comments before making a final determination.

Whatever the EEOC decides, Henneborn stressed that understanding what’s happening inside an organization remains the responsibility of its leaders: “If a federal reporting requirement goes away, the leadership responsibility does not. Nonprofits still need workforce data to understand whether their own systems are living up to their mission.”