The preservation of institutional knowledge can mean the difference between a finding of discrimination and a finding of no violation in an OFCCP audit. Institutional knowledge can tell you how and why a particular situation exists. For example, suppose Jennifer, a widget designer, is among the last hires in a down market 2010. The entire widget designer staff is shortly thereafter subject to a pay freeze and the company institutes a hiring freeze. This results in Jennifer’s pay staying at the original $30 an hour rate, the market rate at her time of hire. The hiring freeze is lifted in 2012 before the pay freeze is lifted. John is hired as one of the first new widget designer hires in 2012. The market rate when John is hired is $35 an hour. The compensation snapshot (the compensation situation on a given day) for the OFCCP audit shows the less experienced John making more money than the longer tenured and more experienced Jennifer.
Institutional knowledge would be all the information about the pay freeze, the hiring freeze, the market rates, and how others similar to Jennifer were paid when they came on board in 2010, etc. If there is no institutional knowledge, none of this information is available at the time of the audit. In the absence of institution