Adverse Impact

Adverse Impact occurs when a neutral employment practice unintentionally excludes a protected group at a substantially higher rate than others. Employers measure adverse impact to keep hiring, promotion and selection fair and legally compliant.

What is Adverse Impact

Adverse impact, sometimes called disparate impact, focuses on outcomes rather than intent. A policy can be neutral on its face yet produce unequal results for groups protected by law. Identifying adverse impact helps organisations correct biased outcomes.

How Does it Work

HR professionals compare selection rates across groups and may use the four fifths rule as an initial screen. If a protected group's selection rate is less than 80 percent of the highest group's rate, the practice may warrant further analysis and validation.

Practical Usage in HR

Adverse impact analysis is used in recruitment, assessment design, promotion decisions and workforce planning. Typical scenarios include:

• Screening job tests that unintentionally disadvantage certain demographic groups
• Automated resume filters producing lower selection rates for a protected group
• Promotion criteria that correlate with tenure and indirectly affect diversity

Related HR Concepts

Related terms include disparate treatment, validation studies, selection rate, affirmative action and EEOC compliance. These concepts together guide legally defensible and fair HR practices.

Adverse impact highlights outcome differences so organisations can act to reduce unfair barriers.