‹  Back to Blog

Adverse Impact: What It Is and How to Avoid It

As a recruiter, you’re well aware of the fact that you’re not supposed to overtly discriminate against job applicants based on factors like race, religion, national origin, disability, age, or sex. However, what you may not know is that your company may have practices that are unintentionally discriminatory because they create an adverse impact on members of legally protected groups.

Adverse impact occurs when an organization’s policies and practices inadvertently create a negative effect on a protected group of people that is disproportionate to those who are not members of this group. The result of this is just as serious as intentional bias and it can lead to a group of people being treated unfairly. For example, a company that requires that one group of job applicants take a drug test, but doesn’t expect other types of potential hires to do the same, is discriminating against that group. Similarly, when an organization arbitrarily requires that candidates for a specific position have a certain number of years of experience, this can lead to age discrimination for younger people who have less than the required amount, as well as older workers who have more experience.

Adverse impact does not only occur during the hiring process: Practices and policies that deal with everything from hiring to training to promotions to layoffs can result in a discriminatory environment. Even if the bias created by adverse impact is not intentional, that doesn’t mean an organization cannot face liability for discrimination as a result of it. In order to avoid this problem, organizations can take the following steps to ensure that all groups of people are being treated fairly throughout the hiring process, as well as after they have been hired.

How To Avoid Adverse Impact


1. Review job requirements. 

To ensure that hires are being chosen based solely on their qualifications and not based on subconscious bias, recruiters should review job descriptions and requirements that they expect of candidates. If requirements are not all directly related to the duties of the position, there is a chance that adverse impact may occur.

2. Train management on adverse impact and unconscious bias

Everyone who is evaluating job applicants should be aware of adverse impact and the unconscious biases that may influence their hiring decisions—as well as how they may impact decisions about promotions, raises, and layoffs. It is important for everyone in a leadership role in your organization to be educated about these issues and how to prevent them.

3. Look at your hiring process

Throughout the hiring process, you should be able to document why you chose certain candidates over others and make a strong case for shortlisting them when you evaluated their applications. These decisions should be made entirely on merit, and if they weren’t, re-examine your recruiting and hiring process to ensure that your organization can’t be accused of discrimination. A similar process should also be used when giving current workers raises and promotions.

4. Evaluate your current workforce

Were all of your workers hired based on merit? One way to gauge this is by evaluating your current workforce regularly to ensure that they are performing in their jobs the way they should be based on job-related criteria. If they aren’t, the organization should look at its hiring practices to determine if subpar employees may have been chosen based on factors unrelated to their capabilities.

5. Create inclusive job advertisements

When drafting job advertisements, are you using inclusive language that lets the community know that your organization is dedicated to diversity? Be sure to review your job descriptions closely and use language that demonstrates to potential candidates that everyone with the right skills and experience is welcome and encouraged to apply.

6. Use blind resume reviews

When reviewing resumes for a specific position, you can use a blind process that will remove personal information from the resumes—like names, locations, and the college applicants attended—so that you are making a shortlist of candidates to interview entirely based on how closely their experience matches the qualifications for the job. This process goes a long way toward reducing unconscious bias and increasing diversity in your hiring.

7. Adopt a structured interview process. 

Interviews should elicit information that is relevant to a position, and not invite the possibility of adverse impact. In order to do this, create an interview guide to instruct hiring managers on how to conduct a structured interview with standardized questions and a ranking system that is used for all candidates. This will allow all candidates to be judged based on the same job-relevant criteria.

While your organization may make a concerted effort to avoid bias in hiring, it’s important to understand the subconscious biases that may creep into the process that you may not be aware of. By educating yourself, and all of the leadership in your company, about adverse impact, you can avoid liability and build a truly diverse and inclusive workplace.

Hundreds of company partners are using our platform to connect, source, and engage top underrepresented talent, and even more are already a part of our Communities.

JP Morgan

Stop setting diversity goals.
Start meeting them.

Join hundreds of businesses, from startups to Fortune 500 companies, using our platform to build diverse teams
See it in action