Understanding Adverse Impact in Hiring and How to Avoid It

When it comes to hiring, there are a whole lot of “do this and not that”. While hiring and recruitment strategies can—and should—be specific to roles and industries, there are a few universal things to keep in mind. One such area? Avoiding adverse impact. 

What Is Adverse Impact?

In order to understand how to properly avoid adverse impact in your hiring practices, you must first understand what exactly it is. Let’s take a look at the adverse impact definition. 

Generally speaking, adverse impact is the impact from any employment practice that may appear neutral but that actually has a disproportionately negative effect—specifically on a protected group. According to the Equal Employment Opportunity Commission (EEOC) in the U.S., adverse impact is “a substantially different rate of selection in hiring, promotion or other employment decision which works to the disadvantage of members of a race, sex, or ethnic group.”

One commonly used example of adverse impact is conducting background checks for only some groups of applicants and not others. It’s important to keep in mind that adverse impact can happen at any stage of the employment process—from hiring and recruitment to workplace procedures to career development and growth.

How To Avoid It When Hiring

Now that you have a grasp of the adverse impact definition, let’s dive deeper into the important topic of how to avoid it when you are hiring. 

There are several different tactics you can employ to avoid adverse impact in your hiring, including the following three key strategies. 

Broaden and include. Before you begin your hiring process, ensure that the job title and description for the role you are posting are inclusive—and from there, make sure you have a strategy for reaching a broad group of qualified candidates. To ensure you are reaching the broadest group of qualified candidates in the most efficient way, you may want to consider programmatic recruiting software such as pandoIQ, which is able to effectively categorize and place your job ads across both major and niche online job boards. Starting off your recruitment process from an inclusive place is important for minimizing any adverse impact as you move through hiring. 

Make modern technology work for you. The rise in the variety of recruitment technology has meant a lot of improvements for recruiters not just in productivity, but also in their ability to strip out human bias. This is particularly important when it comes to avoiding adverse impact. Smart technology will only be looking for those candidates who fit your qualifications. That way, every candidate has the same experience at the start of the hiring process, ensuring they are on equal footing as they move into interviews. You can employ technology to help with initial screening (or even outreach, through tools like AI-enabled chatbots) to standardize the beginning of the hiring process for all. 

Standardize where you can. Once real-life employees get involved, it may seem more difficult to standardize your hiring process—but it’s important to make the effort. The more you can standardize across the interview and evaluation process (such as with interviewing scorecards), the less likely you are to run into adverse impact. That’s because the more you can quantify, the less likely you are to rely on qualitative judgments. 

Avoiding adverse impact is important for building a diverse and inclusive organization—and taking advantage of modern technology helps make it that much easier. 

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