What is adverse impact in hiring, and how do you test for it in your selection process?

[Eleni]

Our TA team is reviewing our screening process and wants to check if any steps are creating adverse impact. Adverse impact occurs when a neutral employment practice — like a test or screening criteria — disproportionately excludes members of a protected group at a higher rate than others. The 4/5ths rule is commonly used to flag potential issues. How does your team audit for this, and what tools or methods have been most practical?

 

[wellow]

Adverse impact in hiring occurs when a selection process disproportionately disadvantages a protected group, even if unintentionally. It is tested by comparing selection rates between groups, often using the four-fifths rule or statistical tests. If one group’s hiring rate is less than 80% of the highest group, adverse impact may exist.