What is adverse impact?

Adverse impact refers to the negative effects that a policy, practice, or procedure may have on a particular group of individuals. This concept is often used in the context of employment discrimination, where certain hiring or promotion practices may disproportionately disadvantage individuals from a protected group, such as race, gender, age, or disability status.

Adverse impact can occur unintentionally, as a result of seemingly neutral policies or practices that have a disparate impact on certain groups. For example, a requirement for all job applicants to have a driver's license may disproportionately exclude individuals with disabilities who are unable to drive.

Employers are legally prohibited from using practices that have a discriminatory impact on protected groups, unless they can demonstrate that such practices are job-related and necessary for the business. Failure to address adverse impact can result in costly lawsuits, damage to the organization's reputation, and a loss of talented employees.

To mitigate adverse impact, organizations can conduct regular audits of their hiring and promotion practices, ensure that selection criteria are job-related and supported by valid evidence, and provide training to hiring managers and HR professionals on diversity, equity, and inclusion.