HR & recruitment glossary

Adverse impact

Definition

Adverse impact is when a hiring step rejects one protected group at a noticeably higher rate than another. It is often tested with the four-fifths rule and is a key check for any automated screening tool.

Adverse impact describes the outcome of a hiring step, not the intent behind it. A CV filter, knockout question or assessment can have adverse impact even when nobody meant to treat any group differently. To check, compare selection rates: if one group's pass rate is below 80% of the highest group's rate, the step needs review.

It matters most for automated screening, because a tool applies the same rule to every applicant and repeats any bias at scale. Asking every candidate the same job-relevant questions, scoring them to a shared rubric and keeping a person in charge of every decision all help keep it in check.

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