How to avoid adverse impact in your pre-employment process

Whether you’re reviewing CVs manually, using pre employment assessments or introducing AI into your hiring process, one risk remains the same: you could be unintentionally filtering out talented candidates from particular groups.

That’s called adverse impact.

Adverse impact happens because seemingly reasonable hiring decisions create unequal outcomes that nobody notices until the data is analysed.

That’s what adverse impact measures.

Crucially, adverse impact isn’t just an AI problem.

It can emerge anywhere in the hiring process:

• A recruiter unconsciously favouring CVs from certain universities.
• An aptitude test that disadvantages candidates with disabilities because it wasn’t designed with accessibility in mind.
• An AI screening tool that learns historical hiring patterns and unintentionally reproduces existing bias.

In 2026, this has become an even bigger issue. High profile legal cases against AI recruitment technology providers, including the ongoing Workday litigation in the US, have reinforced an important point: organisations remain responsible for the fairness of their hiring process, regardless of whether decisions are made by recruiters, assessments or algorithms.

The good news is that adverse impact isn’t inevitable. Whether you’re reviewing CVs manually, using psychometric assessments or adopting AI, adverse impact can be measured, monitored and reduced through better hiring design.

In this guide you’ll learn:

• what adverse impact is
• how it differs from disparate treatment
• how to calculate adverse impact using the Four Fifths Rule
• common examples in recruitment
• how to identify adverse impact in your own hiring process
• practical ways ThriveMap’s Realistic Job Assessments reduce adverse impact while improving hiring quality.

Hiring stage	Example of how adverse impact can occur
CV screening	Recruiters consistently favour candidates from prestigious universities, reducing progression rates for equally qualified applicants from other backgrounds.
Online assessments	A timed cognitive test unintentionally disadvantages candidates with certain disabilities because reasonable adjustments aren’t built in.
Interviews	Different interviewers ask different questions and score candidates inconsistently, introducing subjectivity.
AI screening	An AI model trained on historical hiring data learns patterns that disproportionately reject candidates from protected groups, despite no intention to discriminate.

Diverse teams are 35% more likely to outperform competitors, are 87% better at making decisions, and have 19% higher rates of innovation.

However, despite efforts to appear inclusive, adverse impact often undermines hiring processes, hindering the chances of certain groups.

Discover how addressing adverse impact can lead to fairer recruitment practices and unlock numerous benefits for your business.

What is adverse impact?

Adverse impact, sometimes known as disparate impact, is when a practice, policy or decision subconsciously impacts a certain group in a negative way. It can be manifested in many different employment practices, such as interviews, promotions, layoffs, background checks, training, and pre-employment assessments.

In recruiting, an adverse impact is a form of hiring discrimination that is indirect and can be ingrained into a hiring process. Often, it’s a classic second-order effect, where we solve one problem but end up unintentionally creating another one that’s often even worse. It can therefore go unnoticed, but nevertheless can seriously limit opportunities for certain protected groups.

Some examples include:

• Offering only full-time positions
• Requiring fluency in a language where proficiency is not essential
• Educational requirements
• Ineffective employment testing, such as cognitive ability tests that are not job relevant
• Age / geographical / physical requirements

In 2026, adverse impact has become one of the defining issues in recruitment technology. While AI has the potential to make hiring faster and more consistent, poorly designed or poorly governed AI screening tools can unintentionally amplify existing patterns of discrimination by learning from biased historical data or relying on proxies that disadvantage certain groups.

As employers adopt AI powered screening tools, regulators are paying closer attention to whether these systems create discriminatory outcomes. In the US, the EEOC has issued guidance on adverse impact in algorithmic hiring, New York City’s Local Law 144 requires bias audits and candidate notices for certain automated employment decision tools, and new laws in Illinois and Colorado place greater emphasis on preventing algorithmic discrimination.

The question is no longer simply whether organisations use AI in hiring. It is whether those tools can demonstrate fair, job relevant and evidence based decision making.

However, AI is not inherently the problem. When designed around job relevant evidence rather than CVs, educational pedigree or subjective judgements, AI can help reduce adverse impact. ThriveMap’s automated screening takes this approach by assessing candidates against the realities of the job itself, helping employers make more consistent decisions while reducing reliance on traditional screening methods that are more likely to introduce bias.

Why is avoiding adverse impact important?

Adverse impact is often a result of systematic discrimination either within a company or, on a larger scale, society. As a recruitment professional, it is extremely important that you are hyper-conscious of any underlying discrimination in your hiring practices.

Read more about reducing hiring discrimination here. 

There are many reasons why you should try your best to avoid adverse impact. First and foremost, any form of discrimination is an unethical practice for any organisation, and it can negatively impact your company’s work culture. Regardless of race, gender or class, everyone deserves equal opportunities for job positions within your company.

Avoiding disparate impact in your recruitment process is also important for legal reasons. Hiring discrimination lawsuits can be costly, time-consuming, and devastating to your company’s reputation. The EEOC (the US Equal Employment Opportunity Commission) is responsible for investigating cases of potential discrimination by ensuring that companies’ hiring processes are in line with the Uniform Guidelines on Employee Selection Procedures. Being compliant with the Uniform Guidelines, plus any local laws is the best way to support legal defensibility for your company.

From a business perspective, avoiding disparate impact can also improve diversity in your workplace. Diversity recruiting is a great way to gain different perspectives on problem-solving and improve organisational work culture. If your hiring process is being affected by it you could be unwillingly preventing your company from reaching its maximum potential.

7 steps to minimise adverse impact

Here are a few strategies to avoid discrimination in your recruitment process:

1. 1. Define the job position objectively

It is important when hiring to analyse the job position as objectively as possible. Define what criteria is absolutely essential for the candidate to have for the role.

Focusing solely on the required skills and abilities needed for the role will assist you in having a diverse applicant pool to choose from. Having criteria in your job descriptions that aren’t directly linked to the role itself will make you susceptible to adverse impact. 

2. 2. Keep the ⅘ rule in mind

The ⅘ rule is a general rule of thumb in avoiding adverse impact. The rule states that if the selection rate of a certain group is at least 80% less than the selection rate for the highest group, then disparate impact may be affecting the selection process. While the EEOC does not use the ⅘ rule as an objective standard, it is a strong indicator of whether or not your company is subconsciously discriminating against a given group.

3. 3. Use technology for blind candidate selection 

If your company collects demographic data from your applicants, such as race, sex or ethnicity, or if it’s self-evident from resumes then use software to remove this data. 

4. 4. Evaluate your candidate assessments

As a recruitment professional, you must examine your pre-employment assessments in terms of disparate impact. Your assessments should be tailored in such a way that all demographic groups are equally capable of scoring well on the test. Keep in mind that different groups have different backgrounds and different ways of thinking, so your assessment should not favour one way of thinking over another.

Assessments that ask the candidate to explain how they would solve problems or act in situations at work are often really useful as they illustrate exactly how the candidate would act in the role. These are called realistic job assessments and they are useful in removing hiring bias.

Find out how you can use ThriveMap to develop your own Realistic Job Assessments

5. 5. Collect data 

Collect data from every process so that you can evaluate your practices. Analyse the type of applicants you are reaching, receiving, and taking forward. Use this data to ensure you are reaching a diverse audience. You can also use this data to track how applicants are doing at each stage of your recruitment process and use the ⅘ rule to ensure there is no disparate impact along the way. If a certain group of applicants are being significantly lost in certain stages, you must investigate this and find out why.

6. 6. Keep records

It’s best to keep a digital record of every applicant you have had in your recruitment funnel and why you did or didn’t advance them in the recruitment process. This will help you evaluate the effectiveness of each step and see if any stage is vulnerable to discrimination. These records will be valuable in self-evaluation, but they will also provide you with evidence if you are ever challenged on your practices.

7. 7. Standardise your hiring process.

We are all naturally drawn to people who are similar to us, but this tendency can lead to unconscious bias in recruitment.

Hiring managers (and assessors in assessment centres) should be trained in equal opportunities, diversity, employment law, and interviewing skills to overcome any unconscious biases that may occur in the recruitment process. Interviewers should ask structured, competency-based questions to avoid any unethical or illegal questions from being asked. Using a standardised, structured hiring process will promote a more objective recruitment mindset.

Closing

The most diverse companies in the world are also some of the most successful. Not only does a diverse group of employees lead to thriving work cultures, but they can bring a wide variety of perspectives that will ultimately lead your company to success. Though it may be unintentional, adverse impact can have a catastrophic effect on a company, so be sure to take the necessary precautions to ensure you have an inclusive recruitment strategy!

Want help constructing a more inclusive recruitment plan for your business? Request a demo and learn more about how ThriveMap can improve your company’s recruitment strategy!

What’s the best way to reduce adverse impact in recruitment in 2026?

Many traditional hiring assessments measure abstract abilities, personality traits or qualifications that may only have a weak relationship with success in the role. The further an assessment moves away from the realities of the job, the greater the risk that it introduces unnecessary barriers for some candidates.

Realistic job assessments take a different approach. Instead of asking candidates to complete generic tests, they evaluate how someone is likely to perform the work they’ll actually be hired to do. Every applicant completes the same job relevant scenarios, creating a more consistent and objective basis for comparison.

This also makes the assessment easier to justify. Rather than explaining why candidates were rejected based on a personality profile or generic aptitude score, employers can demonstrate that hiring decisions were based on behaviours that are genuinely required to perform the role successfully.

This philosophy sits at the heart of ThriveMap. Every assessment begins with a detailed job analysis before being built around realistic work scenarios, ensuring employers assess candidates against the realities of the role rather than assumptions or generic benchmarks. That not only helps reduce unnecessary adverse impact, but also improves quality of hire, candidate experience and early retention.

How can employers demonstrate that their hiring process is fair?

Rather than relying on generic assessment providers that offer the same test for every role, employers should look for hiring tools that can demonstrate clear job relevance, provide structured evidence of candidate performance and support ongoing adverse impact analysis.

ThriveMap was designed around this principle. Every assessment is created from a role specific job analysis, giving employers clear evidence of why each exercise exists and how it relates to success in the role. Combined with structured scoring and candidate level reporting, this creates a much stronger evidence base than generic screening methods.

Can AI reduce adverse impact?

AI is often presented as either the solution to bias or the cause of it. In reality, it’s neither.

AI reflects the hiring process it’s built on. If it’s evaluating characteristics that aren’t genuinely related to success in the role, it can reinforce poor hiring decisions. But when AI is applied to structured, job relevant assessments, it can improve consistency by evaluating every candidate against the same objective criteria.

That’s why ThriveMap starts with job analysis, not AI. Every assessment is designed around the realities of the role before AI is used to help deliver a more consistent, scalable and evidence based hiring process