During a recent webinar demoing our new Talent Decisions module, we received a trio of audience questions that we feel cut to the heart of analysis best practices in the new era of anti-discrimination enforcement. In this article, Senior Solutions Consultant Roy Zambonino explores how frequently adverse impact analysis should be deployed, what to do when adverse impact is discovered, and how to apply this type of analysis across a range of workforce issues.
Q: How Frequently Should Leadership Review Adverse Impact Analysis Results to Support Strategic Workforce Planning?
Organizations should perform analysis once a year at a minimum. This maintains the cadence federal contractors had before the rescission of Executive Order 11246—the annual requirement to produce affirmative action plans for females and minorities. Absent of the requirement to create those plans, continuing to run similar checks at least once a year is going to give you a necessary safety check and much-needed insight into any potential issues that you need to address.
However, in keeping with the advice we gave well before the rescission, we would actually recommend that organizations perform this analysis more than once a year. Particularly, if you know there are going to be certain changes in your organization’s processes, you should perform an adverse impact analysis both before and after implementation. Typical scenarios could include:
- Planning to implement AI into some aspect of your selection process
- Expecting a huge increase in the number of selections, such as when you embark on a major hiring push
- Intending to acquire other organizations or undergoing any other form of reorganization
- Making any other changes to the way you select people for certain positions
Any time you add data from other HRISs, consolidate companies, or use new technologies or tactics in your overall process, there’s always the potential for issues to arise. Performing an adverse impact analysis early ensures that any issues introduced never get the opportunity to become much larger problems down the road.
When we used to have the “luxury” of having OFCCP conduct audits—or rather, when there was the fear that you would get audited—federal contractors did these analyses proactively. But now that’s gone, it’s really on organizations to understand the value of analysis and keep on top of it.
The reality is that there’s arguably more risk now that the jurisdiction of the OFCCP has been greatly reduced, and the EEOC and other agencies are less interested in checking disparate impact. In the absence of this attention, cases are going straight to federal court, with the greater risk and severity that entails.
Reviving the annual analysis cadence and proactively performing checks before and after major changes to your talent process is easier with software and services in your corner, and Talent Decisions is really built for this new era of workforce analysis. There were advantages to adverse impact analysis being a federal requirement, but there are also opportunities to focus on additional groups and aspects of your business now that the requirement has gone.
LEARN ABOUT AI BIAS COUNTERMEASURES | ‘A 4-Step Approach to Performing an AI Bias Audit’
Q: What Steps Should We Take When an Adverse Impact Analysis Reveals Potential Adverse Impact? What’s the Expected Response?
So if we imagine you’re using the Talent Decisions tool, you run an adverse impact analysis on hires, and you discover potential adverse impact in one of your positions (falling outside of the traditional two standard deviations check), what do you do?
Firstly, it’s always important to remember that discovering indicators doesn’t necessarily mean that you’ve definitely got an underlying problem. It’s a strong signal that a deeper investigation is necessary, and Talent Decisions would allow you to easily run a steps analysis to find where people get left behind in your selection process.
Perhaps it’s an assessment test, an initial AI phone screening, an in-person interview: the steps analysis will help you pin down what’s happening at each step, for each job, for each class (whether that’s along race, sex, or other lines). And wherever there’s adverse impact, you’ll have to consider whether there could be a valid, job-related, and non-discriminatory basis for that.
For example, if the job is physically demanding and/or in a remote location—perhaps for an engineer working on an oil rig out in the middle of the Gulf, where you may require people to work six weeks at a time away from the mainland—your position may be innately attractive only to some groups over others. In scenarios like this, adverse indicators may not reflect your valid efforts to get everybody, because only certain people apply.
If you can rationalize instances of adverse impact for these types of reasons, and provided that you’re documenting these rationales, your organization should be fine. We would recommend validating anything of this nature that comes up with your attorney, and this goes for the tools and tests that you use also—validate and periodically revalidate anything you use to make decisions, because you have to make defensible judgments, and over time your requirements may change.
If those rationalizations aren’t there, there may be some corrective action to take. And once that’s done, you have to make sure you monitor effectiveness, re-run those selection analyses, ensure they had the intended effect, and go back and re-evaluate if necessary.
A REFRESHER ON CURRENT BEST PRACTICES | ‘Workforce Compliance in 2026: The Strategies Required to Thrive’
Q: How Do Adverse Impact Analysis Findings Integrate With Broader Workforce Analytics or Equity and Inclusion Initiatives?
As you’ve probably surmised by now, adverse impact analysis is an analytical tool that provides a continuous feedback loop. You run the analysis, you do the investigation, you correct the issues, and you monitor.
And by entering into this process, adverse impact analysis gives your internal teams the concrete information they need to raise these issues with managers, recruiters, and senior leaders. On the whole, it’s easier to get things on the agenda when you have data-driven insights and can specify not only where exactly the issue is situated, but how it may be corrected and the process changes that you’re asking them to get behind.
When it comes to better workforce management, selection analysis is an integral part of your toolbox, alongside a broader set of tools—including compensation analysis and workforce analytics—that you need to have access to and integrated into your overall workforce strategy.
Considering the current hostile environment, adverse impact analysis certainly has a role to play in organizations maintaining diversity, equity, and inclusion (DEI) initiatives (or programs under different names with similar characteristics). In addition to continuing to help you understand the positive impacts your programs have, adverse impact analysis has a defensive role to play. If federal agencies or private plaintiffs accuse you of practicing “illegal DEI” and giving preferential treatment to certain groups, you need to be able to refute those claims with statistical evidence of the lack of harm.
Remember that adverse impact isn’t just for analyzing external talent coming into the organizations: it’s also useful for analyzing the mobility of your current workforce. Are people being promoted through the organization? Are there opportunities to advance? Analysis will quickly give you insight into whether there are any blockers or impediments to this kind of movement. It’s similarly valuable for better understanding the reasons for certain terminations—are they inevitable, or is critical talent and knowledge leaving the business for preventable reasons?
So these types of analyses are going to give you insight into where you need to focus your attention. HR practitioners typically wear multiple hats, so knowing where your time is most effectively spent is always valuable.
THE CONTINUED RELEVANCE OF ADVERSE IMPACT ANALYSIS | ‘6 Reasons Companies Should Still Conduct Adverse Impact Analysis’
Talent Decisions: Software for the Current Era of Anti-Discrimination Enforcement
Talent Decisions is a new software module for running adverse impact, hiring steps, and RIF analyses. It moves away from the rigid 11246 structure of job group, job title, and requisition IDs, and allows you to define your own advanced grouping variables.
Stop relying on reactive, time-consuming manual audits that lack the statistical rigor needed to defend against discrimination claims: Talent Decisions is focused on helping you go beyond compliance and proactively evaluate and defend hiring, promotion, and termination decisions.
To learn more, please contact us today or speak to your Affirmity account manager.
About the Author
Roy Zambonino is a senior solutions consultant at Affirmity. He is responsible for demonstrating and discussing Affirmity’s wide range of software, consulting services, and digital learning solutions with existing and prospective clients.
As a former project manager, Mr. Zambonino is able to draw upon the best practices he’s observed over the last 29+ years, helping prepare and implement programs. This work has involved companies ranging in size from a few hundred to several hundreds of thousands of employees, and spans across many industries, including retail, construction, healthcare, banking, and finance. Mr. Zambonino has a Bachelor’s and Master’s degree in Business Administration.