Adverse impact is a controversial topic in many circles. But it shouldn't be. It is a concept that protects everyone in the United States from both deliberate and accidental bias in hiring and promotion. Here is an example:
You live in a medium-sized town on the west coast. You graduate from your state college with a 3.5 GPA and a few internships under your belt, so you decide to get a job as a legal assistant and apply to get into law school. You finish in the top 10% of your class at a second-tier school. But then something strange happens: despite your solid grades, work experience, and sunny personality, you can't get an interview with any firms in your area. So you expand your search to several surrounding states.
Finally, you get two interviews at two relatively large firms (90+ attorneys employed by each). During the interview process, you notice something peculiar: despite the presence of many lawyers of every ethnicity in your region, there is only one partner across both firms that is NOT an Asian male. Even weirder, there are no non-Asian attorneys at either firm who are more than two years out of law school. Granted, your state has more Asians than average. On top of that, 40% of the licensed attorneys in your state are Asian. But that still doesn't fully explain what you encounter: you happen to know the typical demographics of the top 10% of each law school class in your region. Only 1 in 9 of the top students in each class is Asian, let alone male and Asian. So how did these firms become so male and Asian?
You decide to ask a friend of yours about what you’ve seen: an attorney who spent his first 4 years out of law school practicing at one of these firms. More specifically, you ask:
How it is that a region with so many non-Asian male lawyers could house two law firms where 70% of all the attorneys are Asian males, none of the non-Asian attorneys have been with either firm for more than two years, and only a single partner is not an Asian male?
Coincidentally (or not),your friend is also an Asian male. He gets a bit defensive when you ask about the demographics at his old firm, because he maintains close ties with some of the firm’s partners. He explains that everyone has an equal shot at being hired, but the hiring managers will only select first-year attorneys with whom they feel “comfortable”. He said many lawyers “aren’t a good fit” and “don’t give off a good vibe” compared to those who stay. He says the firms don’t have to fire too many attorneys, because those who “can’t hack it” soon depart on their own. He insists that neither firm would ever dream of rejecting an applicant due to their ethnic background. But he also indicates that many of the attorneys who spend longer than two years at the firm have “close family ties” with the partners, and many attended the same law schools. Their parents know each other, and frequently attend social gatherings together.
You might read the above example and think “So what? Maybe the guy just isn’t good enough to work for a private practice firm, so he had to settle for a government job.” If that’s what you think, you should probably stop reading this section right now. In fact, much of the information on this entire site will probably be lost on you...until you get caught in the middle of an EEOC lawsuit.
Others may surmise, “Well, getting a job these days is all about who you know. Everyone knows that. You have to network, network, network.” Fair enough…or so you assume. Did it ever occur to you that many people – people who are recent immigrants, people who don’t have any lawyers in their families already, people who grew up poor and had to fight to even go to college, and people who belong to ethnic groups who couldn’t even practice law in an integrated country until the 1970s – might be at a huge disadvantage when it comes to networking? Outside of career counselors, what connections are those people supposed to tap to get a foot in the door? Consider the fact that 18 of the USA’s 44 presidents went to Harvard, Yale, Columbia or Princeton as a small example of obstacles faced by 'outsiders'.
As a more common example, imagine that you are a minority just out of college. You got good grades, had some quality internships, and began to apply for jobs at some companies where most of the employees -- and all of the higher-ups -- went to Ivy-league schools. White applicants might have friends and families whose grandparents attended the same schools. But your own grandparents couldn’t have attended the school because it was against the law, or at the very least against the school's admissions policies. Even though some white applicants might suffer from the same lack of connections, people living in the United States are far more likely to be ‘unconnected’ if they belong to disadvantaged minority groups.
Even more frequently, simply being female can put you in the out group: many women aspiring to enter professions traditionally dominated by men face virtually the same obstacles.
It's important to remember that very often, adverse impact isn’t intentional. We've come a long way since Griggs vs. Duke Power and Albemarle vs. Moody. Organizations typically don't hold clandestine, nefarious plots to use their employment practices to deliberately treat various ethnic groups, women, and old people worse than they treat everyone else. The fictional law firm above isn’t tied to an Asian-supremacy movement. They didn’t make it their mission to discriminate against non-Asians at their firms.
But in the eyes of the law, the firm’s good intentions are irrelevant. Eventually, the EEOC could come knocking at their door…and the firm would probably lose a discrimination suit.
And frankly, they SHOULD lose. Not because Renegade Psychology is run by a bunch of anti-business bleeding hearts, but because that isn’t fair. America is supposed to be the land of opportunity. If you are qualified for a job, you should be considered for that job on the same playing field as everyone else. If a company consistently hires people for reasons unrelated to the person’s ability to perform successfully, they must be held accountable.
But why? you might ask. Why not just let the businesses who don’t hire the qualified people just suffer for their folly? Eventually, their competitors will force the discriminating firms out of business because they will scoop up all the talent the other firm doesn’t hire.
That’s a cute idea. It really is. It’s also nonsense. If the labor market were a logical market with rational actors – each of whom always acted in accordance with their best interests at all times – this would be true. But that ideal world doesn’t exist; if it did, segregation and employment discrimination would have ended in the United States as soon as slavery was abolished. But as we know, that didn't happen: segregation and hiring discrimination continued for another century.
In reality, many companies succeed on inertia alone: they were first to the marketplace, and there isn’t enough incentive for consumers to risk supporting a competitor. Some exist because they cornered a market and engaged in anti-competitive business practices that stifled competition. Others bought out their competitors, leaving few options. Still others patented the concepts and ideas that made them successful to such an extreme that nobody can compete with them without violating their patents and trademarks. At the most extreme end, some organizations simply drive regional competitors out of business, creating a monopoly for the goods they are selling and a monopsony (one buyer) for people looking for work.
Thus, the businesses that discriminate will not necessarily suffer – and the rejects won’t necessarily be able to “just find another job.” That get-up-and-go notion is cold comfort to a family that needs to keep their heat on and put food on the table, but faces constant application rejections from positions the parents were just as qualified for as those who got selected. I guess it was too bad they didn’t ‘know the right people.’
Imagine the above law firm scenario, but on a larger scale: played out across thousands of businesses across the United States. If economic actors were rational, the government wouldn’t have had to enforce desegregation using National Guard troops. Organizations would have embraced the ability to serve anyone with money, hire the very best regardless of skin color, and admit the very best students into their practices/schools/etc. But that didn’t happen, did it? And none of those dominant regional businesses would have suffered a great deal from new, less-racist competitors entering the market. Social pressure would discourage such businesses from forming or expanding their client bases (just as they had in the years leading up to the civil rights movement of the 1960s).
There are still many, many recruiters, hiring managers, factory floor managers, line managers, shop managers, directors, and executives who exhibit bias – both intentional and unintentional -- in their hiring and promotion decisions. It usually isn’t so extreme that a workplace is entirely composed of members of one race, one religion, one ethnicity, and the like. But it is often enough to deny employment opportunities to thousands of people per year. When this trend is compounded to several states and regions, it makes the country's job market as a whole far worse for certain segments of the population than it should be. This type of bias is also far more common that people seem to think it is. There are plenty of companies – even Fortune 500 companies – that had decades-long patterns of discrimination exposed in the late 20th and early 21st centuries. They all succeeded in spite of their reluctance to hire women and minorities to any positions of significance (or at all, in some cases).
This systemic issue runs contrary to the American dream of an unfettered meritocracy. Whether a person is white, yellow, brown, or magenta, each should be able to earn a living based on his or her ability to perform – and nothing else.
In case some readers believe anti-discrimination laws promote white male oppression, you should know that white males have won discrimination lawsuits against employers. This is a growing trend. Equal opportunity laws exist to protect everyone. When interpreted in a sane way, they actually do make sense.
This is why adverse impact matters. This is why companies should be concerned if certain demographic groups seem vastly underrepresented in their workforces. This is why many human capital professionals are so passionate about this field.
Adverse impact is not based upon the assumption that every group should have an outcome equal to every other group. Not so: adverse impact and related concepts exist so every group will have an equal opportunity to compete for a desired outcome.
You’d think these principles were a given to everyone who believes in true equality. Sadly, this perspective increasingly qualifies as renegade thinking. There is a common misconception that companies get sued for discrimination on a more frequent basis today than in the past, and that companies are much more likely to lose than they were in the past. There is little, if any, evidence to support this notion. Between 1979 and 2006, only 15% of employment discrimination civil suits were decided in the plaintiff's favor, vs. 51% of non-job-related civil suits. The number of employment-discrimination lawsuits filed by plaintiffs has actually seen a significant drop over the past decade.
In the wake of the landmark Brown Vs. Board of Education Supreme Court decision, the Griggs vs. Duke Power decision formed the legal precedent that, under Title VII of the Civil Rights Act, employers could not use selection processes that caused a SUBSTANTIAL difference in selection rates between different religious groups, ethnicities, and genders. Since then, court decisions have vacillated between strengthening and weakening this standard. But for the most part, anti-discrimination laws have become more specific over time (with some obvious exceptions for religious organizations, etc).
Even if you don’t believe in the principles behind equal employment opportunity as they are currently applied by the United States legal system, you should appreciate the fact that ignoring this issue could get your business into some very hot water. And if you are in HR, you can be sure that, regardless of what anyone above you says, you -- or whoever creates the hiring process and makes the hiring decisions -- will eventually get the blame if you ignore adverse impact.
We hope the information on Renegade Psychology will help your organization to develop and maintain effective hiring practices, so you will not fall victim to these unpleasant (and potentially expensive) situations.