Adverse Impact Analysis
Comprehensive, detailed analyses and support for affirmative action plans and OFCCP audits from experienced experts.
Adverse Impact Analysis Services
Analyzing transactions is a crucial part of affirmative action planning. Adverse impact analyses are one of the most data intensive areas of affirmative action and an area of significant risk for OFCCP settlements.
With OutSolve at your side, you are enabled to easily report on all of the required transaction data – applicants, hires, promotions and terminations. Plus, we offer a wide array of management reports to meet your needs.
To work with OutSolve on your Adverse Impact Analysis, please contact us.
Adverse Impact Analysis Explained
The Adverse Impact Analysis (AIA) is a tool used to measure the statistical relationship between two selected groups. For the AAP, the selected groups are hires versus applicants, terminations versus those available for termination, and promotions versus those available for promotion. The report analyzes these transactions to determine if any race or gender group is adversely affected by a company’s selection decisions. The Impact Ratio Test (IRA), also known as the 80% test is the most widely used test to determine adverse impact at least as an initial indicator of a potential issue. A two-standard deviation test is typically used by OFCCP and contractors as the more definitive, final result.
Adverse impact indicated as ‘Yes’ does not automatically indicate discrimination. When there is adverse impact a contractor must research selections with impact and document findings and resolutions. It is obligatory to research any instance where adverse impact occurs and attempt to remedy or explain the potential problem. In some instances, the reason for adverse impact indicated as ‘Yes’ is due to data discrepancies while in others the statistical gap may be due to legitimate factors such as a validated test. Regardless of the cause readers must know that OFCCP will fully investigate instances of adverse impact found in submitted data.
Typically, the time period used for the Adverse Impact Analysis is the year prior to the current affirmative action plan. Some contractors elect to perform quarterly or semi-annual Adverse Impact Analyses in an attempt to identify problem areas before a full yearly cycle has passed.
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