Pay equity, diversity and inclusion
Key Questions for Evaluating Pay Equity Solutions
Choosing the right pay equity solution for your company is a big decision, with a great deal of time, money, and effort at stake. When comparing different solutions, you want to be sure you’re asking the right questions of potential vendors. That’s why we’ve put together a list of five key questions with information on the kind of answers you want to hear.
1. What capabilities does the solution have?
It’s crucial to understand the strengths, and the limitations, of competing solutions. What features will benefit you the most in helping your organization achieve its pay equity goals?
You want to make sure the solution you choose is valid, accurate, and enterprise-grade. Your pay equity software needs to account for all the qualities that make your workforce one of a kind: its unique employee count, geographical locations, and legal requirements. If it doesn’t, you risk having lower confidence in the results; in fact, you could end up making the situation worse by sub-optimally solving the problem.
Furthermore, many pay equity solutions provide users with controls for manipulating, or “gamifying” the pay equity audit to get positive, convenient results. The dangers of applying these types of factor controls in your pay equity software harm and undermine your organization’s intentions to achieve pay equity.
2. Does the analysis provide real-time results?
If you’re using the old way of approaching pay equity, your analysis is outdated by the time you start addressing it. You can’t just look at it once a year or once every two years; you have to manage it regularly and proactively.
Here’s why it’s important to make sure your solution provider offers continuous pay equity monitoring:
- Analysis performed by law firms/statisticians are typically outdated (“stale”) one month later
- A 70,000-person company may have 4,000-7,000 new hires in the next month
- A high turnover rate results in a constantly changing pay equity profile and the average employee turnover in the U.S. is 50%
With ongoing monitoring, your organization can have a steady, up-to-date pulse on your pay equity status. And any time there is a change in your workforce, you can be confident that your audit analytics are reflective of your actual composition.
3. Does it integrate with the other solutions you’re using?
No matter what the size of your company, your pay equity solution needs to be enterprise-grade. It should also integrate with the largest, most-used human capital management (HCM) solutions, such as SAP, UKG, and ADP.
Being able to seamlessly retrieve necessary data from these platforms is key to saving thousands of person-hours. This integration also offers valuable security benefits.
4. Does it provide multidimensional analysis vs. just binary?
You want to be certain that your solution provides multidimensional analysis. Binary analysis—male vs. non-male, Black vs. non-Black, white vs. all others, etc.—simply isn’t up to the task of helping your company achieve pay equity. That’s because the demographic mix of the U.S. is definitely not binary; rather, there are a variety of protected classes. As a result, you need to be sure your solution allows you to analyze all race/ethnicity groups and all gender groups at the same time.
5. Does it account for intersectionality?
Most platforms don’t. In fact, they may only help organizations identify similarly situated employee groups (SSEGs). Everyone in a particular SSEG performs duties and tasks that are similar. For that reason, one could assume that everyone in an SSEG should be paid the same after controlling for factors such as tenure, performance, education, etc.
However, your solution needs to be able to consider more than one factor at once: that is, to analyze race, gender, age, disability, and so forth all at the same time. This is intersectionality.
Your solution needs to work in terms of pay analysis groups (PAGs) rather than SSEGs. A PAG generally comprises two or more SSEGs, and PAG analyses require the analyst to control for qualitative SSEG differences, such as job title, pay grade, and job function.
Why do we need PAGs if we have SSEGs? Sample size. For example, it’s possible to analyze three SSEGs that, by themselves, are too small to be analyzed with regression methods. However, by aggregating the three SSEGs together and controlling for important qualitative SSEG differences (for example, job title), the three SSEGs can be evaluated for pay disparity.
Other features to ask potential providers include:
- Salary range guidance. Helps prevent pay inequity by ensuring your employees receive fair pay at the time of hire and allows you to comply with ever-changing pay transparency requirements.
- Market compensation data. Leverages data from some of the most reliable market compensation databases in the world, so you can ensure all pay decisions are equitable and reduce the need to perform expensive, unplanned pay remediations in the future.
- EDGE certification. Empowers organizations to assess their gender and intersectional diversity, systemic equity, and inclusiveness of the culture; provides you with the credibility to stand out and prove you’re a leader in fair pay.
- Disparity progress tracking and trending. Includes identifying any pay disparities across gender and race/ethnicity; these are potential pay discrimination liabilities you’ll want to mitigate.
- Seamless integration with major identity management services. Integrates with the largest, most-used HCM solutions to save your company thousands of person-hours and provides security benefits.
- Dedicated data extraction, consolidation, and cleansing. Helps create a more accurate and complete analysis, based on data you can trust. If the data used is flawed, you could create more pay inequalities while overlooking real disparities.
- Root cause analysis. Eliminates the guesswork that can put your organization at risk. By identifying the source of pay disparities, you find and eliminate the causes, not just symptoms, of pay disparity.
- Government filings. Ensures you comply with evolving U.S. and international pay equity regulations. Plus, individual states are passing aggressive pay equity legislation that far exceeds federal standards.
- Hiring, promotion, and retention analysis. Lets you provide equal opportunities to current and future employees, and avoid wage compression, which occurs when organizations overlook important factors for paying employees differently.
Why choosing the right pay equity solution matters
About 84% of companies do not use specialized technology and analytics for pay equity. According to our research report, conducted in partnership with The Josh Bersin Company, organizations that do, and make rewards and recognition fair and equitable for their employees are:
- 3.2 times more likely to engage and retain employees
- 7 times more likely to attract the right talent
- 5 times more likely to have outstanding financial and customer service
- 5 times more likely to accomplish outstanding people outcomes
- 6 times more likely to innovate and adapt well to change
These valuable benefits can only be obtained with the help of a reliable, robust solution provider.
At Trusaic, we’re eager to answer any of these questions—as well as any others you may have that apply to your unique business space and organization. Contact us today for a no-cost, no-obligation conversation, and demo of our PayParity platform.
To learn more about the benefits of using specialized software to achieve pay equity, download our research report, The Role of Data, Analytics, and Technology in Achieving Pay Equity, below.
Organizations that conduct a pay equity audit must communicate their progress and achievement along the way. To help you faciliate discussions around compensation, we created the Pay Equity Communications Planner.