There are several ways for employers to do a pay equity audit.
Platinum – Hire a law firm who has statisticians on staff to do the regression analysis on your job comparator groups. This is a point in time analysis.
Gold – Buy software that is primarily focused on pay equity. This software will help you ensure that your pay equity audit is not a point in time summary. Instead, demonstrates a commitment to makin sure your day-to-day pay decisions are equitable. On any day, you can run reports to understand your pay equity risk, determine which employees who need a equity based pay change, and make pay decisions that won’t cause additional pay equity problems that need to be fixed later.
Silver – Buy software that you can use to market price your jobs with salary survey data. Once the employee and job architecture details are uploaded, you can run pay equity related reports to determine where you may have problems. This isn’t as robust as the Platimum or Gold strategies.
Bronze – Excel is your tool, and you use it to identify potential discriminatory pay disparities for further research using average, median, and percentage differences. You are using cohort study methodology and not regression. (And yes, you can use regression and statistical analysis in Excel as well, but you need a guru who knows what they are doing so you can interpret the results and feel confident in their approach.)
Of course, garbage data in equals garbage data out. Ideally you need to have your job architecture in place and robust accurate employee data.
Do your pay equity audit under attorney-client privilege, because it protects confidential communications between a lawyer and their client that relate to the client's seeking of legal advice or services.
My team and I like partnering with employers committed to fixing pay equity problems if they are found. That means having the budget available to do so.
We like helping employers determine if there are root cause issues causing inequities in pay. We look at the touchpoints in an employee lifecycle to determine what processes could be causing the issues. I will post more about this tomorrow.
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