We have long spoken out about the importance of pay equity: why it matters to employees and why now is the right time to focus on it. But how do you know whether or not you are paying fairly? How can you ensure your reward practices are in fact equitable across factors like role, gender, ethnicity, age, and geography?
Before taking steps to ensure fair pay, first you need to know whether you indeed have inequities in your organization. That is easier said than done when you have thousands of employees and many variables that enter into pay calculations.
Assessing Fairness of Pay in Your Organization
As The Center for American Progress writes, “Effectively challenging pay discrimination in the workplace and ensuring strong enforcement require access to the underlying data that can reveal pay differences and practices. Without concrete data, it is nearly impossible to show where disparities are occurring and who is most affected by these disparities.” While anecdotal evidence about pay gaps can suggest areas to investigate, it is only with hard facts and analysis that you can see the realities and take appropriate action.
Fortunately, software is very good at distilling large amounts of data and producing actionable results. The key is to get all of the relevant employee and performance information into a platform that can analyze it to reveal the truth about the fairness of your pay practices. beqom is one such platform, with the advantage that it is optimized for ingesting and making sense of compensation-related data, not only who was paid what, but the criteria used to calculate compensation, along with HR demographics and any information that is significant in determining fair pay like job category, job title, skill sets, tenure, departmental seniority, and performance history.
The Fair Pay Advantage
As HR practitioners well know, the regulatory environment has been shifting over the past decade with regards to what pay details must be tracked and reported. But regardless of what the government requires you to report, it makes sense to have a grip on this information for your own business purposes and to be prepared to be compliant if and when required to report this data. Even where the government doesn’t mandate fair pay, it can be a competitive advantage in attracting talent if you can be transparent and show that you in fact have fair pay practices. As noted in our recent Pay Equity eGuide, the trend among the younger generations of workers is to expect more and more pay transparency.
Understanding Data, Understanding People
Understanding your data can help you to really understand your workforce. Says CAP, “Collecting pay data is particularly important to gain a more in-depth understanding of women’s diverse experiences, especially women of color, who experience the largest pay gaps. Too often, the unique challenges facing women of color get lost in the broader equal pay conversation, because there is a lack of information beyond the basic data documenting the wage gap.”
With the right data, you can go into meetings prepared to answer questions. For example, in the same job, with the same skill set and performance rating, are all groups paid the same? Are women earning less because they are being overlooked for promotions? Because they are working part time? Because of prior salary histories? If minorities are being paid less, is it related to where they live? To skills or education level? To unconscious bias? It is impossible to know how to remedy a pay gap unless you understand it. Perhaps the remedy is skills training; perhaps it is educating managers on bias; perhaps it is implementing pay calibration. You need to mine and analyze your data to find out.
A Playbook to Achieve Fair Pay
In our eGuide, The Pay Equity Actions that Matter Most to Your Workforce, we examine the case for pay equity, including why and how to get there. Download the guide today to find out how you can embrace pay equity and make comp decisions that are fair and transparent.