Convincing your Executives that Pay Equity Analysis is Worth the Investment

This blog was brought you as a part of a new series of blogs, “The Comp Corner,” in which one of our expert consultants will answer specific questions submitted by HR professionals like you!  

Instead of trying to anticipate the challenges you're facing at work, we’re going straight to the source – and we're looking forward to fielding some of your toughest questions about pay. Click the button below to submit yours, or shoot us your question by email with subject line "Comp Corner." 

Important note: if you don't want to miss an update to our Comp Corner, make sure you're signed up to receive our Compensation Newsletter. 

Q: I am interested in conducting a pay equity analysis on our company, but I need to get executive buy-in. How can I explain the importance of conducting a pay equity analysis?  

A:

Here are three reasons why pay equity analyses should be an important part of a business’s overall talent acquisition and retention strategy.

1. Maintain: Maintain legal compliance.

A pay equity analysis can support compliance with equal pay regulations. The Equal Pay Act of 1963 and Title VII of the Civil Rights Act protect equal pay for equal work and prohibit pay discrimination based on various protected classes. Ensuring that you are providing similar pay for similar work may potentially prevent discrimination lawsuits, saving your company money in legal fees.

1. Retain: Retain talent.

A pay equity analysis can help HR answer employee questions about your pay practices. Pay transparency can help you retain talent by improving company culture and morale. Sound pay practices can also reduce workplace turnover, retaining your top and trained talent who you have already invested in.

A pay equity analysis is also a good idea as more states require employers to post pay ranges when filling new positions. Conducting a pay equity analysis as part of your compliance strategy helps you evaluate whether your compensation practices are being consistently applied to current employees, before your pay ranges become public news.

1. Recruit: Attract talent.

A pay equity analysis can also help your organization evaluate your process for setting starting pay and attracting top talent.  The push for pay transparency means applicants will have more information about your pay practices up front, including posting the reasonably expected pay range for each job. When coupled with a market analysis, a pay equity analysis can help your organization set competitive starting pay that is based on the factors your organization values in new talent.

If you have questions or are looking for more information about reconciling pay issues, please email us at bai@berkshireassociates.com or submit the form below.