As HR and Compensation professionals ring in the new year, many are also creating a “to do” list for 2024. Here are a few things you may want to add to your list as part of your organization’s pay equity journey.
Ensure External Equity
A market analysis provides your organization with the guidance it needs to be competitive in a tough labor market. Not only does a professionally done analysis provide your organization with a compensation structure (e.g., pay grades) that can grow as you do, it can also help you understand the minimum pay being offered in the market for each of your job titles. A market analysis can also provide organizations with valuable insight into employee turnover risks. To learn more about Berkshire’s market analysis services and how they can help your organization provide competitive pay, watch our webinar.
- Conduct Job Analysis
Job Analysis is the process of studying a job to determine the duties, responsibilities, knowledge, competencies, physical and mental requirements and working conditions that are necessary to perform the job. Job analysis can be a time-consuming process, but the outcomes are an important building block for creating HR programs that are both accurate and legally defensible. Job analysis consists of collecting and analyzing extensive data on a job to determine the task requirements and individual requirements, or KSAOAPs (knowledge, skills, abilities, other characteristics, and physical abilities), that are needed to successfully perform the job tasks. Job analysis can help employers identify the appropriate compensation for a job.
- Look at How you Set Starting Pay
Starting pay decisions are the most important decisions an organization will make regarding employee compensation. This is because it can take years to remedy a significant difference in starting pay via performance-based or other raises. Many organizations are putting guardrails in place to ensure that starting pay is set fairly and consistently. These practices include limiting negotiation, developing a methodology or algorithm for setting starting pay, requiring higher level review of starting pay decisions outside certain specific ranges, and discouraging or prohibiting reliance on salary history or salary expectations. You can learn more about the importance of starting pay here.
- Adjust your Pay Practices to Align with Increased Pay Disclosure and Reporting Requirements
Over the last several years, there has been a flurry of activity related to pay transparency and reporting. Increasingly, employers need to include pay ranges and other pay information on external and internal job listings. Keeping up with the dizzying array of requirements can be challenging so many employers are deciding on a uniform strategy about what pay information they will share on all job opportunities. This trend also has employers re-examining the use of broad pay bands and job titles. Check out our latest update on state pay reporting and disclosure requirements moving into 2024.
- Conduct a Proactive Pay Equity Analysis
Pay equity remains as one of the top compliance concerns for 2024. OFCCP, EEOC and a growing number of state and local governments are all focused on ensuring an employer’s pay practices are transparent and nondiscriminatory. Adding to the urgency is the amount of pay information now available to job applicants and employees, who expect employers to share more information about how their pay aligns with the pay of others.
2024 is the year to conduct a proactive pay analysis to evaluate whether your compensation system is working as intended and to confirm that your employees are being paid equal pay for equal work. Download Berkshire’s pay equity checklist to get started.