We Are Pay Equity Compensation Consultants

The most significant step that an organization can take to determine if it has issues with pay equity is to conduct a pay equity audit using statistical modeling to highlight any problem areas.

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The POE Group helps companies gather the relevant data, conduct the pay audit backed by statistical methods, generate a pay equity analysis report, identify issues, and determine an action plan to rectify problems. Our consulting approach is based on a collaborative approach with our clients to ensure optimal results.

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Why do pay equities exist and why should they be reviewed?

There are valid factors for differences in pay between employees, such as experience, performance, or education, but there may be pay discrepancies that cannot be explained by legitimate reasons. Once identified, these types of situations should be addressed as soon as possible to prevent future issues.

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There are many reasons that an organization may want to look into potential wage gaps, including difficulty in recruiting, higher than expected turnover, employee complaints or dissatisfaction, or if the organization is proactively looking to improve upon its diversity and inclusion efforts.

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In addition, pay equity is required to remain in compliance with the Equal Pay Act, as well as to avoid potential litigation. Beyond simply remaining in compliance with regulations, managing pay equity has become a priority in recent years, and a significant portion of companies have already made progress towards achieving this goal.

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The most significant step that an organization can take to determine if it has issues with pay equity is to conduct a pay equity audit using statistical modeling to identify any problem areas. The goal of a pay audit is to identify any factors such as gender or ethnicity that are affecting pay, make corrections as necessary, and mitigate any practices that are contributing to the pay inequity.

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Why hire compensation consultants to run a pay equity analysis?

Hiring an outside firm to conduct the audit ensures that the process is handled by experts that understand the complex statistical modeling that is used, as well as helps the process move along quickly if the organization’s existing HR team does not have the time to complete the work.

 

Additionally, pay equity audits should be conducted under the “direction” of inside counsel, or preferably outside counsel to allow protection of the audit results. Documents subject to attorney-client privilege are generally not discoverable in the event of a lawsuit. 

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Whether you simply need to verify that your organization’s pay systems are equitable, or you have concerns about your company’s pay equity, or lack thereof, we can help.

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How does the POE Group conduct pay equity audits for clients?

1. We plan out the project, including determining the goal for the pay equity analysis, who will be involved, the timeline for the project, and get buy-in from senior management on resolving any issues that may be discovered.

2. Gather the data that will be used in the analysis from the company’s human resource information system (HRIS). This may be present unforeseen challenges if the HRIS data is incomplete or incorrect.

3. Determine how employees will be grouped for analysis (e.g. by job title, job family, salary grade, etc.). This is a critical step to ensure a sufficient sample for statistical analysis and that the groupings include employees that are similarly situated. At a basic level, similarly situated employees perform similar tasks under similar working conditions.

4. Identify legitimate factors for pay differences such a as job performance, job level, experience, or seniority. 

5. Use statistical methods, typically regression analysis, to test the relationship of legitimate factors for pay differences in the employee groups.

6. Evaluate if there are pay differences beyond the legitimate factors between gender differences (or other protected classes) within the employee groups and determine how to address any issues that are found.

7. Identify and mitigate any business processes that may have contributed to the pay inequities.

 

Establish best practices in fair pay

The issue of pay equity is not going away. Whether you want to verify that your organization’s pay systems are equitable, or you have concerns about your company’s pay equity, or lack thereof, we can help. 

 

The sooner that an organization begins taking steps towards ensuring fairness in their pay practices, the sooner it can begin reaping the benefits of employee trust in pay decisions, lower turnover, and a high-performance workforce.

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