How To Achieve Pay Equity And Mitigate Compliance Risk

 

 

 

Women and people of color still face significant pay equity issues. A quick glance at statistics illustrates that organizations have room to reduce the gender pay gap and race pay gap.

 


 

HR professionals aren’t disputing these numbers. Only 40% of HR professionals
consider their organizations to be good or excellent when it comes to pay equity efforts,” according to HR.com.  

"It is reflective of a painful reality: decision-makers are not investing in solving the pay equity problem," stated Dr. Patti Fletcher, Chief Workplace Equity and Disruption Futurist at HR.com.

As organizations and HR leaders try to tackle these problems, it’s important to keep in mind that committing to equitable pay practices is not just the right thing to do, it’s also essential to boosting employee engagement and avoiding compliance risk.  

 

Pay equity is every employee’s right

All employees have the right to expect—and earn—equal pay for equal work. Pay must be equitable, regardless of gender, race, religion, national origin, age, or physical/mental abilities. Pay equity,retention, and performance can all benefit when employees trust that their employer is actively addressing the issue of pay equity.  

Employees appreciate when an employer cares about pay equity. They are looking for employers to put practices and processes in place to ensure all employees are treated fairly. If an issue comes up, employees expect employers to take quick action to resolve and remove pay discrepancies. 

When businesses prioritize and communicate their belief in—and commitment to—pay equity, engagement, retention, and performance can all improve. Employees want to trust that their employer cares about them and that they’re ensuring pay equity. When employees feel valued, they’re also more likely to invest in their employer’s success and do what they can to make sure goals are achieved.  

 

The cost of non-compliance to pay equity laws

In addition to being the right thing to do and engaging employees, addressing pay equity also helps organizations avoid compliance risk. In recent years, pay equity has been in the spotlight, with high-profile pushes for new regulations and stronger enforcement of state and federal equality statutes. And those pushes have been rivaled by equally high-profile legal battles and lawsuits that have resulted in multimillion dollar settlements and public embarrassments for previously well-respected brands.   
 

Like other discriminatory practices, pay equity is a vital issue to resolve in an organization. But unlike more overt forms of race or gender-based discrimination, When compared to the significant compliance risks, it makes sense for organizations to step up and resolve pay equity issues once and for all.

 

How do you audit pay equity gaps utilizing data within your HCM? 

At SyncHR we understand how a modern HCM platform can help customers manage and track pay in a way that informs business decisions and helps them ensure pay equity. We’ve built a system that not only captures data to the employee level during onboarding but also provides high-level summaries of pay comparisons that can assist with internal and external pay equity audits.

 

From their HR Dashboard in SyncHR, administrators and executives immediately have access to important data, including:

  • Turnover by gender

  • Turnover by ethnicity

  • Median gender pay gap

 

Users can also view this data based on a specific timeframe they select. For example, if an organization is being audited for pay rates in a different year, the system will provide that data based on the calendar dates you select.

 

Using the people view in SyncHR, users can also quickly compare specific data such as ethnicity, gender, and base comp. Using the grouping feature, they can view ratios and additional groupings such as ethnicity. As needed, data is also available by department or manager to get detailed information about pay trends for a given group.

 

Another important HCM feature related to pay equity is the ability to run EEOC reports. SyncHR offers the standard report, but can also deliver EEOC reports based on headcount, employee hours, or employee W-2 wages. These reports can be grouped based on compensation range, or compensation range and location. Reports are essential for organizations that want to use up-to-date tracking to inform business decisions and stay in compliance with pay equity laws.

 

A video is worth a thousand words: click here to see a 5-minute tour of how SyncHR enables administrators and executives to quickly review the most important pay equity data.

 

Use data to make informed and equitable pay decisions

As part of the pay equity strategy, companies must consider how they can deploy data-driven technology to help automate the compensation decision-making process. But it’s not just about having the data and automating the process, it’s also about using the information to engage your organization in the pay equity conversations that matter most. 

 

Here’s how:

  • Provide executives and decision-makers with the data they need. Whether it’s via an HR dashboard or data you send them, make it easy for leaders to review real-time pay comparisons. Make sure to use data from your HCM to put pay facts at their fingertips.

  • Track and enforce pay ranges. An HCM provides you with the tools to track and enforce pay ranges and guidelines based on job classifications. When you can automate and streamline the pay process (hiring, promotions, incentives), it’s less likely that inequitable practices will arise.

  • Create and communicate transparent pay programs. To engage employees and raise awareness, create compensation and pay programs that are based on objective metrics and data. Then communicate about those programs so employees know where they stand and have visibility to your fair practices. 

 

Even if you think you’re in compliance, pay equity is an important and timely topic for any organization. Some of the most well-known brands around the world have found themselves in trouble with employees, the EEOC, and local authorities. Proactively examining your pay practices and using automation to ensure alignment is imperative to retain employee trust and avoid the negative ramifications of pay inequity issues.


Learn more about how a modern HCM can help your organization achieve pay equity and mitigate compliance risks—schedule your free personalized demo to see SyncHR in action.

 

 

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Liz Sheffield

Liz Sheffield

Liz Sheffield is a writer and communicator based in Seattle, WA. She specializes in writing about topics related to HR and the people side of the business. Her areas of interest include HR Tech, HCM, leadership, training and development, employee engagement, culture, and recognition. Sheffield brings more than a decade of corporate experience in HR.

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