Companies are often faced with budget concerns when determining solutions that can either be done in-house or outsourced to a third party. Pay equity solutions are no different.
While businesses want to make the best decisions for their employees and company needs, budget constraints are always present, even if money is no issue. There are other reasons, such as efficiency and liability, when assessing whether or not to involve a third party.
Every company is different and will have a unique approach to pay equity solutions. While some businesses find the do-it-yourself acceptable, others want a third party involved. Some even want a mix of the two. This is why I asked a group of business experts in diversity and inclusion, human resources, and legal strategy to discuss how organizations should decide on which route is best, and to provide examples of what can be done in-house vs. what items an outside expert should handle. Additionally, I was curious as to the role of software when it comes to pay equity solutions and the possible benefits it can provide.
The Benefits of “Do it For Me” Solutions
For the most part, experts agree that external guidance is worth the money especially since most companies have no experience in the area of The measurement period pay equity solutions and audits. Outside experts in the field have more knowledge, and can gather pay equity data more efficiently. Global Executive, Debora Bielecki said, “leveraging external support would be most helpful when wanting to assess like positions in other industries to do some benchmark exercises.”
Understanding pay equity laws, and your organization’s compliance obligations are essential before making any decision. If you decide to go the external route, you want a third party that understands all aspects of pay equity. When choosing external support, most executives rely on referrals to make the decision.
It is not only the experts’ knowledge in the field that is beneficial, but having professional third party assistance is also important to curb unwanted bias. For example, “confirmation bias,” the practice of interpreting evidence as confirmation of one’s own conclusions, thereby obscuring the full picture, can affect statistical results. In addition, your employees can continue doing their jobs while others analyze pay equity at your company. Julie Thomas, Diversity Specialist believes experts are needed to guide the process. She said, “In my experience having external consultancy on what you need to capture, review and analyze is critical.”
The Role of Software
Software is key in extracting and compiling data for auditing and analyzing. Specifically, Ellen Raim (Vice President of Human Resources & Compliance) said, “the first use of software is to allow you to extract and amalgamate the data by categories (date, length of service, gender, age, race/national origin, location, role, etc.) Looking at the data in all these ‘cuts’ helps you have a true understanding of the nature of the pay spread.” Obviously, software is great for data analysis, but it’s still up to the person doing the investigation to understand the data and how it should be interpreted.
Another very important thing to keep in mind is legality and policy. As Debora Bielecki points out, “Data at the employee level may be ok to share in some countries but other countries like those in Europe have work councils that don’t allow for anyone but the employee’s direct manager to know this data, leveraging software for such an exercise could be legally impossible.” Make sure those with access to employee data have the legal right to do so.
Brian Chossek, CEO at Impact 7 Generations, adds to that by saying, “both privilege (access to data and information) and mitigation of discovery (ensuring only the right data can be accessed in the right way) should be done in consultation with the digital security organization, and within the frameworks and policies they’ve developed in conjunction with legal.”
Being proactive and being aware is a great start, and will make your business better in the long run. Contact us to have a cost-free Pay Equity Consultation performed to assess where your organization stands in regards to pay equity.