Achieving Pay Equity: How Analytics has Evolved to Support True Progress

Over the last few years, the pressure on organizations to report on pay equity has grown substantially. Activist investors have been challenging companies with shareholder proposals – having first focused submissions on the Technology sector, which has since seen proactive disclosure become commonplace, and, more recently, having focused on Financial Services firms, for whom disclosure is on the rise. On top of that, a new regulation in the United Kingdom requires companies to regularly disclose average pay differences between women and men. While these and other global regulations continue to exert pressure, organizations have also moved to prioritize pay equity as part of their own due diligence and to ensure access to top talent. Our When Women Thrive research, initiated in 2014, shows that organizations engaging in rigorous pay equity review, based on statistical analysis, are more successful in building diverse representation.

With such heightened scrutiny and attention, organizations are focused on firm‑wide, global analysis to proactively assess their circumstances, support action where necessary, and inform their communications to various constituencies, including their shareholders, customers, and employees, even when not required by law. To meet a broadening set of demands, we argue that such analyses need to be more focused on achieving organization-level change over simply ensuring employee-level alignment with norms. Analysis should afford decision makers the opportunity to test the impact of different pay adjustment strategies on pay gaps, such that the greatest progress possible can be achieved subject to budget constraints. In this paper, we represent how pay equity assessments have evolved – firstly, reviewing the enduring attributes of effective analysis and, secondly, presenting critical process refinements to drive greater impact.

Brian Levine, Ph.D.
by Brian Levine, Ph.D.

Partner and Pay Equity Leader, Workforce Strategy & Analytics Practice

Linda Chen
by Linda Chen

Principal, Workforce Strategy & Analytics

Alex Grecu
by Alex Grecu

Principal, Workforce Strategy & Analytics

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