Research* suggests barriers to accessing data could be to blame for many organisations’ unsuccessful bids to address pay equity in the workplace.
Of those surveyed, more than a third (35%) of senior HR leaders do not have enough data on pay, half (50%) lack employee self-identification data, and three in five (59%) are without data on employee demographics.
Alongside significant data gaps, there is a reliance on legacy technology and out-dated, manual internal processes, which makes pay equity analysis much more challenging and ultimately less effective. Most organisations outsource pay equity analysis to external consultants, but for those that manage it in-house, the most common tool reported by senior HR leaders is spreadsheets (59%).
Not only are organisations using ineffective methods to carry out pay equity audits, but the research found even organisations that are conducting pay audits are not completing them very often, with just one in 10 (9%) senior HR leaders reviewing their data monthly. Concerningly, nearly a third (30%) of senior HR leaders only carry out audits once a year.
Only by conducting regular equity analysis, quarterly, or every other month, can businesses stay up to date on pay fairness across the organisation. Doing so will serve to keep leadership informed about inequities and provide essential insights to act proactively in correcting gaps.
Nearly half of senior HR leaders (45%) struggle with accessing the relevant data needed for correcting pay equity gaps, but they are not alone. The survey of more than 1,000 HR leaders, business leaders, and employees across the US and UK, found an equal amount (47%) of senior business leaders cited the same challenges related to data access and analysis.
Zara Nanu, CEO of Gapsquare, part of XpertHR comments: “An effective data collection method is key. Without one, leaders have no way of tracking where they stand when it comes to pay equity and other measurables. The first step is to get the basics right: getting set up with the best tools and work processes and ensuring they are being done correctly and regularly.
“Leaders know the importance of pay equity, but data gaps mean uncertainties persist and progress is slow. Establishing fair pay practices relies on a detailed analysis of data, which many either don’t have access to or have the skills to interpret, causing a lot of businesses to fall at the first hurdle. What’s needed are more robust employee workforce data and pay analytics that support leadership teams with actionable insights about how to close equity gaps across the entire workforce.”
Jeanne Meister, EVP, Executive Networks and author, adds: “It’s clear that, within many organisations, there is limited technical capability to use tools and meaningfully interpret data on pay equity. Not only is poor data a barrier for organisations tackling the issue, but there is also a lack of sophistication in how pay equity analysis is done. We need to take advantage of the capabilities that technology can provide to better understand and correct pay equity issues if we are to see undisputed progress.”
2023 Pay Equity and Transparency Study: Actionable Insights for a Fair Future of Work eBook here: www.gapsquare.com/research-pay-equity-and-transparency
*Research from XpertHR and Executive Networks