Preparing for a Pay Equity Audit

Where will you begin? Determine which job families or categories you will start with first, and what information on employee characteristics you already have in your database. You can start with one job family or one location, and give some thought to whether you can also conduct your audit through an intersectional approach with your data.

When you've defined your scope, you will need to collect and validate your data. If there are data limitations, start planning how you'll collect additional data promptly. Perhaps you can create an annual employee survey, or add data collection to new employee onboarding. In terms of compensation data, think expansively about total compensation and consider including commissions, bonuses, and equity, if applicable.

Organizational size is a determining factor when choosing an audit method to use, ranging from cohort analysis for smaller companies to multi-factor regression analysis for larger companies. (Click here to learn more about various statistical methods.) Consult with legal counsel for help creating a methodology that accounts for size without being over- or under-inclusive.

Make a communications plan, consult with legal counsel, and take action to address pay disparities that are uncovered through the audit process. Some employers time remediation with their regular compensation processes to avoid making off-cycle compensation adjustments. Consider creating a consistent budget allocation for pay adjustments.