Back to Compensation & Benefits Administration View Capability Diagrams

Pay Equity Analysis & Compliance

Automated statistical analysis of compensation by gender, race, and protected classes with regression modeling, gap identification, remediation recommendations, and continuous monitoring to ensure pay equity compliance and reduce legal risk.

Business Outcome

time reduction in the overall pay equity analysis process

Complexity:

Medium

Time to Value:

3-6 months

Why This Matters

What It Is

Current State

(Traditional)

1. HR compensation team conducts annual pay equity audit (once per year, typically Q4). 2. Analyst exports employee data to Excel: salary, gender, race, job level, tenure, location. 3. Analyst manually runs regression analysis in Excel or hires external consultant ($50K-150K). 4. Analysis takes 40-80 hours over 4-6 weeks to complete regression models by job family. 5. Analyst identifies statistically significant pay gaps (p<0.05): 'Women paid 5% less than men for same role after controlling for tenure, performance'. 6. HR presents findings to executive team and recommends equity adjustments. 7. Adjustments made during next annual merit cycle (3-6 months later). 8. No ongoing monitoring: pay gaps re-emerge throughout year as new hires, promotions, and raises create new disparities.

Characteristics

• SAP SuccessFactors
• Oracle HCM
• Workday
• ADP
• Excel
• beqom
• Figures
• Affirmity

Pain Points

⚠ Data Quality & Completeness: Inconsistent or missing data can skew results.
⚠ Confidentiality & Compliance: Handling sensitive employee data requires strict adherence to privacy laws.
⚠ Subjectivity in Job Classification: Defining 'comparable work' can be subjective and prone to bias.
⚠ Resource Intensity: Audits are time-consuming and require cross-functional collaboration.
⚠ Legal Risk: Failure to act on audit findings can lead to penalties or claims of willful violation.
⚠ Many organizations still rely on manual processes, increasing error risk and reducing efficiency.
⚠ Lack of Transparency: Poor communication can lead to employee distrust in the process.

Future State

(Agentic)

Pay Equity & Compliance Agent continuously monitors employee compensation data from HRIS (real-time vs annual).
Agent automatically runs regression analysis monthly: controls for legitimate factors (job level, tenure, performance, location, education) to isolate unexplained pay gaps by gender, race, age, veteran status.

3. Agent identifies statistically significant gaps (p<0.05): 'Women in Software Engineering paid 4.8% less than men after controlling for level, tenure, performance—STATISTICALLY SIGNIFICANT'. 4. Agent calculates remediation costs: 'Closing gender pay gap requires $127K in equity adjustments across 23 employees'. 5. Agent generates individual adjustment recommendations: 'Jane Doe: recommend +$8,500 salary adjustment to reach equity with male peers'. 6. Agent triggers HITL review: equity adjustments >$5K per employee require HR VP approval. 7. Agent tracks compliance: generates EEO-1 reports, OFCCP audit readiness documentation, state pay transparency compliance (CA, NY, CO).

Characteristics

• Employee compensation data (salary, bonus, equity)
• Employee demographics (gender, race, age, veteran status)
• Job levels, titles, and family classifications
• Performance ratings and tenure data
• Geographic location and cost-of-labor adjustments
• Promotion and hiring date history
• Statistical significance thresholds and legal standards

Benefits

✓ 95-98% time savings: 2-4 hours automated analysis vs 40-80 hours manual/consultant
✓ Continuous monitoring vs annual audits: pay gaps detected and closed immediately
✓ Proactive compliance vs reactive audits: OFCCP audit-ready at all times
✓ $50K-150K consultant cost savings through automated regression analysis
✓ Intersectional analysis: identifies compounded disparities (e.g., women of color)
✓ Real-time remediation: equity adjustments made monthly vs waiting 3-6 months
✓ Legal risk reduction: continuous compliance reduces discrimination lawsuit exposure

Is This Right for You?

50% match

This score is based on general applicability (industry fit, implementation complexity, and ROI potential). Use the Preferences button above to set your industry, role, and company profile for personalized matching.

Why this score:

• Applicable across multiple industries
• Moderate expected business value
• Time to value: 3-6 months
• (Score based on general applicability - set preferences for personalized matching)

You might benefit from Pay Equity Analysis & Compliance if:

You're experiencing: Data Quality & Completeness: Inconsistent or missing data can skew results.
You're experiencing: Confidentiality & Compliance: Handling sensitive employee data requires strict adherence to privacy laws.
You're experiencing: Subjectivity in Job Classification: Defining 'comparable work' can be subjective and prone to bias.