The reward of gender pay equity through the lens of data and analytics

In the loop , PwC US November 2016

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Now is the time for action in gender pay equity. Find out how.

What you need to know about gender pay equity

  • In 2016, women get paid 20% less than their male counterparts.
  • Women hold fewer leadership positions, accounting for less than 5% of Fortune 500 CEOs.
  • While progress has been made in gender equality over the past several decades, employers need to focus on this issue and ensure compliance with state laws and regulations.
  • Gender equality has proven to produce happier, more productive employees, which in turn results in more successful and profitable companies.

Gender pay equity is a hot topic

Over the past year, you’ve probably heard a lot about the gender pay gap in the news. The topic has dominated headlines and was a point of discussion at the World Economic Forum. Additionally, increased state and federal regulations have brought this issue to the forefront of CEO’s and Chief Human Re­­sources Officer’s minds.

Ensuring and maintaining pay equity compliance is crucial for organizations to function successfully

Employers need to focus on assessing current compliance with the laws in place and on establishing a framework to maintain compliance with state and federal equal pay standards as they evolve. Currently, only two states—Alabama and Mississippi—have no state pay equity or sex-based employment discrimination regulations. A handful of states have particularly robust laws above federal legislation governing equal pay, making compliance initiatives even more important and more complex for multi-state organizations. For example:

  • A new California law increases the comparison standard from employees performing “equal work” to “substantially similar work” and expands coverage of the law to require comparing employees across the entire state, rather than at an employer’s single work location.
  • Maryland prohibits employers from assigning or directing employees into less-favorable career tracks—known as “mommy tracking”—or withholding information about promotions.
  • Massachusetts prohibits employers from asking potential employees about their salary history to prevent individuals from being continually underpaid
What you need to know about gender pay equity

Beyond compliance, fair pay is good for the bottom line

Most companies know that paying workers fairly is necessary for legal and ethical reasons. But fair pay can also be good for the bottom line. There is substantial evidence that good HR policies, such as pay equity, make for happier employees, which in turn make for more productive workforces and more successful companies. Further, workers who believe that they are paid fairly are more likely to contribute their best effort to the job. Finally, pay equity has been shown to be a key driver of greater gender diversity in corporate leadership and numerous studies find that improved gender diversity in corporate leadership can lead to better long-term financial performance.

Our approach – from compliance to analytics

Using an integrated approach across compensation design, compliance, and people analytics, we help clients analyze their compensation and performance management programs, determine compliance with federal and state laws, and identify key pay disparity factors, while also linking them to critical employee and organizational outcomes.

From compliance to analytics wheel

Articulate business strategy and pay equity vision

  • Identify the strategic approach to gender equity the organization wants to take, even beyond pay equality.
  • Define specific pay equity objectives and the underlying business rationale

Evaluate existing pay policies and practices

  • Identify policies and procedures that increase risk of non-compliance.
  •  Develop plans to remediate pay gaps and non-compliance with legal requirements and effective business practices.

Determine key pay disparity factors

  • Identify positions at high risk for non-compliance through a job duties analysis.
  • Assess job duties and policies through manager and employee interviews and surveys.

Use advanced analytics to assess pay disparity

  • Conduct a wage analysis of the compensation of individuals performing substantially similar work.
  • Consult on strategies to address compliance with the Fair Pay Act, including cost modeling and the implications of increasing salary, bonus opportunity or other compensation elements.

Implement remediation and monitor impact

  • Recommend process improvement strategies designed to be in compliance with the new legislation.
  • Provide change management, training, and communications support.

Manage pay equity processes on an ongoing basis

  • Monitor changes to federal and state pay equity laws.
  • Re-run your gender pay equity analytics to ensure compliance with federal and state laws; determine if pay disparity factors have changed and/or improved over time.

How PwC can help

To have a deeper discussion on this topic, please contact:

Beth Paul

Partner, National Professional Services Group, PwC US


Lance Foreman

Partner, PwC US


Shebani Patel

Partner, PwC US


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