When running a business, it’s important for you to pay your employees fairly and equally for the same positions. It’s also your legal responsibility to do so. For that reason, it’s a good idea to keep track of and regularly inspect your company’s data to ensure you’re administering equal pay. Here are some good tips for identifying pay inequality at your company.

Why It’s Important

To better identify pay inequality, you should understand more about why it’s important. It is vital to understand how pay inequality relates to other business aspects, such as ethics, competition with other companies, and even shareholder expectations. Understanding that it’s unethical to refuse someone equal pay is simple. However, you should also consider how it makes you appear outside of your workplace. You’ll lose potential employees to your competitors if your business is notorious for unfair pay, meaning you’ll miss out on growth opportunities. You may even lose your existing employees. This, in turn, will upset your shareholders as your growth and success stagnate. You’ll appear incapable of meeting the basic legal standards for all businesses.

Pay Equity Audits

So, how do you go about ensuring your company is on top of pay equality? The first tip for identifying pay inequality in your company is to conduct a pay equity audit. This involves compiling employee data and assigning auditors to compare the pay of all employees. The auditors can also investigate any unjust or inexplicable pay inequalities.

Important employee data includes the length of service, job classification, and demographic information such as gender, age, and ethnicity. Compiling this data and organizing it in a usable manner can be a complex and arduous task. However, it’s well worth the effort and provides the opportunity to examine and improve your HR record-keeping systems.

Outsource Data Reporting

While your internal operations may handle the pay audits, you should consider the best practices for assessing compensation plans. One such practice is outsourcing services for yourEEO-1 pay data reporting. This is a part of your legal responsibilities, as you’ll be reporting files, doing data assessments to check for consistency in pay, and identifying any missing information.