Posted March 2nd, 2022 in Legal Insights with Tags The Equal Pay Advisor
Top 5 Reasons to Do a Pay Equity Audit in 2022
There’s no time like the present to conduct a pay equity audit. This year, employers face historic competition to recruit and retain talent. With continued pressure to increase DE&I efforts and a wave of new pay equity laws, a pay equity audit can be just the formula to keep momentum moving in the right direction.
- Beat Back the Great Resignation. While employers are stretching budgets to raise salaries to recruit new workers, retention is also important. A traditional market analysis reveals whether pay is competitive with outside employers, but a pay equity audit identifies potential internal gaps that can lead employees to feel underappreciated and look elsewhere.
- Edge Out the Competition. Companies are increasingly asking vendors to show their cards when it comes to meeting certain DE&I benchmarks. An internal pay equity audit shows a company is serious about addressing and remedying wage gaps to improve equity among employees—and companies can highlight these efforts in RFP responses.
- Practice What You Preach. If your company asks vendors to meet DE&I benchmarks, advertises its DE&I efforts, or is certified as a woman- or minority-owned business, a pay equity audit shows that you hold yourself to the same standards.
- Prepare for Pay Transparency Laws. With lawmakers across the country—most recently in New York City—passing legislation requiring employers to disclose salary ranges for posted positions, employers are knocking out two birds with one stone: pulling wage data for job postings and pay equity audits. The pay equity audit serves as a helpful benchmark when making decisions about posted salary ranges and job offers.
- Mitigate Risk. We’re lawyers, and so we’d be remiss if we didn’t mention our favorite reason to conduct a pay equity audit—to proactively identify and address wage gaps that could result in liability under the Equal Pay Act, Title VII, or equivalent state law.