Half of HR leaders lack data for pay equity analysis

Nearly half of senior HR leaders struggle to access the relevant data for pay equity analysis, despite the majority seeing addressing pay inequity as a priority for their organisation.

Research from XpertHR and Executive Networks found 45% of HR leaders and 47% of senior business leaders encounter difficulties in getting the data they need to address pay inequity.

Thirty-five per cent of HR leaders did not have enough data on pay, 50% lacked employee self-identification data, and 59% did not have data on employee demographics, making it difficult for them to identify any pay disparities between employees with different characteristics.

Six in 10 employers that conduct pay equity audits in-house still primarily use spreadsheets, however the majority outsource their analysis to external consultants.

“It’s clear that, within many organisations, there is limited technical capability to use tools and meaningfully interpret data on pay equity,” said Executive Networks executive vice president Jeanne Meister.

“Not only is poor data a barrier for organisations tackling the issue, but there is also a lack of sophistication in how pay equity analysis is done. We need to take advantage of the capabilities that technology can provide to better understand and correct pay equity issues if we are to see undisputed progress.”

Zara Nanu, CEO of Gapsquare, part of XpertHR, said: “Leaders know the importance of pay equity, but data gaps mean uncertainties persist and progress is slow. Establishing fair pay practices relies on a detailed analysis of data, which many either don’t have access to or have the skills to interpret, causing a lot of businesses to fall at the first hurdle.

“What’s needed are more robust employee workforce data and pay analytics that support leadership teams with actionable insights about how to close equity gaps across the entire workforce.”

Some 1,011 global HR and business leaders, as well as employees from various industries and demographic groups, were surveyed for the 2023 pay equity and transparency study.

Organisations that did conduct pay audits were not completing them very often. Only 9% of HR leaders reviewed their pay equity data monthly, and 30% said they only audited pay data once a year.

Half of respondents said pay inequities existed in their organisations, and in the UK only a third of black and half of Asian respondents found their employer effective in achieving pay equity.

Three-quarters of HR leaders said addressing pay equity and transparency is a priority for their organisation, but only 42% of employees agreed.

HR Systems opportunities on Personnel Today

Browse more HR systems jobs