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The EP3 approach

Phase 1: Identify
EY - Phase 1: Identify
  • Use company’s HR data to determine if there are pay gaps attributable to race, gender or other protected characteristics
  • Identify which employees are affected, and by how much
  • Quantify the size of the gap

Phase 2: Fix
EY - Phase 2: Fix
  • Close pay gaps with targeted, phased pay raises (a gradual phase-in eases cost pressure)
  • Potentially restrain pay raises for overcompensated employees

Phase 3: Prevent
EY - Phase 3: Prevent
  • Determine root causes of gaps
  • Update HR policies
  • Align total rewards
  • Perform strategic workforce analytics
  • Offer talent management and recruiting strategies
  • Update employee performance management
  • Communicate and manage total rewards changes

Case study

An organization called upon us to analyze its HR data for potential pay issues. We found an unintended gender pay gap, and our HR data analysis identified the root cause to be the company’s process for setting starting salaries. In this organization, salary negotiation was an important factor determining an employee’s starting salary. The data showed that women tended to take the first compensation package offered by the company, rather than counter the initial offer. This led to women employees with lower starting salaries than their male colleagues in similar roles. Unbeknownst to the company, these pay gaps grew over time as pay increases (a percentage of base salary) were applied to base salary levels. We helped the organization adjust its HR and recruiting processes to prevent further gaps and helped the company to phase in targeted pay raises over time and close current gaps in a cost-effective way.

Our three-phase analytic approach, Equal Pay – 3 (EP3), uses a company’s own employee data and applies a rigorous methodology (not vague or irrelevant industry benchmarks) to identify pay gaps and explain them clearly and simply. We then help companies create a cost-effective plan to fix those gaps and prevent them from occurring in the future.