The Pay Equity Software Buyer’s Guide
This buyer’s guide is designed to help HR and Total Rewards/Compensation decision makers evaluate pay equity tech options by providing a comprehensive overview of assessment criteria and key features.
In this guide:
Pay equity has become a must-have
90% of companies have conducted a pay equity analysis at some point.
Pay equity is shifting to ongoing management
50% of organizations now conduct pay equity analyses more frequently than annually.
Syndio | 2023 Workplace Equity Trends Report
Want to download this Buyer's Guide as a PDF?
Want to download this Buyer's Guide as a PDF?
Pay equity matters more than ever — but it’s also more complicated than ever.
In the transparency era, pay equity is no longer optional — and the need for consistent and continuous pay explainability has entered the compensation conversation.
The urgency to get pay equity right has never been greater as the transparency era brings pay into the open. Companies must comply with new and emerging laws and address practical considerations such as geo-differentials, compression, and competitiveness, all while facing pressure from investors to track social issues in their ESG framework. And, as pay is laid bare for all to see and employees start asking tough questions about their pay, organizations must be able to clearly articulate how they determine pay, how they apply pay policies to individual employees, and whether pay decisions are equitable and consistent: an emerging business mandate known as “pay explainability.” A once a year analysis does not answer these questions for you — you need always-on software to check and adjust your assumptions as employees continue to enter and exit your company. Ensuring pay equity — and communicating about pay clearly — is no longer just an ethical imperative but a business necessity.
Pay equity software has emerged as a powerful tool for companies seeking digital transformation to more efficiently maintain pay equity in an ongoing way.
Leading companies are leaving behind the annual “pay audit” mindset for a year-round equitable pay management approach aimed at preventing issues. This shift is driven by the recognition that pay equity is not a one-time problem to be fixed, but rather an ongoing challenge that requires continuous attention. However, in a slowing economy, resources are tighter than ever for most HR and Compensation teams, making efficiency a key focus. The traditional approach of outsourcing annual pay equity analyses to law firms and consultants is too slow and retroactive to keep up with increasing transparency demands. Pay equity software can help companies devote fewer resources and less time to analyses through automation, as well as reducing remediation costs over time. By using pay equity tech to gain data-driven insights and continuously monitor their progress, organizations can more effectively reduce compliance risk, keep up with changing legislation, and embed equity into everyday pay decisions. This also fosters a culture of transparency which helps build trust and improve retention. As we move into an era of increased scrutiny around compensation practices, pay equity software is poised to become a critical tool for any company looking to stay ahead of the curve
But not all tech is created equal.
There’s a lot of noise in the pay equity software arena that can make it difficult to determine the optimal solution for your organization’s needs. Additionally, while many companies are leaving behind slow pay equity analyses conducted via consultant and law firms, they aren’t quite ready for a fully self-service, hands-off solution due to the complexities and pressures involved. The best value of both worlds is a vendor who offers a balance of user-friendly software backed by best-in–class methodology with ongoing access to expert advice and guidance.
Who this guide is for
- Total Rewards/Compensation professionals
- CHROs
- People/Workforce Analytics professionals
- HR tech buyers
- Corporate Communications professionals
Questions we’ll answer
- What are key criteria for selecting pay equity technology?
- Who should be involved in the evaluation and decision process?
- How to ensure buy-in and overcome internal objections to investing in pay equity software?
"After two years of using Syndio, we have no more statistical pay gaps based on race, gender, or age. Syndio has helped us achieve this outcome."
Senior Director, Total Rewards
01
Evaluating pay equity tech
- Know what to look for
- Ask the right questions
Know what to look for
Below are the key assessment criteria which elevate a pay equity solution to top-tier consideration.
Uses best-in-class methodology
Not all analyses yield the same degree of accuracy. Proven, expert-driven approaches around groupings, controls, remediation, root cause analysis, and other features strengthen the analysis.
Identifies the root of pay disparities to eliminate them with finality
Not all analyses yield the same degree of accuracy. Proven, expert-driven approaches around groupings, controls, remediation, root cause analysis, and other features strengthen the analysis.
Includes ongoing support from experts to help you take meaningful action
Goes beyond pay equity to close pay gaps
With so much legal complexity around pay equity, you need the peace of mind that your chosen solution is validated by legal experts well-versed in privilege protection.
Has been vetted by lawyers to mitigate legal risk
With so much legal complexity around pay equity, you need the peace of mind that your chosen solution is validated by legal experts well-versed in privilege protection.
Simplifies global pay equity
It’s not easy to manage the complexity of pay equity across countries or jurisdictions with different currencies, rules, and reporting requirements. Look for software that lets you run global analyses by country and across all your employee groups in a matter of seconds, with one-click reports for global statutory pay reporting.
Purpose-built comprehensive solution for pay equity
Is pay equity the company’s core purpose? Many companies have tacked pay equity calculations onto their main tech, but these add-on solutions typically don’t run a true pay equity analysis (but rather, look at averages). Software purpose-built for pay equity will have the full spectrum of what is required for a comprehensive pay equity analysis.
Ask the right questions
Most pay equity tech can tell you what pay disparities you have and who they impact, but fail to pinpoint why those disparities are happening in the first place. Learn the features and capabilities you should prioritize to ensure you get maximum value out of your investment.
01 Streamlined data management
02Efficiency and ease of use
03Comprehensive analyses
04Customizable analyses
05Scalable to full global analyses
06Tailored remediation recommendations
07Robust reporting tools and services
08Included support and expertise
09Validated legal compliance
10Powerful root cause prevention
11Highest levels of data security
12Smooth implementation, adoption, and customer experience
13Credible customer roster
14Capabilities to advance your equity journey beyond pay
Streamlined data management
Unlock insights more quickly
- How easily and quickly are you able to upload your data?
- Do you have to configure your data according to a specific template?
- How often can you refresh data, and can you do so without having to recreate your work?
- Has the platform been tested to ensure that it can ingest and quickly analyze large data sets?
- Can you continuously fine-tune your analysis without the need to re-upload your data and start over every time you make a change or iterate?
Efficiency and ease of use
Take the frustration out of pay equity
- How quickly and easily can you run an analysis?
- Is the user interface clean and straightforward so that the data and results are the focus? Or does the UI feel cluttered, clunky, and confusing?
Comprehensive analyses
Maximize your analysis
- Can you analyze all types of compensation (e.g., base salary, bonus, equity, incentive plans) and all comparable groups you want to consider (e.g., gender, race, disability, veteran, or caregiver status, intersectionalities)?
- What type of analysis does the software run (e.g., regression, rank-sum), and why did they choose it?
- Do they support your use cases (e.g., remote, international/global) Do they have features that help streamline those use cases?
Comprehensive analyses
Maximize your analysis
- Can you analyze all types of compensation (e.g., base salary, bonus, equity, incentive plans) and all comparable groups you want to consider (e.g., gender, race, disability, veteran, or caregiver status, intersectionalities)?
- What type of analysis does the software run (e.g., regression, rank-sum), and why did they choose it?
- Do they support your use cases (e.g., remote, international/global) Do they have features that help streamline those use cases?
Scalable to full global analyses
Manage the complexity of global pay equity
- Can you run global analyses by country and across all your employee groups in a matter of seconds?
- Do they have consulting to provide guidance around maintaining pay equity in the face of any workforce, business, or legislative changes?
- Can you analyze starting pay in a candidate's or region's local currency?
- Can you request reports in a single click for global statutory pay reporting - along with step-by-step guidance and communications advice?
Tailored remediation recommendations
Quickly build a remediation strategy aligned to your budgeting rules
- Do they offer tools that help you determine a remediation strategy and budget based on your constraints (e.g., excluding employees on a PIP, caps and floors for adjustments, etc.)?
Robust reporting tools and services
Communicate confidently about results and progress
- Are there any reporting tools or services available to help you effectively communicate your pay equity analysis results and progress to important stakeholders such as employees, investors, and others?
Included support and expertise
Tap into expert guidance along every step of your pay equity analysis - from controls to communication
- Does the team that will be supporting you have experience navigating the legal side of pay equity, including pay equity class action lawsuits?
- Do they have people on staff who have led pay equity analyses for notable companies?
- What is the support model? Do they provide ongoing guidance around grouping employees, applying controls, and assigning a remediation plan, as well as ongoing communication to stakeholders?
- What is their support pricing model? Do they charge for any support and consulting by the hour? Will you know to the penny how much it will cost to work with them for a year?
- How do you contact support? What is their response time? (call center)
Validated legal compliance
Mitigate legal risk and feel peace of mind
- Have they thought through attorney-client privilege and can they explain what features exist to preserve it?
- Can they explain how they would handle discovery requests, and what actions or transactions are recorded and tracked?
- Is the vendor's analysis and remediation methodology compliant with EEOC and DFEH expectations and methods?
- Can the vendor help you conduct privileged pay analysis for each establishment - and prove it to OFCCP without waiving privilege?
- Can they help you run statutory pay reports in countries like the UK, France, and Switzerland, and in California and other states?
Powerful root cause prevention
Identify the underlying causes of disparities, so you can eliminate them with finality
- Can they explain how their software identifies root causes of pay issues?
- Do they provide real-time recommendations for pay decisions (i.e., starting salaries, promotions, and lateral moves)?
- Are you able to put the tool in the hands of recruiters and hiring managers (with limited views) so you can embed equity into day-to-day pay decisions?
- Can you analyze the impact of proposed compensation changes before they go into effect?
- Do they provide tools to help you understand if your compensation policies are operating as intended?
- Can you adapt the technology to provide meaningful insights throughout the year?
- Can the solution support your use cases (e.g. global pay equity, remote workers, crisis mitigation, or OFCCP compliance)?
- Can you perform compensation program diagnostics to help you model changes to your pay programs (e.g. use of geographic differentials, changes to your salary ranges, etc.)?
Highest levels of data security
Protect your people data
- What measures do they have in place to ensure the highest data security? Do they have any data security certifications (e.g., SOC 2 Type 2 certification)? Do they comply with GDPR requirements?
- Do they offer role-restricted access for different levels of users (e.g. if recruiters can use the tool, is their access restricted just to the data they need)?
Smooth implementation, adoption, and customer experience
Get up and running quickly
- What does their implementation plan look like? Do they give clear timelines and a communication plan? What support, resources, and training do they provide to onboard your team onto the tool?
- Do they listen to and make changes to the product based on customer feedback and concerns? Is it easy to provide general feedback about the solution? Do they have a Customer Advisory Board to include customer requests and requirements in their product roadmap? How is the overall customer experience? Do they have a resource center? Do they offer educational and thought leadership content, such as webinars, blog articles, guides, reports, case studies, etc.?
Capabilities to advance your equity journey beyond pay
Close your median pay gaps by improving pay equity and opportunity equity
- Can the vendor help you address median pay gaps by analyzing equity in representation and opportunities, in addition to pay?
- What is their long-term product roadmap, including key capabilities coming out in the new year?
Credible customer roster
Feel confident that the solution is trusted by brands you trust
- What does their typical customer profile look like (e.g., enterprise vs. SMB, global workforce vs. U.S.-only, etc.)?
- Do they have customers of your size and/or in your industry?
- Are they working with the world's most admired companies?
- Are they able to provide testimonials, case studies, or references from their customer base?
02
Selection toolkit
- Who to involve
- Evaluation checklist
- Objection handling
- Product scorecard
- RFP template
Who to involve
Pay equity used to be thought of as the domain of legal teams and Compensation professionals. But as fair pay becomes a strategic priority for human capital, investor relations, and even brand considerations, this attitude is shifting. Pay equity now touches stakeholders and responsibilities across the company. The first step in finding the right pay equity provider is to bring together a cross-functional team, including leaders from Compensation/Total Rewards, Human Resources, People Analytics, Talent Management, DE&I, Legal (internal or third-party), and IT in order to achieve consensus and buy-in, align overlapping priorities, centralize efforts, and coordinate communications.
Evaluation checklist
Below are steps for making an informed decision about which type of pay equity technology is right for your organization.
Identify champions and stakeholders in your organization who will need to be consulted during the decision phase.
Who should be involved in demos?
Who should be presented with the evaluation recommendations?
Whose approvals are needed and who has final decision-making authority?
Establish timelines and budget.
When do you need to decide on a tool?
When do you need the tool implemented with the relevant team onboarded
When do you need to conduct your first pay equity analysis with the tool?
Develop a list of internal needs and priorities.
What is your main goal in purchasing pay equity software?
What are your major pain points with your current approach to pay equity?
What are your capability gaps around pay equity?
What are key priorities and must-have features? What are nice-to-have features?
Create a list of questions to ask (See pages 7-9 above for recommendations)
Research vendors online to narrow down to a short-list.
Review online tech ratings
Review their online product content
Note their public customer list
Read case studies
Contact short-listed companies for demos and references (and/or develop RFP if needed for your procurement process).
Schedule and attend demos
Collect and review customer references
Ask questions during and after demos (See the "Ask the right questions" section on pages 7-9 above or check out 25 Questions to Ask When Evaluating Pay Equity Tech)
Score vendors based on your evaluation criteria.
Use an evaluation scorecard (Download Syndio's Pay Equity Software Evaluation Scorecard here)
Decide and get buy-in on a solution.
Present evaluation recommendations to stakeholders
Arrive on a consensus
Move forward with purchasing, implementation, and adoption
Identify champions and stakeholders in your organization who will need to be consulted during the decision phase.
Who should be involved in demos?
Who should be presented with the evaluation recommendations?
Whose approvals are needed and who has final decision-making authority?
Establish timelines and budget.
When do you need to decide on a tool?
When do you need the tool implemented with the relevant team onboarded
When do you need to conduct your first pay equity analysis with the tool?
Develop a list of internal needs and priorities.
What is your main goal in purchasing pay equity software?
What are your major pain points with your current approach to pay equity?
What are your capability gaps around pay equity?
What are key priorities and must-have features? What are nice-to-have features?
Create a list of questions to ask (See pages 7-9 above for recommendations)
Research vendors online to narrow down to a short-list.
Review online tech ratings
Review their online product content
Note their public customer list
Read case studies
Contact short-listed companies for demos and references (and/or develop RFP if needed for your procurement process).
Schedule and attend demos
Collect and review customer references
Ask questions during and after demos (See the "Ask the right questions" section on pages 7-9 above or check out 25 Questions to Ask When Evaluating Pay Equity Tech)
Score vendors based on your evaluation criteria.
Use an evaluation scorecard (Download Syndio's Pay Equity Software Evaluation Scorecard here)
Decide and get buy-in on a solution.
Present evaluation recommendations to stakeholders
Arrive on a consensus
Move forward with purchasing, implementation, and adoption
Overcoming objections to get internal buy-in
Under current economic constraints, internal objections to investing in pay equity software can be a significant hurdle. Despite the proven long-term benefits of addressing pay inequity and achieving equal pay, some leaders may perceive it as a “nice-to-have” rather than a priority, or they may feel that resources are better spent elsewhere. However, investing in a pay equity solution is an essential step for companies looking to remain competitive and committed to workplace fairness. Here are some tips for overcoming internal objections.
Calculate the cost of your current system/process and annual remediation cost and compare to projected savings in time, resources, and lowered remediation costs with new software.
Remember, cheaper solutions that can't scale or don't meet all of your needs will only create more costs down the road. "Good enough" isn't good enough when failure to ensure pay equity means the potential for lawsuits. Inequity in the workplace also creates hidden costs in lost productivity and the cost to replace employees by contributing to decreased employee engagement and retention.
Workers are six times more impacted by pay equity than they are by level of pay. In other words, if you want to properly allocate budgets, fix the disparities in pay before you give everyone a raise.
Josh Bersin • Global HR analyst | Predictions for 2023: Redefining Work, The Workforce, and HR, January 2023
Today, Salesforce resolves pay disparities annually. And while total remediation hovers around $3 million a year, they have roughly tripled their employee base since their first analysis. This means the average [remediation] cost per employee has decreased year over year. Dunlap attributes this to the fact that when they correct compensation for an individual, it stays corrected.
Lay out what's not working in your current process. Is it too slow? Too retroactive? Are you failing to address root causes, leading to the same issues cropping up over and over? Are remediation costs unpredictable? Are you trying to move to a more modern, ongoing management approach for pay equity? Tell a story about why this change is necessary for improved efficiency, risk mitigation, compliance, and communication around pay equity.
[Pay equity] is not a one-time intervention. In 2023 it's important to revisit pay practices in a systemic way… Every time a new person is hired, promoted, or moved, your pay system may need adjustment."
Josh Bersin • Global HR analyst | Predictions for 2023: Redefining Work, The Workforce, and HR, January 2023
Be clear about the pressures that are making pay equity an urgent business priority: expanding pay transparency legislation, the need for compliance, pressure from employees to be equitable and explain pay, and the fact that your employer brand reputation is at stake. In an era of belt-tightening, HR leaders also need to tap into the efficiency gains made possible by digital transformation. There is risk related to not taking action. Tie pay equity back to your company values - yes, pay equity is proven to be good for business, but it's also the right thing to do and an actionable way to "walk the talk" of your stated values. Show how you'll measure success using your chosen tool and providing a reporting plan that ladders up to an internal and external communication plan.
Check out The Vital Importance of Prioritizing Workplace Equity During Economic Uncertainty for more insights.
100% of companies have missing or messy data - the right technology and team of experts can help you impute your data and work around gaps. And the best part? A pay equity analysis exercise becomes an opportunity to clean up your data and create a plan for what your company needs to collect to conduct more robust analyses going forward. This can become a touchpoint with leadership about the necessity of putting muscle behind the effort of employee data integrity. Additionally, when you identify additional data points to start collecting, you create an avenue to communicate with employees about your pay equity commitment, efforts, and progress.
Check out The Data You Do - and Don't - Need for Your First Pay Equity Analysis for advice.
Every company delivers compensation through some set of values and criteria, which means you have at least enough information to perform a baseline analysis. The right experts can use the clues in the data you do have - such as job titles, reporting relationships, levels of pay, departments, or countries/locations - to help you create the right job groupings to perform an analysis. Leading software can provide insights into how your company delivers pay, providing the opportunity to build or refine the design of your compensation structure.
Check out 5 Steps to Build Your Job Architecture and Ensure Pay Equity All At Once for tips.
Supporting proof points
Employees who perceive their pay as inequitable:
Have a 15% lower intent to stay with their employer than employees who perceive their pay as equitable
Are 13% less engaged at work than employees who perceive their pay as equitable
When orgs educate employees about how pay is determined:
Employee trust in the organization increases by 10%
Pay equity perceptions increase by 11%
The average increase in cost for every year a business waits, or fails, to close role to role gender gaps is $444,368
Companies that disclose they’ve conducted a pay equity analysis report nearly 8% higher mean five-year Return-on-Equity
Employees who perceive a pay gap (regardless of if the pay gap actually exists) experience a 16% decrease in intent to stay at their company
Recent pay equity and gender discrimination settlement have landed at $100M, $118M, and $175M
Evaluation tools
Not sure where to start?
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Download the pay equity software evaluation scorecard
Once you have your short-list of vendors, use this scorecard to refine your assessments of each in comparison to each other.
Does your company require a request for proposal (RFP) for software investments?
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Get the pay equity software RFP template
To help you target the right questions that reveal a vendor’s true capabilities and potential, we’ve compiled a template based on the questions we most often receive from pay equity software buyers. Don’t miss any make-or-break questions — download our battle-tested RFP template spreadsheet at the link below.
03
Achieving pay equity
- The Syndio difference
- Validate your pay equity approach
The Syndio difference
Achieve fair pay…
Leading companies are turning to PayEQ® from Syndio for a purpose-built pay equity solution that empowers you to solve pay equity issues now and prevent them in the future. With PayEQ you can:
...then go further.
Pay equity is only one contributor to pay gaps — organizations also need to address opportunity gaps. After helping hundreds of companies achieve pay equity, they asked Syndio for more — and we delivered.
Developed in partnership with HR, Total Rewards, and Talent Management leaders, our Workplace Equity Analytics Platform provides companies with the full toolset needed to measure and improve all facets of workplace equity — from reducing pay gaps to hiring, promoting, and retaining employees equitably.
Powered by Syndio, your team can focus first on building a foundation of modern pay equity analyses and processes, then scale to prevent pay disparities in starting pay, understand how pay policies impact equity, and measure and improve opportunity equity and representation.
17%
decrease in annual pay equity remediation cost for repeat users
320+
customers
77
world-class NPS rating*
*The average NPS for a software company is 41
30%
of Fortune’s Most Admired Companies
100+
countries represented in our customers’ analyses
7.2M
employees’ data analyzed
What our customers say
"Syndio’s client and domain expert personnel are superb. The interface and the functionality of the tool is really excellent. Companies like Syndio are blazing a trail for pay equity automation."
EXECUTIVE COMPENSATION LEADER
What experts say
"What [Syndio is] doing — which is very pioneering — is giving leaders and HR departments near real-time data on the equity implications of every pay, reward, hiring, and promotion decision.”
Josh Bersin • Global HR analyst | Predictions for 2023: Redefining Work, The Workforce, and HR, January 2023
Get Fair Pay Workplace certified
Validate your pay equity approach
Fair Pay Workplace is a nonprofit that validates companies after rigorous evaluation of their pay data and practices. To help standardize the way that companies measure pay and promote transparency, Fair Pay Workplace established and upholds a set of Rules & Standards built by an alliance of experts to ensure that when companies claim achievement of pay equity, they are backed by sound methodologies and accepted best practices.
04
Maximize your pay equity investment
- Key recommendations
- Future outlook
Go deeper into pay — then go further
Key recommendations for buyers
Find a solution that can tell you the why, not just the what.
Defending your pay equity analysis process with “We use tech” is insufficient for something as complex and important as pay equity. The risks associated with potential legal ramifications, transparency legislation, and employee/investor relations require a trusted, credible solution backed by sound methodology. This means investing in a tool that is validated by legal experts, is purpose-built for pay equity, includes ongoing expert support, and tackles problems at their root.
Future outlook
Pay equity is the starting point for a holistic workplace equity program.
As the spotlight shines on pay equity in the era of transparency, the need for pay explainability has emerged as an urgent requirement for every employer. But once employees understand their pay structure, they start asking more challenging questions about how to progress to higher-paying roles and why others are advancing before them. Additionally, even as companies solve pay equity, their pay gap can remain difficult to budge due to its roots in opportunity and representation inequities. All of this makes pay equity the onramp to a broader requirement: workplace equity.
Leading companies are starting to evaluate workplace equity holistically in order to more effectively address their pay gaps. Pay equity point solutions will be left behind in favor of a comprehensive workplace equity analytics platform that can measure and measure and improve all facets of workplace equity — from reducing pay gaps to hiring, promoting, and retaining employees equitably.
New to pay equity and software evaluations? Here is a glossary of terms to get you started.