Use Case
In analyzing pay equity, an organization studies pay rates and tries to determine whether gaps exist for equivalent work and qualifications. Linear regression points to gaps that the organization can address through review by a compensation expert.
Bottom-Line Returns
Ensure pay equity automatically without requiring expensive reviews
Top-Line Growth
Attract and retain top talent through ensuring employees are paid on value and performance
Efficiency Gains
Automate critical HR processes and allow employees to focus on more high-value tasks
Business Problem
Is there a pay gap at your company? If so, whose compensation may need correcting? Pay equity analysis helps companies investigate the variables behind different pay rates. Especially in an era of diversity, equity and inclusion (DEI), it’s important to understand whether and how variables like age, gender, and demographics affect pay. Smart organizations then make necessary adjustments for equitable compensation.
Besides incorporating acceptable variables like job title, grade, department, hire date, education attained, and salary, pay equity analysis incorporates data on unacceptable variables like gender, race, and age. Next-level information includes internal factors like disciplinary actions, performance reviews, and accumulated job expertise, plus external factors like industry-wide pay standards. Because that data resides in disparate sources and isn’t always numeric, gathering data is the most time-consuming step in the process.
Alteryx Solution
Regression modeling can help determine whether pay differences exist between people in different demographic groups performing similar work. It reveals whether unacceptable variables (i.e., those representing potential causes of bias, like gender) may have a statistically significant effect in lowering an individual’s pay.
The model starts with an anonymized data set including the factors that should drive an employee’s compensation, as well as the potential causes of bias that shouldn’t matter. Exploratory data analysis (EDA) highlights correlations among variables and identifies any errors in the data set. A linear regression tool then fits a model to the data set and points to significant and insignificant factors. The results show the company any factors that don’t fit the model. These factors can then be addressed with a compensation expert.
With Alteryx, you can:
- Pull in employee demographic data directly from HR platforms like Workday
- Use Alteryx Intelligence Suite to perform Exploratory Data Analysis (EDA) to uncover outliers in your data, find correlations, and identify errors
- Develop a regression model right in an Alteryx Designer workflow that reveals meaningful patterns in data that impact pay equity
1 – Data Connection:
Pull in employee and compensation data
2 – Advanced Analytics:
Perform exploratory data analysis to gain contextual understanding
3 – Operationalize Analytics:
Link model and outputs to automatically report on pay equity gaps
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