Tackling Pay Equity in the Insurance Industry

For example, some claims adjusters work from an office, while others need to assess claims in person, and are dealing with fumes while roadside or out in hazardous conditions following a fire or hurricane. Are they substantially similar, or different enough to warrant a separate look? Both groups may have the same title, and require comparable skill, effort, and responsibility, but their working conditions are different.

In contrast, actuaries’ and other analysts’ work requires processing data while working from a desk. In this case, it’s possible to group all of the actuaries and analysts together in one group. There are best practices for the insurance industry that are worth reviewing as far as grouping employees.

3. Control for job-related factors.

Once groupings are set, apply controls. These are neutral, objective, job-related factors that reflect a company’s compensation practices for setting and determining pay in each of those groups. Use “direct controls” — objective, non-biased policies that directly measure skill, effort, responsibility, or working conditions — such as hire date, location, educational attainment, years of relevant experience, etc. Avoid “indirect controls” — internally created systems that proxy skill, effort, responsibility, or working conditions. Common examples of indirect controls are performance ratings and job level/grade assignments.

4. Identify and review protected classes.

Pay equity laws at the federal and state levels vary in terms of which protected classes are covered. All pay equity laws cover gender, some cover race/ethnicity and others cover other protected classes such as national origin or sexual orientation. Analyses can vary based on company locations and applicable state laws, as well as the business goals.

Even if companies only plan to remediate pay based on gender, analyzing other categories offers a more complete picture. Many national or global employers have an interest in maintaining consistent standards across the organization, so it is often wise to default to including multiple protected categories in a pay equity review for reasons apart from minimal legal compliance.

5. Make final adjustments before allocating budget.

There are almost always non-economic adjustments needed, which are too often overlooked by employers. If employees are misclassified in a group or if pay practices aren’t fully captured with the initial controls, it is wise to update individuals or the structure of their work to reach resolution without economic remediation.

Often this means cleaning up or correcting data by investigating outliers, moving individuals to a more appropriate group, and ignoring ‘unicorn roles,’ where a position does not have others performing substantially similar work. Iterating on these steps helps to ensure employee groups are reasonable and sorted with the right controls.

By following these steps, any company can create an accurate baseline for evaluating and ensuring ongoing pay equity. Using software to automate the process accelerates the analysis, enabling quick iteration and changes to sustain a company’s pay equity over the long-term. It also vastly improves efficiency in this process, enabling organizations to see critical information without having to wait for analysis to come back from a labor economist or statistician. Lastly, perhaps most importantly, be transparent by carefully and clearly communicating the results internally with leadership and employees, as well as externally.

Pay equity is an enduring movement that continues to gather strength and one to which we all can contribute.

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Zev Eigen is the chief data scientist at and founder of Syndio, a workplace fairness analytics platform.