If business leaders aren't already thinking about pay equity, they're going to need to-- soon. 

That's according to Kent Plunkett, CEO of Salary.com, the Waltham, Massachusetts-based technology company offering compensation data, software, and analytics and a four-time Inc. 5000 honoree. 

Pay inequity is a persistent issue in the U.S. That's clear in the limited progress made in closing the gender pay gap, for instance: Women still made 84 cents for every dollar men made in 2022, according to the latest Census data.

But in recent years, whenever the Salary.com team spoke with customers, it was clear they didn't know where to start to achieve pay equity in their organizations, Plunkett says. That inspired Get Pay Right: How to Achieve Pay Equity That Works, a new book he co-authored with employment attorney Heather Bussing. 

It's a timely topic, Plunkett says, considering the wave of pay transparency and pay equity legislation in recent years (including the pay transparency law in Massachusetts just signed last week). For companies growing their payroll, these laws could apply, he says: "If you have more than 100 employees, compliance regulations are coming to you." 

But there's also the fact that employees today can more easily access information about pay ranges for their roles, Plunkett says--Salary.com is just one of many available resources. So it behooves even smaller employers to work towards more equitable pay, Plunkett argues: "You don't want to be losing employees because other...employers are acting more equitably than you." 

There are three tenets that make up a successful approach to pay equity, Plunkett says. He broke each of them down for Inc. 

1.Identify equity gaps through internal analysis

In essence, pay equity means making sure your people are getting paid fairly for "comparable work," Plunkett says. Sure, there could be reasons why one role might deserve more pay than another, but those reasons should be explainable. 

To get to the bottom of this, companies can use an "internal equity analysis" to identify outliers, he says. Luckily, once those gaps are identified, they are fixable--and

it's relatively inexpensive to do so, Plunkett argues. Typically, employers account for compensation budget raises of about 3 percent, he says. By setting aside just 20 percent of that budget (or increasing that compensation rate budget by 20 percent), "you can solve your pay gaps, typically, in one year, two years, or three years," Plunkett argues. 

"The gaps aren't actually that big," he adds, but they compound, so doing this internal process "continuously" can help keep companies on track.  

2.Compare your rate to the market

Even after an internal analysis, companies can't just exist in a bubble, Plunkett says: "Internal equity still has to be externally competitive to the market." That means using external salary data to make sure your pay really is equitable.

Doing so is key for engendering trust within your organization, he adds, so that your team truly believes you're committed to pay equity and isn't easily swayed by other job offers. 

"You want your employees to know that you pay fairly because you get more satisfied workers," he says. "They trust management more, they trust leadership more, and they work more effectively."  

3.Communicate the 'why' behind the number

To Plunkett, transparency around pay means that a manager or HR professional "can sit down with an employee and explain to them how and why they are paid as they are" at the negotiating table.  

This can be uncomfortable for people managers, Plunkett admits--but he says it could be an engagement win, he says (something that many companies could sorely need, according to Gallup data). 

"The company, then, is being transparent about its decision-making, and they're willing to back up and show you evidence that they used a process that you can then judge the equity and the fairness of," Plunkett says. "That gets you true employee engagement."  

Information provided by: Inc.