Addressing pay differences is just part of the process. Identifying their source is what leads to lasting equity.  

Finding a pay gap is one thing. Addressing it is another. As pay transparency expectations climb, HR leaders are learning that analysis is only the first step, and remediation is where the real work begins. 

Pay remediation is the process of correcting pay gaps once an analysis has found them, typically through strategic, targeted adjustments. The payoff goes beyond establishing fairness. According to Mercer, employees who believe they are paid fairly are 85% more engaged. And because employees who perceive fair pay are 21% more likely to stay, according to Mercer, remediation is a retention strategy as much as a fairness measure. 

But how can HR achieve that?  

Fix the Pay and the Practice 

Effective remediation identifies and closes the gap and the cause behind it. Brian Stucky, PhD, senior principal and pay equity solution leader at Marsh, explains that this process must remain unbiased.  

“The active conversations these days focus on how organizations can continue to make progress against their potential pay gaps while staying demographically neutral in their approach to pay remediation,” he says. “That doesn’t happen by accident but takes a thoughtful approach and typically some pretty deep work.” 

That work extends past analyzing paychecks. “We’ll sometimes say that remediating pay gaps is easy, but remediating the pay practices that lead to the gaps is more challenging,” Stucky explains.  

He expands, saying that the job isn’t done when the pay adjustments are made. Organizations should treat the work as complete only after they have also addressed the practices that created the gaps in the first place. 

Finding the Source 

Gaps rarely appear out of nowhere. Mercer’s research points to hiring pressure as a common culprit. When talent is scarce, employers often offer new hires more than their typical starting pay, which can leave newer employees earning as much as—or more than—longer-tenured, high-performing colleagues. Increased pay rates for in-demand jobs can have a similar effect between managers and direct reports or across job levels. In each case, pay is not following the drivers an organization may say it values, like experience and performance. 

But starting pay isn’t the only potential source of pay discrepancies. Promotions and merit increases can also lead to equity disparities.  

“These are the primary sources of bias and it does vary client by client,” Stucky says. “You need data and analysis to spot the source. The analysis doesn’t solve the issue; an organization needs to conduct pay practice remediation to fix it, but it can’t be uncovered without analysis.” 

Wondering where to start? Try Marsh’s Pay Equity Assessment Quiz.