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Compensation Analysis

Every compensation analysis conducted by our staff represents a customized work product where we take into account our client's specific situation, needs and parameters..  We do not run "canned" or fully automated analyses because we are very aware that the blanket use of statistics or other analytical techniques  nearly always risks the generation of inaccurate or invalid results.  Further, our long experience conducting analyses for federal contractors and other organizations has shown us that the answer to the question "Is there evidence of pay disparity in our jobs?" is never simply a matter of statistics.

Rather, we believe the best way to approach analyzing compensation is to take into account a broad variety of factors including the size of the differences in pay between groups, the pattern of explanatory factors when comparing the favored/highest paid group(s) with each of the lesser paid groups, whether or not their are statistically significant differences in pay, and other factors that impact the final determination that a disparity does or does not exist.  In other words, it cannot be done solely by a computer.  Rather, it requires the careful review and hands-on analysis of an individual who understands federal requirements, equal employment opportunity regulations, statistical analysis, and the needs of federal contractors.

This is why one of the greatest challenges that contractors face is not simply computing the statistics involved in compensation analysis but rather the subjective analyses associated with making sense of the actual results and conducting a cohort analysis that helps to identify whether adjustments in pay are actually necessary or if they are explained by the data as being appropriate,

The Higgins Group strives to take as much of the pain as possible out of complying with the OFCCP's requirement for analyzing contractor compensation.  Our analytical procedure strives to follow the gold standard of scientific analysis while providing reports and results that are clear, powerful and easy-to-understand.  Further, we do this at a cost that is perhaps the lowest in the nation for the level of analysis we conduct.

All Our Compensation Analyses Include

  • Statistical analysis comparing the highest paid (Favored) group with each of the lesser paid groups on up to seven (7) separate components of compensation.  For example, we can analyze total compensation, performance incentives, bonuses, dollar value of stock awarded, overtime, etc. 
  • Analysis of up to ten (10) pay drivers/explanatory factors (e.g., Time in Grade, Service Years, Job Performance, Education, etc.) to aid in explaining observed differences in each of the included measures of compensation.
  • All statistical analyses use the appropriate statistical test as suggested by the data rather than simply using the same statistical test for all situations.  
  • Where statistically significant differences are observed between the Favored and lesser paid group(s) and sample size permits, we conduct a Multiple Linear Regression analyses to determine whether or not the statistical evidence appears to suggest that the difference is due to legitimate job-related factors.
  • A comprehensive summary report to help your organization's compliance staff identify, assess, and determine the appropriate course of action for each job title or pay analysis group.  The report identifies a) identification of the favored group in each job, b) calculation of the percent difference between the Favored group an each lesser paid group, c) analysis of pay drivers/explanatory factors to determine whether they support observed differences in pay, d) calculation of "pay warnings" to allow your staff to quickly assess the extent of any problems indicated by pattern of pay drivers/explanatory factors, e) identification of whether any statistically significant differences were observed, f) flagging of each pay variable to indicate whether a statistically significant difference was observed, no statistically significant difference was observed, or no analyzed due to sample size and finally, g) a "Cohort Warning" level is identified to aid the compliance analyst in determining whether a job title or pay analysis group needs to be examined more closely due to potential disparity issues.
  • A Cohort Analysis summary report that includes the Higgins Group's "Cohort Matcher" and "Pay Warning" tools that seek to significantly reduce the amount of time and effort associated with conducting a cohort analysis.
  • Online meeting to review and discuss findings and answer any additional questions you or your staff may have.

What does it cost?

One might expect an analysis of the depth and with the extent of customization included in a Higgins Group analysis to be expensive.  However, the typical cost of a compensation analysis conducted by The Higgins Group is usually less than $950 per Affirmative Action Plan.  Each analysis is conducted by a professional statistician and researcher and is custom tailored to the specific situation presented by the client's line-of-business, data, and needs.


4111 Orange Grove Avenue Sacramento CA 95841 us              +1.9162041749