According to the OFCCP FAQ’s regarding the utilization of a regression analyses tool to determine disparity in compensation, the calculations in software are “relatively simple.”
From the OFCCP FAQ’s:
“Given that a regression analysis is a complex process, not all contractors will be able to undertake one in order to comply with the Voluntary Guidelines. What should these contractors do?
OFCCP realizes analysis of employee compensation is a challenging frontier for many contractors. In discussion with contractors and consultants, OFCCP has found that the key challenge in implementing the new procedures will be the creation of the similarly situated employee groups (SSEGs). Once the SSEGs are created, the task of conducting a regression analysis can be undertaken with little statistical expertise through relatively inexpensive software packages that yield sufficiently informative results. OFCCP does not expect contractors to hire statisticians or economists to perform this work or to buy expensive software systems.
OFCCP will develop compliance assistance tools to assist with performing regression analyses. In addition, OFCCP’s acceptance of a simple SSEG-by-SSEG approach for the Voluntary Guidelines will help to eliminate some of the complexity that is associated with other types of regression analyses such as the pooled analyses discussed. While some statistical expertise will enable a contractor to better conduct and evaluate the regression analyses, conducting a regression analysis on each SSEG using the primary pay factors is relatively simple with modern computer software.”
We agree with that assumption as Biddle has created and sells a compensation analyses software tool called COMPARE 2.0 that is incredibly “easy to use.” However easy COMPARE 2.0 is to use, though, the interpretation of the regression model is anything but easy.
If you are considering using a regression model to identify pay disparity and you are not sure how to assess your skills and needs, give us a call. We’ll be happy to run through the process with you.
For assistance, contact:
John Piatt (800)999-0438 ext. 118 or email@example.com
Nancy Tipton (800)999-0438 ext. 175 or firstname.lastname@example.org
- COMPARE Overview (a great place to start if you are new to COMPARE or considering purchasing the software)
- COMPARE: Identifying Statistically Significant Differences in Pay
- COMPARE: Computing Liabilities
- COMPARE: Understanding Multiple Regression