Finding the difference in average pay between men and women is a more complex undertaking than it might appear. If you simply compare the average salaries between the two groups, you will often find that men are paid more. When taking other factors into account, such as job level, performance and competences, the pay gap will look different. Sometimes it disappears entirely, sometimes not.
No organization has inequality as part of their pay philosophy. However, unfairness might still hide in the details, and the small individual differences in pay can grow into a big systemic problem, if it is left unchecked, which is one of the motivating factors behind the European Pay Transparency Directive.
Better achieve fairness and clarity through a thorough an Equal Pay audit. We can help you with that.
WE CAN HELP YOU WITH ALL THE STEPS - FROM PREPARATION TO REPORT
With the new EU Directive on pay transparency, companies across Europe are preparing to implement measures that ensure compliance with the new rules; however, we do not yet fully know what the requirements will be, and which deadlines will apply in each country.
The work is ongoing, and the directive must be transposed by all European member states by June 7, 2026. Once officially adopted by a member state, implementation begins in collaboration with the labor market partners; hence, the country specific rules are, as of yet, unknown.
However, the Directive does include economic consequences and sanctions for companies that are not fulfilling the minimum requirements within three years; thus, we can expect local rules to include such measures.
What we already know is that if you are a company with more than 100 employees you will need to be able to:
At the moment, many companies are facing a situation where the salary for newly hired entry level and senior positions alike, exceed the salary for similar existing employees. Company seniority and loyalty becomes negative for the employees due to the current market conditions. This could lead to a quitting spur if not anticipated and dealt with.
The first step toward rectifying potentially unfair pay gaps is knowing they exist. We can help you identify these. We also recommend that you prepare for the implementation of the Pay Transparency Directive by implementing a Job Architecture that includes pay ranges / Salary bands.
This provides you with a tool that gives you the vital overview of your current pay landscape, and also provides a way to compare salaries with truly similar positions. Additionally, Hiring Managers will be able to define the role incl. responsibilities and expectations more precisely, and include a pay range in the job ad.
We can help you asses the challenge ahead through a Pay Transparency Audit. We can also create a suitable Job Architecture that ensures compliance with the EU Directive on Pay Transparency.
Despite the immediate workload this new directive will cause in most HR departments, embracing it early is also an opportunity to brand your company as fair employer, actively working to closing the gender pay gap and advancing diversity.
This could be a competitive advantage in a market that currently belongs to the workers rather than the employers in many industries. It’s an opportunity to be market leaders and we are here to help you on your way.
To help you achieve an overview of your current equal pay situation, we offer a Pay Transparency Audit in which we review your current situation to identify potential issues that may cause challenges when the EU Pay Transparency Directive enters into force.
The format of the audit is a half-day workshop with the purpose of assessing your organization's readiness for implementation of the directive, as well as highlight major risks. Observations are based on the information obtained in the workshop, and the recommendations represent the professional advice of Nordic Reward Partners.
The audit concludes with a report that provides an overview of the various areas and risks as well as recommendation on the most important immediate actions needed to be ready when the directive enters into force.
The steps will change from company to company - our approach remains the same.
We build on a foundation of data, analyzing and reviewing the available variables that are comparable throughout the organization, using gender neutral criteria.
We review your data, making sure that the positions compared are of equal importance to the organization.
Where possible, we review the data within each category down to the individual level. We apply statistical modelling, building on solid regression analysis which will estimate the casual relationship of differences in pay, and root out possible inequalities.
Our findings are presented in a final report, containing both our conclusions as well as the statistical documentation of our process.
We help you fix the problem, fairly and without disruption
Fairness and clarity are central to any modern Reward Strategy. Gender-based inequality in pay is fundamentally unfair, and often the result of lack of transparency. When fixing the issue it is important to increase the fairness, not just swop one unfairness with another.
Some issues can be easily addressed in the next yearly salary review, others need to be addressed in stages, to avoid a disruptive effect on the internal Job Architecture and employee satisfaction.
Once the problem is fixed, we help put in checks and balances, to keep the problem from reappearing. That is good governance, and we can help you with that too. This way you are also ready when the Pay Transparency Directive enters into force.
Being compliant in any or all of the 27 European member states will at times require local finesse and expertise or boots on the ground. This is why we co-founded the Pay Transparency Alliance, joining together the most forward-thinking and dedicated pay transparency experts and solutions providers across Europe.
Transparency is a prerequisite for creating equity and to be transparent it is necessary to have a well-functioning structure in place.
We recommend building a job architecture that allows you to compare across functions and show your employees what it takes to advance and reach their individual career goals.
We have created a web universe around Pay Transparency, where we continuously update you the latest developments, provide inspiration and discuss the various aspects of the new EU directive.
We also strive to share news and best practices about the EU Pay Transparency Directive on our specialized LinkedIn channel.
We are here to support you with any Reward-related issues you may be facing, whether it's specific projects or an interim helping hand while you fill a chair.
Reach out for a non-obligating chat about the possibilities.
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