Equal Pay analysis at AkzoNobel
By Henrieke van Bommel
AkzoNobel is a multinational Dutch company that specializes in paints and coatings. It is one of the largest and most prominent global coatings and paints companies. With over 35,000 employees worldwide, they wished to conduct a global equal pay analysis. After careful consideration, they chose Highberg as their partner.
Today, we interview Magdalena Guaia, Global Diversity, Equity & Inclusion Advisor, on her experiences with conducting equal pay research and Highberg.
Why AkzoNobel is conducting equal pay analysis
Magdalena, can you explain the reason for AkzoNobel to conduct an equal pay analysis?
“At AkzoNobel, we are dedicated to pursuing diversity, equity, and inclusion. We recognize that data is fundamental to understanding where our focus should lie and where improvements are needed. Data from the World Economic Forum shows it will still take 132 years to reach global gender equality in general versus a projected 136 years in 2021. We think it is imperative to address this matter while we also acknowledge our exposure to the same systems, social norms, and stereotypes that contribute to such disparities. With this awareness, we decided to put the equity lenses on our pay practices at AkzoNobel and roll up our sleeves to understand where we stand and where we need to act.”
Based on the needs of AkzoNobel, Highberg conducted an extensive equal pay analysis. The main question of this study is: ‘Do men and women receive equal pay for equal work’.
Our first goal is to understand AkzoNobel’s HR data structure, how HR data is gathered and in what systems, across all countries. Moreover, we need to understand the compensation and organizational structure. Based on this information, choices are made to include as much information as possible.
When knowing the HR data structure, aligning on equal pay and equal work within AkzoNobel is important. As a global organization, pay can differ amongst countries, with different valuta and xxxx. In the analysis, Highberg makes sure to correct for these differences.
After sharing the relevant data by AkzoNobel, Highberg is able to run several analyses to answer the main research question. We use a weighing model, which differs from a regression model. A weighing model gives the opportunity to explain the individual effects of different variables that could explain a difference in pay, for example, job level, country, or business unit.
Based on these analyses, we could share with AkzoNobel their pay difference, both before and after correcting for several variables.
Magdalena, could you share with us what the results told you? What were the most striking insights?
“Our results are encouraging, and we’re satisfied that the pay gap (after correction) within AkzoNobel is relatively small: 0.9% in favor of men. In simple terms, this means that for every 100 euros a male employee earns at AkzoNobel, a female employee earns 99.1 euros. This strongly outperforms the European Union average of 11% in favor of men, as well as industry competitors and other Dutch-listed industrial companies.”
Based on the results, AkzoNobel also implemented several follow-up steps. Magdalena, could you share with us what you are currently working on?
“Upon receiving the findings, our Rewards team began working on the few identified improvement areas with the objective of reaching clear actions to prevent the gap from growing. We will continue reviewing our gender pay gap to ensure we stay on the right track, going beyond what will be required by the European Union, and focusing on the figures corrected after adjusting for variables, aiming for equal pay for equal work.”
Equal Pay Certificate
Based on the outcomes of the equal pay analysis, Highberg also handed over the Equal Pay Certificate to AkzoNobel. Magdalena, what is the importance of the Equal Pay Certificate?
“The certificate is a confirmation that we are on the right track. It is a relief to know that we are not contributing to the unfair realities that feed the gender pay gap.“
Collaboration with Highberg
Last but not least, Highberg appreciated the trust from AkzoNobel in running the equal pay analysis.
Magdalena: “We wanted an external, expert perspective on this sensitive matter to ensure a comprehensive and unbiased assessment. Since our first meeting with the Highberg team, the interactions were friendly, expectations were clear, and the time frame was respected. Reviewing the gender pay gap is a very useful exercise, especially for companies that put equity as part of their core values. Highberg proved to be a solid partner in the process.”