Why organizations should aim for equal pay
Promoting a diverse, equitable, and inclusive culture is key to good employer practices and maintaining a competitive edge. Equal pay is not only a moral obligation but also strategically important for organizations, offering benefits such as:
- Compliance with legislation and risk management
- Improved talent attraction
- Strengthened organizational reputation
- Building a sustainable and inclusive culture
Focusing on equal pay is not just a legal obligation but a strategic choice that contributes to organizational growth, strengthens reputation, and fosters a work environment where everyone can thrive. It’s about doing the right thing and acting smart for long-term organizational success.
Why partner with Highberg for equal pay?
- Insight into your organization: Our model is fully tailored to your organization, allowing us to optimally understand the situation.
- Unique weighting algorithm: Our algorithm, using the Rake method instead of regression, offers several advantages. It provides insight into which variables explain the pay gap, allows for subgroup analysis without rerunning the model, and offers in-depth insights for targeted follow-up actions.
- Compliance with regulations: Conducting an equal pay analysis with Highberg complies with (upcoming) regulations (EU, CSRD, and EBA). The results are readily available for reporting purposes.
- Equal Pay Certificate: Highberg’s Equal Pay Certificate demonstrates that your organization consciously provides equal pay for equal work.
- Actionable insights: Receive clear, practical insights into your organization’s pay structure. Understand the causes of pay disparities and get recommendations to address them, contributing to greater fairness at all levels.
- Continuous monitoring: Our solution goes beyond a one-time analysis. Implement continuous monitoring to proactively address pay gap issues and keep pace with changes within your organization and industry.
Pay gap vs. equal pay for equal work
Understanding the difference between the nominal pay gap and equal pay for equal work is essential, as each gap requires a different approach. The gender pay gap refers to the difference between the average hourly wages of men and women, adjusted for full-time and part-time work. However, this calculation does not account for differences in job levels or experience. Comparing the nominal pay gap is important to examine the advancement and representation of both genders at all levels of the organization.
Equal pay for equal work focuses on fair pay for the same tasks. Only employees performing the same work, with the same experience and performance, are compared. When these employees are not equally compensated, it is crucial to investigate potential biases in the pay system and promptly resolve any unexplained differences.
How Highberg conducts Equal Pay research
Highberg offers equal pay research for organizations with at least 100 employees. For companies with 500 employees or more, we can also calculate a ‘corrected’ pay gap and provide deeper insights into any pay disparities.
Each study begins with a kick-off workshop, where we discuss the specific organizational and pay structures and determine what data is needed for the analysis. Based on this, the organization receives a template for data collection. Once the data is received, Highberg conducts the data analysis. After the analysis is complete, the organization receives a report with key insights, recommendations, and an interactive dashboard. These results are discussed in a final presentation.
Examples of Equal Pay Research in practice
- Van Lanschot Kempen: for four years, Highberg has been conducting equal pay analysis for Van Lanschot Kempen. Based on the results of this analysis, they have been able to reduce the pay gap and achieve their targets.
- ProRail: Highberg has already successfully conducted the equal pay analysis for ProRail three times.
- Oxfam Novib: Highberg has conducted research for Oxfam Novib on the pay gap and pay differences for different diversity dimensions. For instance, in addition to gender, cultural background, sexual orientation, personality and physical/mental disability were also examined.
After the Equal Pay Analysis: Moving towards equal pay
When a pay gap or pay disparities are identified, it’s important for the organization to take action. The results of the equal pay analysis already provide guidance on where and what steps need to be taken. It is also possible to perform additional analyses on specific pay steps, such as hiring, bonuses, etc.
Companies can take various practical steps to achieve equal pay and close the pay gap, including:
- Reviewing salary structures: Evaluate and restructure existing salary systems to ensure equality.
- Regular audits: Conduct periodic audits of pay disparities to address them proactively.
- Use of tools: Utilize Highberg’s dashboard to gain more insight into pay disparities and obtain information on the correct salaries to prevent pay gaps.
- Training: Highberg also offers training on equal pay, giving the compensation team insights into the steps they can take to reduce the pay gap.
Leadership plays a crucial role in creating a culture that supports equal pay. It’s essential for leaders to recognize the importance of this issue and be actively involved in reducing pay disparities and the pay gap.
Equal Pay Certificate
Highberg’s Equal Pay Certificate demonstrates that the organization is actively working towards equal pay for equal work. This certificate provides:
- Confidence among employees that any pay disparities have been thoroughly analyzed.
- Attractiveness to potential employees, who see that the organization takes fair pay seriously.
- Demonstrable compliance with current and future legislation.
Highberg conducts a comprehensive Equal Pay analysis to qualify organizations for this certificate. This study examines both nominal and corrected differences between men and women.
Start working towards equal pay today!
It is clear that equal pay and closing the pay gap are crucial to the success of modern organizations. Highberg offers the expertise and tools to tackle these challenges. With a strong focus on data-driven analysis and tailored solutions, we can help your organization create a fairer and more inclusive work environment.
Frequently Asked Questions
In May 2023, the EU Pay Transparency Directive was adopted by the European Parliament. This directive requires companies with more than 100 employees to report salary differences and the nominal pay gap. Additionally, companies with a pay gap of 5% or more must conduct a pay evaluation and create an action plan. Employers who violate these rules may face fines.
Want to know more about this legislation? Read this article.
