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As the press release says, experts see some risks for employers and advise how to proceed to assess the gender pay gap objectively.
The data does not reflect the situation
According to labor market experts, the aim of this initiative to reduce exclusion is welcome, but to combat malignant exclusion caused by discrimination rather than different career options, companies must have comprehensive information or tools to identify such cases. .
“Simply dividing the population of a company into two parts and obtaining averages is not a complicated or useful analysis. It is the same as comparing the average remuneration of two companies, regardless of the number of employees, the sector, the dominant functions and deciding which “pays better” accordingly. Who pays better? For directors, administrators, programmers? Summaries and standardization can even be detrimental in this situation, ”says Povilas Blusius, compensation market research consultant for the Baltic Salary Survey.
Furthermore, the publication of such data threatens to reveal sensitive competitive details of companies, such as remuneration in specific positions.
“Imagine a scenario where a company has multiple positions, but only four women work in, say, a financial specialist position. If it is not usually possible to identify the remuneration for this position from the mean average remuneration, we will know exactly what remuneration is paid to the financial specialists of this company by publishing gender sections.
This can damage the competitiveness of the company. What’s more, with the click of a few buttons on the LinkedIn platform, you can find out who works in these positions and thus know the salaries of specific people in practice, ”says P. Blusius.
Damage to the reputation of companies
There are many companies in Lithuania that have been publishing a detailed calculated percentage of exclusion for their employees for several years and are happy with the good results. If Sodra publishes other data that shows that the exclusion is not small, but several tens of percent, this situation will look bad in the eyes of employees.
“The company management will have to explain the situation to the employees, but only a small part of the employees will know the differences in the calculations or take the time to understand them. Rather, they will take the position that the company has provided data. incorrect, which can damage the reputation of the company, ”says P. Blusius.
The expert adds that even if the changes are successfully presented to employees, there is a risk that candidates seeking job openings will be relying on inaccurate data from Sodra. Seeing a high foreclosure percentage can also lead to a negative view of the company.
“We actively discuss differences in pay with the business community and organizations, conduct detailed analysis and organize awards for equal pay. But the broader market still does not understand the method used to calculate wage gaps and the need for a “careful cut with a scalpel” rather than a “hammer” to assess these aspects.
Of course, perhaps the aim of this initiative is to provoke organizations to investigate in detail: after seeing the high level of exclusion, companies are likely to look for ways to explain the difference to them, to show that it is a statistical phenomenon and not the result of discrimination, ”explains Blusius.
What is the most important thing for companies to know?
For those who want to assess the gender pay gap objectively, the Baltic Salary Survey consultants provide the 4 most important steps that will help you do so more effectively.
1. Evaluate the details of the position.
If you have not already done so in the company, you should start with a detailed multifactor statistical analysis that includes other factors important to compensation. This analysis can be performed by both the company’s compensation and benefits specialists and outside consultants.
In this step, gender differences are analyzed, say, in the ranks of tellers, system administrators, or logistics professionals. This is already a much more useful section of the analysis than the blind average of all employees. In organizations with a work structure, this will be easy to do, especially if the assigned positions match the profiles of the employees in reality.
2. Evaluate the level of the employee
The next step is to consider not only the position but also the level of the employee who occupies it. It can be expressed orally, as ‘junior’, ‘senior’, ‘boss’, or by a number defined by a certain methodology, such as 47 according to Mercer, 13 Towers Watson, 2 Fontes, 16 – Hay.
In this step, gender differences are analyzed, for example, in the ranks of junior data analysts, senior accountants, or chief marketing professionals. This depth of analysis can no longer only identify potentially important differences, but also where and how effectively the problem of exclusion, if any, can be addressed.
Likewise, it is possible and advisable to continue the analysis including more important aspects – seniority in the company and in a specific position, previous professional experience or training. Be prepared to see very different numbers at each step of the analysis. It is also important to understand that it is not possible to assess all factors, and even the most detailed analyzes are only indicative and are used to identify potential problems.
3. Prepare to communicate with employees
Most companies don’t talk about the pay gap because they don’t want to provoke unnecessary discussions or they think the team isn’t interested in the topic. However, equal and fair pay analysis must be performed and the results must be proactively communicated. This way, employees are informed and there is no need to rush to get things done the first time when problems arise.
If the organization has not communicated before on this topic, it should start a little, with visualizations, a simpler communication style. If you don’t feel firm or think you sound subjective on the lips of managers, you can call in an outside consultant who will not only provide expert information, but will look more objective in the eyes of employees.
4. Train managers and personnel specialists
In sectors, especially those with a labor shortage, managers tend to have little room for discrimination as they seek to find enough talent to get the job done at any cost; whether male or female, it is important to be able to do so. the job. And even if certain statistical segregations do occur in such cases, managers may not even be aware of their existence.
Therefore, in addition to general training on the harms of discrimination, both managers and staff should be aware of the exclusion rates in their relevant positions on a regular basis. People who work directly with employees or who are involved in compensation management should be prepared to provide arguments in favor of statistical exclusion in a particular chain or position. These people should be well acquainted with the factors that influence pay and feel strongly about the issue.
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