Anita Lettink is a Future of work speaker, Payroll & HR Tech advisor, pay transparency author of the following books. She has spent 25 years in the HR industry, working in strategy, technology, consulting and outsourcing roles. Recent awards: LinkedIn Top Voice, Top 25 Future of Work Thought Leader and Top 100 HR Tech Influencer. This is a short summary of her insights on the stage of Fair Barcelona 2024.
"Paying people equally should not be a matter of law. It is good business. For employees, it comes down ultimately to what they take home." - Anita Lettink on stage at Fair Barcelona 2024.
With the advent of the EU Pay Transparency Directive aimed at reducing gender pay gaps and mandating more transparent pay practices, regulations seem to tighten and the first reporting deadline in 2027 approaches.
The implementation of the principle of 'equal pay for equal work or work of equal value' – an EU right since 1958 – remains a challenge today: in many cases, women are still paid less than men for doing the same job.
In fact, every single gender pay gap that we register, comes out negatively for women.
In the EU, women are on average paid 13% less per hour than men. The problem is systemic and we need to do something about it. Increased pay transparency and new enforcement mechanisms aim to combat pay discrimination based on sex and contribute to closing the gender pay gap.
The Council adopted new EU rules on pay transparency on 24 April 2023.
We're entering an era of transparency across the board, not only in payment.
Companies are starting to understand it's crucial to be more transparent if they want to become the labour of choice, especially in Europe where we are registering a labour shortage. Companies are expected to establish more accountable and fair pay systems.
According to Gartner, companies with more than 10,000 employees that are not equal pay compliant, for every year that they wait, the process will cost the company 500.000 EUR more.
When employees perceive pay inequities at their organization, their intent to stay is negatively affected. This has a substantial impact on employee turnover — moreso than a decline in manager quality or a pay freeze.
Why do we have the pay gap?
because we have pay inequity
because of opportunity inequity
pay differentials between functions
employee driven factors such as: men tend to apply for a role even when they know they are under-qualified, while women tend to apply even when they are overqualified
What is your employee dissatisfaction that is sitting in your company? For example, if you don't disclose the gender pay gap, employees will think it's 2-3 times worse.
According to an Indeed survey, when companies add the salary data to a job ad, they get 38% better applications.
EU requirements for equal gender pay have been viable since 2006, it's just we are not following it. European Pay Transparency Directive:
specify the pay and compensation before the candidate applies
don't ask the candidate how much they currently make
employees will have the full access to organisational information
companies that have a gender pay gap of more than 5% will need to go in a joint assessment within the Union to explain why and how you are going to change the status quo
the burden of proof goes from employees to employers
employees will be able to see how compensation packages are divided among employees
Pay needs precision. And companies now have less than 2 pay cycles to calculate, narrow and modify this gender pay gap context.
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