Insights into the gender pay gap.
Equal Pay, Equal Pay Equal Work, Gender Pay Gap, Pay Equity, Pay Parity. Different terms for the same thing. That people who do the same work must receive the same pay regardless of their background, and that organizations must be able to demonstrate that this is the case.
In the Netherlands, we mostly mean gender (men/women), when we say background. In other countries, analysts also look at other diversity characteristics. Think for example of ethnicity or nationality.
The Netherlands seems to be following countries like the United States and the United Kingdom when it comes to this topic, so in the future, pay gap studies will probably broaden here too and come to include more diversity aspects than just gender.
More information? Feel free to reach out to us!
The importance of Equal Pay
The topic of Equal Pay has been gaining a lot of attention in recent years because of three different factors:
- Corporate social responsibility – It’s no longer acceptable in the 21st century that two people doing equal work don’t get equal pay because they have different backgrounds. Today, people hold companies accountable for their social track record. The ‘Where’s my €300,000’ campaign of Women Inc. is a good example. Being able to offer a clear insight into Equal Pay has become a hygiene factor.
- Legislation – It wasn’t just society that started to watch organizations more closely; legislative bodies were activated too. In the United Kingdom, organizations are now legally obliged to publish their pay gap performance. Similar regulations will soon be enforced in Europe too. In fact, some branches are already a step ahead. The European Banking Authority, for example, is introducing strict regulations from 31 December 2021.
- Tight labour market – An important motivation for organizations to get started with Diversity and Inclusion, the Gender Pay Gap in particular, is a tight labour market. Organizations that can show they treat everyone equally are more interesting for a wider group of people. This, in turn, provides the organizations with a bigger talent pool, increasing their chances to find top talent.
The Gender Pay Gap in the Netherlands
The good news is that the gender pay gap is getting smaller. The bad news is that in 2019, women still earned 14% less than men in the Netherlands, in line with the European average.
It should be noted though, that the pay gap varies greatly from one sector to another. Within governmental institutes, for example, the pay gap had been reduced to 8% by 2018. Interestingly, even sectors with tight collective labour agreements and function descriptions, like the healthcare sector, are still dealing with gender pay gaps. This seems to indicate that simply developing a detailed pay scale isn’t enough to tackle the problem.
One of the reasons why the pay gap is getting smaller in the Netherlands is that more and more women are higher educated. In fact, many young women earn more than young men nowadays. Does that mean everything will sort itself out automatically?
An important reason for the gender pay gap is that women generally experience lower mobility within the organization. It’s harder for women to be promoted to higher functions. Perhaps because more women work part-time, often from the moment they start a family.
But even when organizations have specific policies in place to promote women to higher functions, AnalitiQs noticed from some analyses that women in higher functions still earned less than their male colleagues. The overall conclusion seems to be that the gender pay gap in the Netherlands is a complex problem that won’t disappear by itself. Each organization will have to conduct their own analyses and respond to the outcomes with actions and policies.
Equal Pay within your organization?
If your organization wants to make a start with Equal Pay Equal Work, what’s the best way to go about it?
Step 1: Decide on the scope, definitions and background variables for your analysis. How do you define ‘pay’ and ‘equal work’, for example?
Step 2: Collect, relate and process all the required data for your analysis. The data can often be derived from existing HR systems but sometimes, missing data must be collected via a survey.
Step 3: Use the collected data and resulting analysis file to conduct the analysis. The analysis includes statistical methods to correct for background variables like education level, length of service, age, contract type, performance review score, location, etc.
Step 4: Once the analysis has been conducted, it’s time to interpret the results. Does a gender pay gap exist? If so, throughout the entire organization or only in certain segments? What are the underlying causes for this pay gap and how can they be corrected?
Step 5: Create an action plan for closing the gender pay gap based on the interpretation. Communication with the organization is crucial for this step; what are the findings, and how is the organization going to work towards equal pay?Request quote
Equal Pay in pratice
Quite a few organizations have conducted an Equal Pay analysis by now.
Aegon Netherlands for example, was the first organization in the Netherlands to make agreements with the social partners about a study into potential gender pay gaps. The outcomes of their pay gap analysis can be found here.
Later, organizations like ProRail, APG, Tilburg University, ABN Amro, and many others, followed.
Want to know more about this topic? Find out more about Aegon’s case below or watch our Webinar about this current theme.
I began structurally supplying data on Diversity and Inclusion for HR reports together with our HR-Analyst in 2018. Our HR department was looking for an HR analysis partner at that time. When we started exploring the market of HR data analysis experts, we found AnalitiQs. They’re now helping us with our Equal Pay study.Rachelle van Daalen – Pluijmen
Programme Manager Diversity & Inclusion | ProRail
We decided to hire an external agency, AnalitiQs, to conduct the research. They’re specialised in analysing HR data, and they know exactly how to conduct a study like this. And besides, it’s always better to avoid a situation where you’re letting the fox guard the henhouse.Maarten Edixhoven
(Former) CEO Aegon Netherlands & Board member VNO-NCW
AnalitiQs’ Equal Pay Equal Work analysis
Does your organization want to make a start with an Equal Pay analysis, and would you like the support of an expert, independent third party? In that case, AnalitiQs is your ideal partner!
- Supported 20+ organizations within and beyond the Netherlands with Equal Pay analysis so far
- Compliant with laws and regulations
- Outstanding client reviews
- Standard method and competitive rates
- Collaboration with Women Inc; an NGO that specialises in creating equal opportunities in the workplace
- Only service provider that offers an interactive PowerBI Dashboard
Equal Pay Equal Work FAQs
Which data/variables are the minimum requirements to conduct such a study?
In our experience, at least the following variables (or derivatives thereof) are required:
- Salary (plus fixed allowances) on the basis of a full-time contract
- Job level or job weight (possibly derived from function scale)
- Professional field or job family
- Country/location (for analyses across several countries)
In addition, all variables that influence salary, such as work experience and training, can be included in the analysis.
We don’t have all data and/or our data quality is low. What’s the best way to manage this?
There are a number of options, depending on the quality:
- Ask employees for the missing data. For example through questionnaires or by asking employees to complete their personal details in the HR Information System (HRIS).
- Use only part of the population. Is it a representative sample of your total workforce? In that case, you can make statements about all employees in your company. In the event that only the data of a specific sub-group is of sufficient quality, the analysis can be conducted for that specific sub-group.
- Use the variables that are available. Please refer to the previous question to find out more about the minimum requirements.
Is the tool safe?
Yes, data privacy and security are top priority for AnalitiQs.
How do you guarantee the privacy of our employees?
We don’t use any names or contact details. We also convert dates into less traceable variables; date of birth for example, can be replaced by age, and starting date can be replaced by starting month.
Our organization wants to keep all employee data within our own infrastructure at all times. Can AnalitiQs still conduct the analysis in that case?
Yes, that’s possible. Please contact us for more information.
Is it possible to use this method outside the Netherlands?
Yes, the legal guidelines of the United Kingdom, for example, are also adhered to.
What kind of analysis methods are used?
AnalitiQs makes use of a combination of the following methods for the Equal Pay analysis:
- Regression analysis
- Random Forest
- Rake Method
Getting started with Diversity & Inclusion?
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