TAMSIN SRIDHARA: Welcome to the fourth video in our series on pay clarity and visibility. In this video, we will be focusing on getting your pay management processes ready for the EU Pay Transparency Directive. I'm Tamsin Sridhara, and I'm delighted to be joined by my colleague, Eva Jesmiatka.
In this video, we're slightly shifting focus. So in the previous three we have focused on the details of the actual provisions of the EU Pay Transparency Directive. In this video, we're going to talk about getting ready. So Eva, what's your point of view on the main pay management areas that employers will need to be focusing on in terms of getting ready for the directive?
EVA JESMIATKA: Yeah. So I think it's important to stress that for employers, this is all about making sure that they are confident, that they are delivering equal pay for work of equal value. And if we start off from that, the things that companies need to make sure that they have in place is, first of all, having gender-neutral and objective job structures and pay structures to make sure that you can understand, what are roles of equal value, but also, do we have the appropriate pay structures around it to make sure that we make pay decisions with pay equity top of mind?
Then building on that is actually the whole process of decision making. So as an organization, it's absolutely crucial to make sure that you have the right processes in place, the right policies in place that allow you to really manage pay in an equitable way.
And then the other thing that's absolutely crucial-- and we've alluded to this already a few times in our video series, and I know that we're going to do a more detailed video on this as well-- is the whole concept of education and communication. So making sure that you get your managers and employees ready, and you start taking them on this journey of greater transparency.
TAMSIN SRIDHARA: Thanks, Eva. So we've talked about structures. We've talked about policies and about education, communication. So maybe let's start with structures. And why is it so important to have robust job leveling and job architecture for the directive?
EVA JESMIATKA: Yeah. So as you will recall from our previous videos, one of the things that companies need to make sure that they do as well on the directive is to have a clear understanding of what defines categories of workers. So which employees are in the same category of work? And having a robust job leveling underpin-- so a methodology that allows you in an objective and in a structured and coherent way define, what is the relative size of a role, and which roles are operating in the same level will be absolutely crucial to not only report on your pay gaps by categories of workers, but also as a key fundamental underpin to any pay decisions that you make.
TAMSIN SRIDHARA: So what you don't want to find is you've got pay gaps, and it's just due to the fact that you have got employees who shouldn't be grouped together because you haven't got a robust job leveling. So you want to get that right.
EVA JESMIATKA: Exactly. Exactly.
TAMSIN SRIDHARA: Thank you. And then a question that's coming up is in terms of pay structures, does this mean companies have to change how they manage pay at the moment?
EVA JESMIATKA: Not necessarily. So I think it is important to state that as an organization, you should make sure that you have a pay structure in place. And what we've already seen happening is that companies started to move away, for example, from having very wide pay ranges. So they realized as well, we need to make sure that we manage pay in a more contained way.
But what is far more important is making sure that you make pay decisions in line with your policies and processes, and that you really use your pay structures as a way that you intended them to be used when you designed them. So it could be almost already as simple as making sure that everybody is paid within the pay range, but more specifically as well having absolute clarity around within this pay range, where is a job and an individual to be paid, given the variety of different objective reasons that might apply to that individual?
TAMSIN SRIDHARA: OK. So what it means-- so we still have-- the advantage of a tight pay structure, it gives some parameters to pay variance. And you can still have variance in pay, but you need to understand that that is due for your objective reasons like skills, like experience or performance or location. It's not unexplained variance.
EVA JESMIATKA: Exactly. And that is absolutely something that's going to be key, making sure that you can look at someone's pay level or at any pay differences and that you have confidence that those differences are for objective reasons and are not due to gender, for example.
TAMSIN SRIDHARA: Thanks. Thanks, Eva. So it seems that there's quite a lot that companies have to get ready. And I'm certainly hearing from my clients that they know they've got to do something, but they're not quite sure where to start. How can we help clients who aren't quite sure where to start?
EVA JESMIATKA: Yeah. So this is indeed a very common theme, and we see that a lot of companies recognize that there is a lot of work to be done. And also in reality, they can feel quite overwhelmed with the amount of work that's coming their way.
And what we have started doing with a number of our clients already is a so-called readiness check. So it could be as simple as starting to look at, where are we now, both in terms of do we have indeed the required structures in place? Or if we have a structure, are they indeed robust enough to allow us to manage pay in a gender-neutral and objective way?
It could be around getting a sense of our pay gaps. What do they look like? And are there any areas that we need to be concerned about? Or it could be around that whole focus around education and communication, and where are we now? And how much is known to our managers and employees around pay? And how big is that gap in terms of where we need to get to ultimately?
So a readiness check can really allow you to understand, where are we now? Where do we need to get to? And what could our short, medium, and long-term next steps look like to make sure that we will be fully prepared when the time comes?
TAMSIN SRIDHARA: So that's helping you sort of build the roadmap. And I think for some clients, they've said that they know that they'll need extra resources that helps build a business case for extra resources. Or what types of resources, what level have we seen from clients to date?
EVA JESMIATKA: Yeah, so it could be a variety of different things, because I think there's also a broad recognition that most companies will be in a slightly different starting position. But what we're seeing is that it can be a variety of actually needing extra resources to get your data in order. So making sure that your data, your systems is up to date and allows you to, in a far more efficient way, run your pay gap analysis, but also the ability to factor in objective reasons for difference.
Another area where we see that requires a lot of resources is typically around that whole education and communication point, because organizations are recognizing as well that that is really going to be a multi-year journey, and we need to do quite a lot of things to get ready. So those are just some initial examples of what we're hearing a lot at the moment where extra resources are required.
TAMSIN SRIDHARA: And we've heard that technology can be a key enabler, and some clients may well be doing some of these analytics, compliance analytics on Excel. Is there a case now for moving to more sophisticated software to help do this?
EVA JESMIATKA: Yeah, absolutely. And I think the benefit nowadays is that this type of software is actually available, whereas if you compare it to a few-- maybe a decade ago, we didn't have that luxury. But absolutely. So software is available that allows companies, A, to quickly conduct some initial checks around pay gaps, but also allowing you to factor in objective reasons for pay differences.
And the other business case for technology is not only the speed for initially doing some checks, but it can also be a real business case, thinking ahead that on an ongoing basis as an employer, you might need to respond to requests from employees of how their pay level compares to their peers. So also having a system available that allows you in a far more agile and ongoing way to do those checks can be a real-- can be a real differentiator.
TAMSIN SRIDHARA: And certainly, that's been our own experience because we work with pay analytic software, and that allows us to do the analytics very quickly and allows us then to focus on the actions. We're not spending all the time doing the analytics.
EVA JESMIATKA: Exactly. And I think you're mentioning a really good point there, because surely in our experience, Tamsin, what we're noticing is that it's now exactly the case that the analytics are actually done very quickly. And then it allows you a lot more time to really think about the implications and how you're going to take the outcomes forward, and what you're going to do and how you're going to make sustainable change happen in the longer term.
TAMSIN SRIDHARA: OK. Thank you. So Eva, just to summarize, we've talked about needing to be ready in terms of having robust, gender-neutral job structures and pay structures. We've talked about having robust pay policies, getting your data analytics and software ready.
And then in our next video-- our next video, we will then be talking specifically about the final area, getting ready, education, and communication. So thank you, Eva. And please join us in our next video.
