Why Conduct a Pay Equity Analysis?
According to the Discrimination Act, employers are required to conduct a pay equity analysis every year. This involves examining wage disparities between individuals with equal or equally valued job responsibilities. At which time during the year the equity analysis is performed doesn’t matter. The purpose of the pay equity analysis is to discover, remedy, and prevent gender differences in pay. The analysis must be presented to the Equality Ombudsman (Diskrimineringsombudsmannen) upon request.
Systematically working with the pay equity analysis is crucial for achieving gender equality in the workplace. With a clear understanding of the wage balance between female and male employees, employers can rectify any unjust wage differences and prevent them from occurring in the first place. In addition, pay equity analysis can bring several other benefits to the organization: – Improved foundation for pay reviews and individual compensation – Better insight into the organization's pay structure – A more gender-equal workplace and a stronger employer brand
Some Good-to-know Key Concepts:
Equal work (or substantially similar work): Employees performing the same or very similar job tasks.
Equally valued work: Jobs that impose similar demands on employees performing them.
Unjustifiable pay differences: Pay differences must be justifiable based on factors such as job responsibilities, employee competence, or the difficulty of job tasks. If there is no factor explaining a pay difference, except for gender, it is considered an unjust pay difference.
Checklist – Here Are the Steps in a Pay Equity Analysis:
For an optimal process, you should follow a clearly defined structure. It pays off to be thorough, especially the first time, as it will give you a head start the next time.
Here’s a checklist for all the parts of the pay equity analysis:
- Assemble a workgroup
Conduct the pay equity analysis in collaboration between employers and employees (directly or through any relevant union). Form a workgroup and create a plan for the analysis process. - Compile pay regulations and practices
Gather all workplace agreements, routines, and criteria that determine employee pay and benefits. - Map and analyze pay differences in equal work
Group employees based on their job tasks. Map and analyze any pay differences between men and women performing equal work (the same or very similar job tasks). - Map and analyze differences in equally valued work
The next step is to investigate if there are any pay differences between female-dominated jobs and other equal jobs, also known as job evaluation (in Swedish arbetsvärdering).
The evaluation should be based on knowledge and skills, responsibility, effort, and working conditions. The evaluation should, therefore, be entirely based on the job requirements; employees' individual skills and accomplishments are not factors to be considered.
The job evaluation should involve a thorough mapping and analysis of:
• Female-dominated jobs (jobs performed by women to 60 percent or more)
• Equally valued work
• Female-dominated jobs where the requirements are deemed higher, but the salary is still lower.
These jobs are then compared with non-female-dominated jobs where the requirements are lower, but the salaries are higher. If there is no reasonable explanation for why the female-dominated job, despite having higher requirements, still has a lower salary level, you, as the employer, must address this.
Read more: Job Evaluation – How Does It Work? - Documentation/action plan
Employers with ten or more employees must also document their pay equity analysis. The documentation should include the results of the analysis and the actions and pay adjustments determined. You should also document how your collaboration occurred and report on the results from the actions planned in the previous year's analysis.
The Equality Ombudsman (DO) offers e-training (in Swedish) on the components of the pay equity analysis with general information on how to proceed.
Let Smart Tools Help You in the Process!
Does the annual pay equity analysis feel cumbersome and complicated? No worries. We've simplified the process for you with a tool that helps you pursue gender-equal pay. The personnel system Flex HRM now includes the much-anticipated pay equity analysis function – a system support that guides you through every step of the analysis process.
The function is offered as a standalone module for Flex HRM, meaning you can add it to your current set of our system solution. Even if you're not currently using Flex HRM, you can use the pay equity analysis as a separate module. With Flex HRM, you are guided through every step of the pay equity analysis – from job evaluation to action plan. The work becomes more accessible, and you can rest assured that everything is done in accordance with the law. With pay equity analysis as an integrated part of Flex HRM, you can avoid wasting time working in different systems and focus more on the analysis. Let the tool keep track of everything for you: When it's time for a new analysis, with just a click, you can instantly access all the information you need – all employees, their pay – and the correct figures.
Any questions or concerns? Reach out to us, and we'll be happy to provide more information!
