Equal pay for equal work. All employers are required to conduct an annual pay survey (here used interchangeably with the term salary mapping) to ensure fairness and equal salaries. But what does the regulation say, and how is it conducted? Here are your answers!
Salary mapping involves examining if there are pay differences between men and women performing equal or equally valued work – and if these differences are linked to gender. According to the Swedish Discrimination Act, this must be done once a year and is mandatory for all companies, regardless of the number of employees. Perhaps you've also heard about the Pay Transparency Directive, the new EU rules on equal and transparent salaries becoming Swedish law in a couple of years? This will pose even stricter requirements on you as an employer to ensure the salary mapping is actually carried out – if you haven't yet established a functioning routine, now is a good time to start.
Is complying with legal requirements the only valid reason to conduct a pay survey? Far from it!
Firstly, it's one of the most effective tools your company has for equality work and a vital step in being an attractive employer for both current and prospective employees.
Secondly, it helps you get a better grip on the entire salary structure of your company – not just in terms of potential imbalances related to gender. The best part? You gain a wealth of useful knowledge that can be used to make informed decisions in your salary reviews and individual pay setting, improving your recruitment process.
However beneficial pay surveys are – with all their elements and detailed requirements to keep track of, many find them to be a substantial challenge, especially if it’s their first time. S, if you’re struggling (a little or a lot) to fit all pieces of the pay survey puzzle together, you're not alone.
To assist you, we've compiled eight common questions and answers about conducting a pay survey.
1. Should parental leave and sick leave be included in the pay survey?
Yes, the pay survey should cover everyone in the company, with the exception of the CEO. It should also include those on parental leave, sick leave, and leaves of absence, and applies to both permanent and fixed-term contracts.
2. Does the pay survey need to be performed at a certain time of the year?
No, the regulations do not specify a particular time of year for conducting a pay survey. However, it is common for companies to begin the process well before the annual salary review, as the mapping often yields valuable information for adjusting salaries, making it useful for the salary review process.
3. What should be mapped in the survey?
As an employer, you first review the different positions within the workplace and assess which are equal or equivalent (more on this process below). Then, you identify groups dominated by women (60 percent or more) and compare them first with groups performing equivalent work and then with groups where the job requirements are lower but the salary levels are higher. Based on this mapping, you then identify any potential pay differences and investigate their causes.
For more on the various stages of the salary mapping, see our checklist.
4. Should we also review our policies?
Absolutely! The Discrimination Act requires employers to map and analyze "provisions and practices regarding pay and other terms of employment". This means reviewing salary agreements, criteria for salary setting, pensions, benefits, and bonus policies. Are these provisions and practices gender-neutral and applied equally to men and women in the company, or is adjustment needed?
A thorough job this year will pay off next year. A well-conducted grouping and job evaluation can be largely reused in the next pay survey (good to know, right?)
5. How do we map pay differences for equal work?
To map pay differences for equal work, you first need to divide employees into groups based on equal work, meaning everyone has the same or almost the same duties. Remember to place all employees with equal work in the same group, regardless of department or collective agreement. Practically, this can be done in many ways, but many companies use statistical codes or a list/register of all positions in the company.
6. How do we map pay differences for equally valued work?
To determine which jobs can be considered equally valued and then analyze potential pay differences, you should conduct a job evaluation. Unlike equal work (meaning the same or almost the same duties), equally valued work refers to jobs that place similar demands on the employees performing them. In the job evaluation, you'll consider the following four criteria:
- Skills and competencies
- Responsibility
- Effort
- Working conditions
Here, you go through each job and score these demands. What does this job require in terms of interaction and teamwork? Does it require specific training? Is it physically or mentally strenuous? The higher the total score a job receives, the higher its salary should be. Keep in mind that the job evaluation should not consider individual employees' skills or performances – it's solely about the requirements of performing the job.
Here you can read more about how a job evaluation is conducted.
7. Are there any pitfalls we should be aware of?
Grouping and job evaluation are often the trickiest parts of salary mapping. It's crucial to be methodical and precise in these stages, as mistakes here can lead towards significant issues when it is time to analyze the salaries.
A common pitfall is making the categories too broad, merging jobs that actually differ significantly, missing important nuances in duties, requirements, and responsibilities. In other words, too broad categorizations early on risk leading to inaccurate comparisons and analyses down the line – possibly overlooking unjust pay differences. Therefore, it's wise to consult multiple resources with proper knowledge of different roles and jobs, work in teams, and carefully discuss how grouping should be done and why.
You should also keep in mind that a thorough job this year will pay off next year. A well-conducted grouping and job evaluation can be largely reused in the next pay survey (good to know, right?).
8. How do we differentiate between justified and unjustified pay differences?
Identifying which pay differences are unjustified, meaning lacking a rational explanation, is a central part of the survey – but how do you know? Here, the company's salary criteria are crucial for determining what should affect pay, typically factors like experience, education, and performance. A more experienced employee earning more than a newly hired colleague, or an employee consistently performing better than others having a higher salary, are examples of justified pay differences. It's also common for employees to retain a historical salary if they switch from, for example, a management position to another role – typically considered a justified pay difference as well.
A question that often arises is whether market conditions can be used as a justified argument. Short answer: yes, with some reservations. It's common for companies to cite differences in supply and demand in the labor market as a reason for two (otherwise equivalent) jobs having different salaries. However, merely referring to market conditions is not enough; this requires backing up with a more detailed analysis.
Reading tip: Dive deeper into the intricacies of pay surveys with this e-learning course from the Equality Ombudsman (in Swedish).Glöm Excel-arken – underlätta lönekartläggningen med Flex HRM
Forget the Spreadsheets – Simplify Salary Mapping with Flex HRM
Does the salary mapping feel cumbersome and time-consuming? Do you wish there was a smarter way? Our web-based HR system, Flex HRM, is designed to make the process as smooth as possible, with all data in one place and an educational workflow for all steps of mapping – from job evaluation to action plan. Contact us for more information!
P.S. If you're interested in learning more about the Pay Transparency Directive, its implications for conducting pay surveys, and how the right tools can streamline the process, we have a webinar for you! Read more and sign up here. (Please note that the webinar is broadcast in Swedish.)
