der Standard – 29.09.2021
Fair & Equal Pay – or rather Purpose?
Studies show that the call for fair salary is getting louder and louder. As early as 2019, fair salary ranked at the top in a survey conducted by the job platform Karriere.at among Austrian students.
Last October, State Secretary for Culture, Andrea Mayer launched the fairness process in the cultural sector and trade unions igkultur recommend its Fair Pay salary scheme as a guideline for fair remuneration for cultural work.
Even on the homepage of the Federal Chancellery you will find a page on fair pay for women and men, a project from 2016 and 2017, which also led to the development of an online salary calculator.
At the same time, the demands for equal pay are not only getting louder but have already led to the introduction of the Remuneration Transparency Act in Germany in March 2017.
In 2018, Iceland unceremoniously introduced a law prohibiting to pay women less for equal work. The Equal Pay Act obliges companies to prove that they pay their employees fairly. Those who pay women less will be punished.
In Austria, since March 2011, there is a legal obligation – for job advertisements – to indicate the minimum wage under the collective agreement and to also declare the willingness to overpay.
And, since 2014, companies with at least 150 employees have been obliged to submit an anonymous income report. This report must publish the average income per job level and seniority of all employees in the company. However, identified income differences (the gender pay gap does not even have to be explicitly stated) often remain without consequence.
Theoretically, the efforts sound good and yet the income gap between men and women is at 19,9% for the average gross hourly earnings.
As one of the richest countries in the EU, Austria is shamefully well above the EU-27-wide average of 14.1% and ranks last with Estonia and Latvia.
This automatically raises the question: do we consciously leave things as they are, because they have no relevance at all, and employees want something completely different when it comes to fair & equal pay?
Yes and No: Everyone wants equal pay for comparable work and the pressure on politicians, organizations and companies is increasing massively in this regard.
On September 15, 2021, the press announced that the U.S. Soccer Federation is offering equal pay to men’s and women’s teams, a revolution in an industry where, according to a recent study by Professor Jonas Puck, WU and WU Executive Academy, male soccer players earn 50 to 200 times as much as female soccer players in the same league – the higher the league, the greater the gender pay gap.
In summary: ‘equal pay’ should be implemented, but does it also cover the demand for fairness?
Unfortunately, only in part, because fairness is a highly subjective term: even if two employees receive the same salary for comparable activities, one may feel it is unfair because in her opinion she works much harder for the same money and the other may feel that the remuneration structure of the company is unfair in general, because, for example, the individual classification in the collective agreement scheme and any resulting overpayments seem to be intransparent and incomprehensible.
What relevance does this elusive feeling of fair remuneration have for organizations and companies?
The latest studies by Facebook and McKinsey provide information
In 2021, a Facebook survey clearly shows that its employees want “Career, Community and Cause”, i.e., professional growth, a sense of togetherness and meaning/purpose. And a McKinsey study this year about inclusion confirms the Facebook results and writes that employees want to get “Authenticity, Sense of Belonging, Meaningful Work”, i.e., to be as (diverse) as they are, the feeling of belonging and meaningful work/ purpose.
These studies do not mention salary, but McKinsey explains what employers must provide in return to respect these employee wishes: “Acceptance, Camaraderie, Fairness “, i.e., companies should include and involve employees in all their diversity, create a community / we-thinking / sense of togetherness among their workforce and offer a culture of fairness!
Anyone who believes that fairness, diversity, and inclusion are only orchid or marginal topics will be proved wrong by these studies at the latest. They underpin the trend for meaning/purpose, already recognized in 2018 by a Xing study, they confirm the desire for fair salary & appreciation shown in a Karriere.at study in 2019 and they prove the need for transparency and good cooperation according to a recent Xing survey in 21.
It becomes clear that the sense of fairness is much broader than the mere demand for more salary transparency and equal pay for comparable jobs. “Fair & equal pay” is ultimately about the corporate culture. If you only pay well, you will not be able to keep the right employees in the long run.
Up to this point, you could sit back as an employer and say, if you don’t want to stay, you can go, BUT the tiresome much-quoted War for Talents is just beginning, because the baby boomers are retiring and the numerically weaker cohorts of Generation X, Y (millennials) and Z will only be able to fill the gap to a limited extent.
The tide has turned, and now it’s not anymore, an employers’ market but an employee driven labor market. Of course, some of the jobs can be eliminated, some replaced by gig workers or even by employees who sit anywhere in the world and work from there for the local company. However, if you do not want to offer any random good or service, you need employees who identify with the corporate brand, who bring innovation and who are loyally defending the company secrets, and who serve as ambassadors representing the company to the outside world. All these requirements lead us straight back to the required sense of togetherness, and fairness – only this time it benefits the company itself!
After working as Head of Human Resources at Erste Bank, Martina Ernst founded the salary and career consulting firms www.salarynegotiations.at and www.colourfulcareer.com, is a Career Partner of the WU Executive Academy and serves as President of the WU EA Female Leaders Network with 1500 alumnae