Fair Pay Management Circle on 19 March 2019 at EY in Berlin
Even companies led by the very best intentions often make little progress in terms of fair pay, but it doesn't take much more than a clear plan to get there! At our Fair Pay Management Circle at EY in Berlin, the topic of discussion was the best practical strategies.
“A goal without a plan is just a wish.” This was the overarching theme of the Fair Pay Management Circle hosted by the auditing firm Ernst & Young on 19 March 2019. High above the rooftops of Berlin, with a view of the Bundestag dome, participants discussed the most frequent sources of error, the pitfalls of the female pipeline, and the typical snags along the path to pay equity.
The topic of salaries has long since been on the host's corporate agenda. EY itself has been setting a good example for many years; since 2010, regular gender audits have been carried out and all data and activities regularly reviewed. And with very good results! The internal gender pay gap is at only 2 percent.
Transparency from scratch
However, the problem of unequal pay cannot be solved once and for all, claims Sibylle Landwehrmann, who introduced the pay strategy employed by Total Rewards & HR Service at EY to participants from the spheres of business, academia, and politics: “Fair pay is an ongoing process.” According to the remuneration expert, the gender pay gap, whether at the entry level or the top, must be reviewed and corrected time and again. “Later pay imbalances arise because women’s performances are overlooked or underestimated somewhere on the career ladder. Therefore, pay transparency is needed right from the very start.”
Transparency is needed not only for salaries, salary components, and performance criteria, but also for the analysis of salaries and processes themselves. Even after years of effort, many companies continue to be surprised by their figures. They gain valuable insight that can inform further decisions regarding remuneration practice: pay imbalances arises especially in cases of variable salary components, or when assessments come into play.
“Humans are the biggest source of error,” claims Bärbel Ostertag, head of Global Total Rewards, HR at SAP, where the 22,000 employees have been offered transparency at the touch of a button for some time now. After all, it’s called unconscious bias for a reason. Ostertag also makes the plea for more transparency: “Getting rid of unconscious bias will be a Sisyphean task if we don’t create transparency at all levels.”
However, not all companies that proactively address the issue of transparency see employees making use of the offer. “We proactively called on all employees to exercise their right to information, but received only two inquiries, both from men,” reports Andrea Galle from the Berliner BKK VBU, for example. “The Transparency of Remuneration Act is nevertheless important,” says the head of the health insurance company, “because it sets an example. We learned in a previous Circle where fair pay goes awry – in the collective bargaining agreement – and are taking steps to remedy it.”
Only fair leadership is smart management
The path towards this goal is marked by the understanding that fair pay is a process, ensuring transparency at all levels, and not allowing oneself to become blinded by supposedly objective people and collective bargaining agreements. And it's worth it, as is once again made clear: “Our aim is to disrupt traditional role models in companies so that we don't lose any talented women on the career path. We must promote all talent on an equal footing,” Dr. Jens Massmann explains. The Performance & Reward expert is a Managing Partner at EY and knows very well that only fair leadership is smart management: “Not promoting women is simply too expensive.”
As at every Fair Pay Management Circle participation was exclusively by personal invitation; the event itself was subject to Chatham House Rules – the best prerequisite for an open and constructive dialogue. We therefore relay nothing that would allow it to be traced back to the people involved or guests, or to their companies or organizations – unless they have explicitly agreed to be identified.
FPI - What we do
Why does the gender pay gap prove so intractable? What is standing in the way of fair pay for all? What do companies need to do in order to put sustainable pay strategies into practice?
Knowing about the pay gap and being willing to rid the world of the unjust state of affairs are evidently not enough to actually ensure fair pay. It is right here ...