Do you have a gender pay gap?
Klar Packages are standardized modules for common reward processes. They are based on best-practice methods, refined time and time again to deliver reliable results at lower cost and implementation time.
Klar offers our Equal Pay review as a stand-alone package or as a component in our Pay Transparency-package. This gives you an accurate, authoritative measure of the gender pay equality in your organization.
In our review we first adjust for all the other factors affecting pay that are not related to gender – such as job level, performance, location, senority, tenure. The resulting difference is called the adjusted pay gap.
We then apply statistical analysis to determine if this pay gap is caused by chance – yes, it could simply be a coincidence. We do this by employing multiple regression models to examine if the difference is a random variance or if it is systemic.
Klar_ Equal Pay Review Basic
For companies with minimum 50 employees in maximum one country
1: What data do we need from you?
- Payroll data: Base salary, working hours, allowances, bonus, pension, company car.
- Other variables: Job level, job title, job function, performance, seniority, tenure, age and gender
2: Job Leveling
- We review your job levels and/or guide you how to determine which jobs have equal value
3: Analysis and statistical modelling
- Summary of the basic features of the population
- Calculation of the unadjusted gender pay gap
- Applying a multiple regression model to determine extent of possible systemic gender bias
4: Final report
- Findings presented and documented in a report
Expanded Equal Pay review
We provide additional assistance should you need it:
- Procuring and structuring the salary data needed for your analysis
- Communicating the findings
- Determining strategies to reduce the pay gap
Some companies need more complex analysis than covered in the basic analysis, such as:
- Companies with fewer than 50 employees
- Companies with many divisions and/or locations in more than one country
The ‘unadjusted’ or ‘raw’ gender pay gap is comparing the average pay of women relative to the average pay of men. It is done by using this formula:
Average Pay of Men – minus – Average Pay of Women – divided by – Average Pay of Men
Systemic inequality can occur even if a company culture has no perceivable gender-based bias. It is often the symptom of something else:
- Imbalances in your Job Architecture
- Lack of check and balance processes
- Lack of governance
If this is the case, chances are that the gender pay gap is just one unfairness among many.
Fixing the pay gap is a process. We have done this quite a few times. This is what works:
- Don’t replace one unfairness with another
- Incremental measures, not radical restructuring
- Use steps that increase fairness and transparency
- Use steps that are aligned with local market