HR 4.0

‘You cannot close the pay gap with HR data alone’

July 14, 2021 - 3 minutes reading time
Article by Anp Expert Support

Men and women are still paid differently for the same work. Can data provide HR managers with more insight into that pay gap? Marcel de Dood, manager at Centric HR & Payroll Solutions, has his reservations and also says: "Manage for equal opportunities instead of equal outcomes."

The European Commission announced in March that it would introduce fines for companies that pay less wages to women than to men. If the gender gap is greater than 5 percent, fines could follow.

"The question is: can companies provide insight into such data?", asks Centric's business development manager Marcel de Dood. He is studying HR 4.0, the variant of HR that uses digital data and other possibilities offered by the internet. "CBS conducted a study in 2016 and concluded that there are 20 background characteristics that determine what someone earns. These are partly clear characteristics such as age, but for other characteristics such as education level, experience and professional level you can ask yourself whether there is a widely shared definition, let alone a good registration?"

According to De Dood, determining these characteristics also involves the question of whether companies want to register this information from the privacy side. Although HR 4.0 offers the possibilities to collect that information, that does not mean that you as an organization keep as much data about your employees as possible. “According to CBS, the household position and origin of the employee also explain differences in wages; do you want to record that?”

'Together Act'

The HR manager compares it with the Together Act/Wet Samen, which was created in 1994 to ensure that ethnic minorities were better represented in the business world, and which was in effect until 2004. As part of this, employers asked about the cultural background of their employees' parents. "Given the current GDPR legislation and the value placed on privacy, such a request is now completely unthinkable."

"The Wet Samen failed due to privacy and unfeasibility", continues De Dood. "When companies are asked to report more extensively in order to get a better picture of the pay gap, you can end up in a similar situation."

The government thinks: someone has a 36-hour contract, so they actually work 36 hours

‐ Marcel de Dood

Accurate time registration

The business community learned how difficult it is to report accurately on pay with the LIV Act (Low Income Benefit, ed.), which was created with the increase of the minimum wage. Companies that paid the minimum wage, and therefore had more salary costs, were compensated to absorb that increase.

"It became important that you pass on the actual hours worked by an employee", says De Dood. "Because the total wage, including overtime allowance and a bonus, divided by the actual number of hours worked determines the gross hourly wage and thus the right to compensation. Then it turned out that many companies do not register at all how many hours someone actually works. Something was just reported to the tax authorities, because it was not used for anything. It's just one example, but if the government wants to hand out fines for under-wage for women and if there's no good explanation, then every company will have a lot more of these kinds of implementation problems."

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When you look at discussions about discrimination and emancipation, it is ultimately about equal opportunities

‐ Marcel de Dood

Equal opportunities instead of equal outcomes

According to De Dood, an important part of the reward cannot be expressed in money. “We sometimes say that salary is not the most important thing in your work. There are many other conditions. Before Corona, it may have been more common for a woman to negotiate not about salary, but about the possibility to work from home a number of days, or a flexible start time. If you also emphasize matters besides salary, you will get a much more complete picture of equal pay."

His advice is therefore to work less result-oriented: "When you look at discussions about discrimination and emancipation, it is ultimately about equal opportunities. When as a company you aim for equal opportunities instead of equal outcomes, it is up to each individual to seize those opportunities. Then you should think of measures such as looking at backgrounds in application committees, making sure that there are more women on those committees - then you make the opportunities more equal. The current plans are aimed at ensuring equal outcomes: the same pay for equal work. While people, both women and men, above all want equal opportunities."

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