Why Companies' Attempts to Close the Gender Pay Gap Often Fail

In a recent blog post for the German HR magazine Trend Report, PayAnalytics Co-founder Margrét Bjarnadóttir explained how important it is to recognize the limitation of AI-based HR tools when making important decisions about hiring, compensation, promotions, and training opportunities. Even when workplaces do strive for equity, their data can still reflect historical biases and discriminate on the basis of ethnicity, gender, and class. Hence, to improve pay equity, companies need to find the right tools, identify where there are potential biases, and take the necessary steps to eliminate those biases.

Margret, our co-founder, Dr. Marie Louise Sunde, Founder and CEO of Equality Check, and Tuula Rytila, Corporate Vice President at Microsoft Digital Stores had an inspiring discussion on a panel on gender equity at the Nordic Innovation Summit two weeks ago. The panel was called "The Scandinavian DEI Paradox—Not So Paradoxical?" referring to the fact that while the Nordics consistently score at the top of every equality scale, women are still underrepresented on boards and in top management.

California, the first U.S. state to pass a law on pay data reporting, is considering proposed legislation taking the requirements of the original bill even further. Senate Bill 973 on pay equity was passed in September 2020 and requires large employers to provide data on employees by race, ethnicity, and sex in the ten job categories and pay ranges used by the U.S. Bureau of Labor Statistics. The first data reports were submitted to the Department of Fair Employment and Housing (DFEH) in March 2021.

VÍS, the largest insurance company in Iceland, offers comprehensive insurance solutions in the consumer and corporate sectors. They have close to 200 employees, mainly in Reykjavik and in different field offices around the country.

Pay transparency has been regarded as an essential device to address and close pay gaps resulting from demographics, such as gender and race. New legislation, worldwide, aimed to address the gender pay gap - has in common an emphasis on more transparency in pay and pay decisions.

On December 3, 2021 Italy signed a new equal pay law (Law 162/2021) that seeks to tackle the pay gap between men and women and encourage the participation of women in the labor market. The law introduces some important amendments to the Italian Equal Opportunity Code (Legislative Decree 198/2006), which prohibits all direct and indirect remuneration discrimination for the same job or a job considered as having the same status. The new law, focusing on transparency and rewards, is consistent with the Italian National Recovery and Resilience Plan (PNRR), which contains, among other things, a National Strategy for gender equality for the years 2021-2026.

The idea behind the Pay Equity Act is to create a system that ensures equal pay for work of equal value.  An employer should pay the same for all the different jobs that contribute equal value to its operations.

Margret spoke with Al Adamsen, the host of People Data for Good, in a recent episode about Pay Equity, Algorithms, Neutrality of Data and AI.

Harvard Business Review just published this article, which is written by two of PayAnalytics' founders, Professors Margrét Bjarnadóttir and David Anderson, along with Professor David Gaddis Ross. It discusses how automation is changing HR and what we need to be aware of when applying Automation and AI in People Analytics.

The PayAnalytics platform is designed to support your pay equity journey every step of the way. In the last few months, we have added several new features that advance this goal.

Margrét Bjarnadóttir, Associate Professor of Management Science and Statistics and one of the founders of PayAnalytics, maps three major trends in legislation changes concerning pay equity, discussing the challenges of position and pay comparisons, implementing best practices, and increasing salary transparency. She proposes several forward-thinking options for companies, including integrating pay equity into corporate strategies to prepare for changing legislation.

In this article we offer answers to the most frequently asked questions on Spain's new Equal Pay legislation.

Discussions on fair pay practices, new research on gender and pay, and challenges in building fair compensation for startups.

Level the Paying Field is a Canadian podcast where issues related to economics, equity, women, work and money are discussed. Margret Bjarnadottir from PayAnalytics was a guest on their latest episode, entitled International Perspectives.

Margrét and Henrike recently spoke with Included founder Stephen Frost during one of their Friday morning Coffee Talks.

On Friday September 17th 2021 (from 11:00 to 12:30 Paris Time), the Government of Iceland and OECD will be hosting an online-event where Margrét Vilborg, one of PayAnalytics' founders, will be speaking. After registering (click here to register), you will receive a confirmation email containing information about joining the meeting.

In this talk presented at Advania's Fall Conference 2021 Dr. Margrét Vilborg Bjarnadóttir sheds light on the steps needed to ensure the fair application of AI in HR and discusses the application of data-informed decision support in the pay equity space.

We are proud to have been added as the 47th member of EPIC (Equal Pay International Coalition) where we join members ranging from governments and international organizations to private sector initiatives.

The unjustified pay gap between men and women is still present, and it seems that it will not go away without some focused efforts. Although countless studies and reports show that the gap is there, many still do not believe it impacts their own organisation. The EU Commission is increasingly communicating that the issue must be addressed. Some countries have begun the journey and have insights to share. Data analysis to determine the gap and structured implementation of measures to close the gap is increasingly used.

Dr Margrét Vilborg Bjarnadóttir will participate in this important event on the 29 June.

Margrét Bjarnadóttir, prof. at the University of Maryland and founder of PayAnalytics, and Henrike Von Platen, founder and CEO of the FPI Fair Pay Innovation Lab in Berlin, have been having their coffee together on Fridays since early 2020.

California Pay Data Reporting (SB 973) requires large employers to report pay and specific other data to the DFEH (Department of Fair Employment and Housing) by March 31, 2021, and annually after that.

Two years ago, PayAnalytics won the Wharton People Analytics Startup competition. This year, our founders are back, with our scientific collaborator Dr. David Ross as the winners of the White Paper competition.

PayAnalytics welcomes Víðir Ragnarsson as Head of Consulting.

Icelandic maker of biosimilar-medicines and PayAnalytics user, Alvotech, has received an Equal Pay Certification in Iceland. Following the Icelandic certification they will set the focus on fulfilling the same standards as set by the Icelandic legislation for their global operations. PayAnalytics congratulates Alvotech on the success.

On the 17th of March, companies will be awarded based on the Universal Fair Pay Check. This international certification measures equal pay performance in a coordinated way between companies in different countries.

Dr. Margret Bjarnadottir was featured as Equal Pay Game Changer in this year's Equal Pay Day campaign in Germany.

En la conferencia se analiza la nueva situación laboral que la publicación del Real Decreto 901/2020 y 902/2020 del 13 de octubre dejará en las empresas españolas. Así mismo, se examinan los problemas que derivan de estas normativas y la manera en la que PayAnalytics los aborda y proporciona soluciones rápidas, eficaces y sencillas.

Companies in Spain are now obligated to take action to ensure equal pay for work of equal value. DireACTIVAS, one of our partners in Spain, wrote an article (in Spanish) on the new legislation and the potential impact it will have on equality in Spain. We are happy to assist Spanish companies in fulfilling the requirements of the new legislation - and our solution is of course also in Spanish!

Come and join us virtually for a conversation about equal pay: the fast changing legislation around the world, the role of analysis and data driven decision support, the equal pay journey and key levers to drive change - all packed into 90 minutes.

Margrét Bjarnadóttir from PayAnalytics will participate in a Reykjavik Global Forum 2020 digital session on Wednesday 11th November 09:30 UTC.

The name of the event is A Fair Diagnosis: It’s time to close the wage gap - FPI Lab and you can register using the registration link below.

The Berlin based Fair Pay Innovation Lab (FPI) is piloting the Universal Fair Pay Check, a standardized international method of ensuring fair pay. FPI has chosen PayAnalytics as its partner for the Universal Fair Pay Check.

Nordic Women in Tech Awards has nominated one of our founders, Margrét Bjarnadóttir, in the category Entrepreneur of the year. We are super proud of Margrét and thankful for the nomination!

At the People Analytics & Future of Work conference in San Francisco last February Vidir Ragnarsson from Reykjavik Energy gave an insightful talk on how Reykjavik Energy tackled the task of measuring and closing their Gender Pay Gap within a few years.

In a recent blog post for PRCA PayAnalytics Co-founder and Chairman Margrét Bjarnadóttir explains in a nutshell how data and analytics are essential to the process of closing pay gaps – and keeping them closed. She explains, among other things, the two types of pay gaps most commonly mentioned in the press and the difference between the two. The blogpost also embeds a video where Margrét amongst others discusses the role of ethics and fairness when closing pay gaps. The discussion was a part of the PRCA Ethics month.

The World Economic Forum estimates that it will take over 200 years to close the gender pay gap. No one should have the patience to wait that long. How can we accelerate change? The answer may lay in data and models with a good dose of transparency.

The journey starts with gathering the data and understanding the pay structure. Then companies move on to identifying areas for improvement and eliminating unexplained demographic pay gaps through corrective action—in other words, ensuring equal pay for equal work.

The New Business Venture Fund has invested $525,000 in the software company PayAnalytics.

PayAnalytics has developed an equal pay cloud solution, and has grown rapidly in recent years. Its solution is already helping over 50 companies and organizations in Iceland close the gender pay gap, employing a total of 30,000 staff, or about 14% of the Icelandic labor market.

It is amazing to see one of our partners, the insurance company Sjóvá, perform so well. A company with 60% women on the board of directors and a female chair.

GEMMAQ rates companies in global markets based on how gender balanced their leadership is and is building a corporate gender equality and diversity rating and indexing system.

In a recent article, World-at-work set the spotlight on Reykjavík Energy and their pay equity work. Pay equity has been top-of-mind for Reykjavik Energy for quite some time, even before the topic was regularly making headlines.

The National University Hospital of Iceland has signed a contract to use PayAnalytics for their equal pay analyses.

Dr. Margret Bjarnadottir (@mvilborg2) from @payanalytics recently wrote a guest feature for @insideBigData about addressing demographic #PayGaps with Data-driven Solutions.

Demographic pay gaps, including the gender pay gap, are the result of more complex factors than just a desire to minimize payroll expenses. They stem from unconscious biases and processes that are better suited to one group compared to another. And, as multiple executives have found out, good intentions and “mindfulness” are not enough to eliminate the gaps.

Copenhagen Business School @CBScph recently published a "How I did it" story on @PayAnalytics. Read the full story on the CBS website.

"Our goal was to build an easy-to-use application that puts analytics in the hands of HR managers. We have created a web platform that enables users to walk through the process of statistically measuring their pay gaps."

Vidir discusses the ways to close the gender pay gap at Reykjavik Energy, using PayAnalytics software with journalists at Wirtschaftswoche.

Jon Henley, Guardian's Europe correspondent takes a look at how the Icelandic legislation has changed to combat the gender pay gap. One of the people cited in the article is the CEO of Reykjavik Energy. Reykjavik Energy has used PayAnalytics' software in their efforts to close the pay gap. We are proud to be part of their gender lens.