In today's world, where equality is a key topic, EU regulation on pay transparency is becoming more and more important. These new rules not only seek to reduce the pay gap between men and women, but also empower employees to better understand their right to fair pay. As organizations face the challenges of implementing this regulation, the door is opening for changes that can shape the future of the workplace.
In anticipation of the 13th edition of the HR Days conference, which will be held from 6. until May 8 in Rovinj, we bring you a short interview on a hot topic with one of the lecturers, the esteemed Anita Lettink.
Anita has spent more than 20 years of her career in global consulting, corporate and executive leadership roles and is recognized as one of the top 25 global experts on the future of work and HR. Anita is also a partner in the Strategic Management Center and the founder of HRTechRadar, and at the next HR Days conference she will give a lecture on the subject of EU regulation on pay transparency entitled: "From Directive to Practice: Mastering Pay Transparency in Your Organization".
What can HR experts hear from you at your lecture at the 13th HR Days conference?
In my presentation, I will present the EU Directive on Pay Transparency in detail, revealing its key aspects and impact on organizations and workers. I will explain what this regulation actually means in practice and how it can transform the working environment. In addition, I will share inspiring examples and valuable lessons from the experiences of companies that have already successfully implemented salary transparency. I believe that we will have enough time for additional questions from the audience, which I will gladly answer and share my opinion, experience and advice.
What obstacles will HR leaders face when implementing the EU Directive?
The three biggest challenges are: lack of support from executive management, lack of understanding and budget. When the executive team does not recognize the importance of this issue, it is difficult to secure the necessary resources and establish a culture of openness. Without a clear understanding of the benefits, such as increased trust, employee satisfaction and reduced pay gaps, it is difficult to motivate all stakeholders to change. Also, implementing pay transparency may require investments in technology and processes. When the budget is not adjusted to these needs, HR teams face limited opportunities to successfully implement these initiatives. Overcoming these seemingly insurmountable obstacles for some companies is crucial to creating a sustainable and fair payment system within the organization.
In your opinion, how much will the new Directive affect job interviews, especially when it comes to salary negotiations? Also, will there be "conflict" between colleagues?
The new EU Directive will facilitate job interviews mainly for managers and recruiters, who will have a ready-made job structure and salary framework that they can share with candidates. Since the compensation level is assigned to the candidate based on objective characteristics, there will not be much room for personal negotiation. This will reduce the internal conflict that exists today, and market movements will have less impact on an individual's salary. In the future, new employees will be positioned comparable to their future colleagues.
What can we learn from companies that have already implemented a transparent salary system?
Particular attention should be paid to the data. Where are they stored? Are they clean and reflect the latest state? Are they easily accessible? When you start reporting, you'll discover differences that you'll need to explain. You may find that some pay differences are justified, while others may not. You need to educate yourself and gain experience to confidently interpret data.
Second, closing the pay gap can be expensive. If you wait until the last minute, you may not be able to provide the necessary budget to eliminate unfair differences. For example, if your first report shows a difference in salaries of more than 5% in the same or similar positions, it is possible that you will have to invest additional resources to even out these differences. For this reason, it is necessary to start research as soon as possible in order to plan the budget for the necessary salary adjustments.
Based on your experience, how can HR leaders overcome the challenges associated with salary transparency initiatives?
As with any other initiative, be well informed first. Once you have a basic idea of the approach and the project, reach out to the executive team to familiarize them with all the details. Pay transparency starts at the top – if the executive team isn't on board, you'll have a hard time implementing this initiative.
Furthermore, communication and education are really key elements. Compensation is a sensitive topic that affects many aspects of an employee's life, so it is important that every message is clear and carefully thought out. This means that HR and team leaders need to work together and speak the same language before they start talking to employees. This step not only builds trust, but also ensures that everyone feels included and valued.
Ensuring sufficient time for this process is not only practical, but also necessary for building a positive work environment. Investing in transparent communication brings long-term benefits, because employees who feel informed and supported become more motivated and engaged team members.
