Equal pay on the right track

Since the 2020 revision of the Gender Equality Act companies with over 100 employees are required to check for potential pay discrimination in their organization. Initial results have been positive with just one in twenty companies found to have gross gender inequalities.

A man and a woman doing a high five.

According to the Swiss Federal Statistical Office’s 2018 survey, women in Switzerland earn an average of 8%, or CHF 686 per month, less than men. As a result, Parliament has decided to add a new provision to the Gender Equality Act. As of July 1, 2020, companies with over 100 employees must conduct an equal pay analysis, have it audited, and then communicate the results to their employees. To make this possible, the federal government is offering Logib, a free software that all Swiss companies can download and use anonymously. "Logib allows those companies wishing to do so to carry out an evaluation of their situation without fear of punitive measures should they fail to achieve equality within their company", explains Simon Hilber, scientific collaborator in the field of work at the Federal Office for Gender Equality.

Logib consists of two separate modules. One for companies with over 50 employees and a second for small companies with fewer than 50 employees. For the former, the software takes into account the employee's education, experience, seniority, skill level, and responsibilities. This is compared with the data of other employees to provide statistical salary analysis. "For smaller companies, this equal pay analysis is complicated because the number of employees is not large enough to obtain a representative sample," says Simon Hilber. Logib's second module, therefore, calculates a score for each position, based on the level of training, responsibility, and physical strain of the position, among other criteria.

Comp-On, the Aarau-based consulting firm specializing in equal pay, analyzed over 190 companies. It was confirmed conclusively that in less than 5% of the companies, equal pay was not respected within the company. "In 90% of the companies, the calculated difference was to the disadvantage of women; and in 25% of the cases, the results were borderline," the organization states in its Fair-On-Pay 2021 report.

Inequalities are often unintentional

Does inequality differ between large and small companies? The latter are less prone to pay variations," says Rafael Lalive, professor of economics at the University of Lausanne. "People tend to know each other and exchange information about their salaries more readily. Problems are more likely to occur in large companies."  Pay inequalities are often unintentional. They are the result of a lack of structure within a company itself. "This prevents any objective analysis that would give a complete picture of the situation," says Marc Pieren, co-founder of Comp-On. He recommends creating a clear and adequate organization to avoid these differences. "You have to be able to compare functions, monitor revenues, and justify them."

Aside from the structural aspect, there are other ways to achieve greater wage equality in SMEs. One such solution is to promote part-time work, especially among male employees. "We have found that in companies where part-time work is more equally balanced between men and women, the pay gap is smaller," says Marc Pieren.


On the theme

How to facilitate more women's access to management positions

In Switzerland, women hold fewer positions of responsibility than men and often work less hours. " Just 51% of women work on a 100% basis, compared to 82% of men. This restricts their access to management positions," says Marc Pieren, co-founder of Comp-On. There are various ways to reverse this tendency. The first is through recruitment. "During recruitment one can encourage women to apply by specifying that where skills are equal, the job will preferably go to a woman," explains Rafael Lalive, professor of economics at the University of Lausanne. While employers tend to hire more women, there are also opportunities for women to be part of this change. "They tend to minimize their abilities. We need to help them correct this perception bias," says Rafael Lalive. Networking among women is one solution. Women seeking leadership positions should surround themselves with other women who already hold such positions.

Last modification 01.06.2022

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