An employer is obligated under the Equality Act to promote equality in the terms of employment, especially in salary. However, the pay gap between men and women remains one of the central problems related to equality in Finland.
Equal pay does not mean levelling all salaries. There are pay differentials, and there should be, but they must be based on the difficulty of the job and the employee’s skills and performance – not on personal qualities. Gender is not an excuse for a pay gap.
The most significant reason for the pay inequality between genders is segregation – the strong division of professions into women’s and men’s professions. Division is a very complex phenomenon, and solutions need to be found.
In addition to the division of professions, there is a problem of an unjustified pay gap, or in other words, a pay gap resulting from gender.
What is an unjustified pay gap?
An unjustified pay gap refers to the gap in men’s and women’s salaries when comparing men and women doing similar jobs with similar qualities.
Pay gap survey
Business school graduates’ salaries are examined yearly. Every four years, an analysis is conducted to find out the pay gap between female and male business school graduates.
In full, the pay gap between female and male business school graduates in the private sector is 22 per cent. This so-called raw pay gap is explained by the difficulty of the work and the position, weekly working hours, years of absence and experience, field, and workplace location.
Men occupy leadership position more frequently than women, work longer hours and accrue more years at work, are placed in well-paid fields such as finance, usually receive performance-based pay which raises their salary level, and work in the metropolitan area, where the salary level is higher, more frequently than women.
When the explained factors are excluded from the raw pay gap, the unjustified pay gap between female and male business school graduates can be found. It is about 9 per cent in the private sector. This gap has not narrowed much since the 1990s.
In jobs in the public sector, the pay gap is clearly smaller and has narrowed over the years. In the public sector, equal pay has increased through salary systems and pay transparency.
Report on the latest pay gap analysis
How equal pay can be promoted
Differences in pay cannot be solved without information on salaries. This information can be found through a salary system, for example. A transparent and fair salary system is an effective way to prevent the creation of a pay gap as early as the recruitment phase. When employees know what their salary is based on and how its development can be influenced, satisfaction with pay also usually increases.
At its best, a salary system is an excellent tool for effective and productive leadership.
A salary system must be maintained in such a way that it is up to date and recognises the changing tasks
and responsibilities of working life. When a salary system is working properly, it is easier to take the next step towards pay transparency.
Family leave and family responsibility:
A more even distribution of family leave and responsibility between parents has a large impact on equal pay. When family responsibility is more evenly distributed, both parents have the opportunity to focus on their career, but also to take part in the everyday life of the family.
Mothers still account for the majority of family leave, resulting in responsibility for the family often being more weighted towards mothers.
A family leave system should guide families more strongly to divide their leave more evenly between both parents. The new family leave system stepping into effect in August 2022 will not do this, even though it will increase the amount of leave for fathers. Additional leave mostly benefits those families where leave would be divided in any case. As such, the system still needs to be developed further.
Talking about pay:
It is good to discuss your salary with your employer regularly. It is good to discuss your salary with your employer regularly. Read about tips for discussing salaries here.
In addition, it is also a good idea to talk openly about salaries with others, such as your colleagues and friends. This increases knowledge about pay.
What is a pay survey?
The Equality Act requires employers to prepare an equality plan if the workplace has at least 30 employees. A pay survey is a statutory part of the equality plan.
A pay survey must cover all personnel groups, including temporary and part-time employees.The survey takes into account the classifications of jobs, meaning either the system for evaluating the difficulty of a job used by the employer or other grouping of tasks used at the workplace.The aim of this to gain an understanding of the level of difficulty of women’s and men’s work.
A pay survey reviews and evaluates both the salary systems in use and the realised salaries.The survey shows how men and women are placed in different positions and maps out women’s and men’s job classifications, salaries and pay gaps.
A pay survey must be divided into small enough sections, such as by groups of jobs, so that conclusions can be drawn from the results. The survey must be comparable to previous plans.
The aim is to ensure that there are no unjustified pay gaps between genders at the workplace and that salaries meet the requirements of the Equality Act.
The survey also goes through the recruitment processes and their equality:
- Are both men and women encouraged to apply for open positions?
- Are such job titles and channels used that both genders will apply for the open positions?
- How can it be ensured during recruitment that no unjustified pay gaps are created at this phase?