The EU Commission’s pay transparency directive is
a critical step towards workplace equality.
Mercer is fully equipped to advise companies on how to act on the European Commission’s Directive on Pay Transparency and Equal Pay, published on 4 March 2021. Accordingly, we are pleased to see the latest developments with the European Union Parliament endorsing the main provisions of the proposed EU Directive on Equal Pay and Pay Transparency on 5 April 2022. We have been at the forefront of diversity, equity and inclusion work for more than 25 years, helping organisations address the effects and sources of gender disparities in the workplace.
Companies face multiple challenges with the EU directive. Our pay equity and internal labour market analysis approach provides support by helping employers assess the extent to which representation issues exist and identify the root causes.
76% of organisations in the EU say women have equal access to roles that facilitate advancement into leadership positions. However, on average the percentage of women in senior manager and executive roles is 30% and 22%, respectively.
Our research shows that formal pay equity processes drive gender diversity. For the greatest impact, pay analyses should rely on statistical analysis, identify process owners and include formal remediation protocols. Far too few organisations currently have such processes — making this the most significant area of opportunity to enhance workplace equality.
How we help
Mercer offers a suite of consulting services and tools to support gender pay gap reporting and address broader
pay equity needs to drive gender equality, diversity and performance.
Mercer’s approach to pay equity
Mercer performs pay equity analyses for more than 100 multinational companies every year.
Our modelling-based approach allows for isolating the part of the pay gap that is caused by legitimate, business-related factors and the part that is not.
Mercer’s approach is grounded entirely in employers’ business practices to eliminate (or at least minimise) the possibility of introducing potential biases brought in by incomplete or substandard analyses.
Mercer’s approach not only allows for company-wide evaluation, but also permits the assessment of pockets of risk within the company and provides the mechanism to address individual discrepancies in a way that focuses on addressing aggregate goals. Remediation scenarios are tested for impact prior to being rolled out.
Finally, Mercer’s approach provides employers with a platform for communicating the extent of pay inequities, their sources and actions taken to redress them.