Ülle Matt: How to close the gender wage gap in companies?

Ülle Matt
Ülle Matt Source: Private collection

The gender wage gap cannot be abolished overnight and it takes time to create a sustainable pay framework, Ülle Matt writes.

Estonia's considerable gender wage gap stands out in Europe. The reasons for the problem as well as how to close the wage gap were discussed at a recent Tallinn University (TLÜ) roundtable meeting where the results of the university's "Reducing the gender wage gap" study were also discussed.

Having worked toward closing the wage gap for many years, I find it important to share observations on how companies could help reduce the gender wage gap.

Wage gap as a structural problem

Tallinn University research fellow Pille Ubakivi-Hadachi said that it is difficult to determine what causes such a deep gender wage gap in Estonian society even if one has access to thorough statistics. The TLÜ study reveals that the wage gap is largely a structural problem and efforts to solve it on the level of individuals are not sustainable.

While it is most welcome when people are urged to ask for a bigger salary, a complex problem requires a more serious look. As put by Secretary General of the Ministry of Social Affairs Marika Priske: we are faced with a paradox where we know there is a serious problem in society, while we refuse to admit it could reside where we work.

How to reduce the gap in one's organization?

The study revealed that organizations usually lack the will and a set framework for managing the wage gap.

I know that rooting out the wage gap is a long but necessary process. The roundtable discussion showed – and I can confirm this based on personal experience – that quotas or a strong reporting obligation must not always be the first measures where acknowledging the gap and altering mentality on the level of companies and executives suffices.

Change happens once mentality changes. The latter is necessary for companies to get a more specific framework and HR processes with which to close the wage gap; these processes should be persistent and sustainable as opposed to ticking a box.

To make sure changes are not merely superficial, the employer's mode of thinking must change in a way to make sure the problem does not resurface when hiring new people or changing the level of salaries. The change should be organized purposefully and address far more than just individual salaries. In the end, wage equality should come about organically in companies and society in general.

However, this requires concrete steps to be taken first. Pille Ubakivi-Hadachi said that an analysis of wages and a fixed salary structure are needed. The latter needs to be presented to employees so they can develop a clear idea of how their salary is shaped.

The time it takes to close the wage gap on the organization and social levels must not be underestimated. The gender wage gap cannot be closed overnight and it takes time to create a sustainable salary framework.

Results might not manifest for a few years because even if a company learns it has a gender wage gap and lays down a plan, it might not be possible to close it right away. It could take time to even admit that a gender wage gap has developed – even in cases where it has been created consciously.

Public debate serves equal pay

I feel that major change has taken place in the management culture of Estonian organizations in the last six years – there is an increasing will and pressure to work toward closing the wage gap, creating equal opportunities irrespective of the person's gender.

Public debate on equal pay has definitely had a hand in that. Everyone has a role to play when it comes to closing the gender pay gap – fair pay requires cooperation from the employer, employee, unions and the state.


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Editor: Marcus Turovski

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