These days, and especially starting today, the largest employers in the economy are supposed to face a bomb in their relationship with the workers. Today, a law came into force that requires many companies to publish the report on the wage gap between men and women in society. The data should have provoked unrest in at least some of the companies, since according to OECD data, the gap in Israel is close to 23%.
This week, Calcalist also published a project that deals with the wage gap among senior executives in public companies, and also shows that there are significant wage gaps. Thus, for example, the average gap between men and women at the top of the wage earners of the companies in the Tel Aviv-125 index reached 49% (!).
But the buds of the reports published so far, by companies such as Check Point, Partner and Shikun VeBinui, indicate completely different trends: wage gaps are negligible to non-existent, and in many cases the gaps are even in favor of women. For example, at Check Point The maximum gap between men and women is 8%, and of the 35 groups in which the company divided its employees, 18 in all women earn more. The groups that the company divided into its employees.
It is estimated that many more companies will post positive data regarding pay gaps. That is, it appears that the bomb was detonated in most places. Does this mean that there are indeed no gaps between men and women? Or did employers simply invest a lot of resources and manage to soften the data, with the help of Excel wonders, assistance from consultants – who are undoubtedly the biggest beneficiaries of this law – and the wording of the flexible law?
Brief reminder: As mentioned, a law came into force today that requires companies of over 518 employees to publish a report on the wage gap between men and women. The number 518 was chosen under the creative reasoning of 100 times hamsa and more. In addition, all companies traded on the stock exchange are obliged to publish the report, as well as all the associations.
In addition to the public report that each company is required to publish, it must also send a personal report to the employee, stating which group he belongs to, what the pay gap is between men and women, and the explosive figure – what percentage of employees earn below the company average salary. By the way, this is a figure no less sensitive than the wage gap between men and women, but it will also be difficult to draw conclusions from it, since it relates to the group’s general rate, and not to the employee’s personal situation compared to the average wage in the company.
The purpose of the law is of course positive and important: it is not possible to force employers to act to reduce the wage gap between men and women, but the rationale is that if these gaps are exposed, awareness will rise among workers and employers, and an evolutionary process of reducing gaps will begin.
A similar process took place more than 20 years ago, when public companies were required to publish the salaries of their senior executives. This move led in the first years to the exact opposite result – of a race between the companies who will reward its managers more. However, there is no doubt that publishing data causes a certain shock and evolution, even if not always in the desired direction.
So why, in fact, would the bomb probably not explode? The main reason for this is the flexibility that the law allows companies to present the data. First, the law allows companies to divide the company’s employees into groups, and to present according to this division the wage gap between men and women. The law did not stipulate how the division into groups would take place, so the employer would probably choose the division that would present the smallest gaps.
For example, suppose a company divides its employees by type of job – it could reach relatively large wage gaps, since there are many young women in the group, and seniority is a significant parameter in determining the level of wages. Then the company will abandon the cut by position, and go by seniority, thus showing smaller gaps.
It does make sense to divide employees into groups, as it allows for a homogeneous comparison. But the law does not dictate according to which criterion to divide, does not limit the amount of groups that can be divided according to, and worst of all: the companies do not have to reveal anything about the groups. Not according to what exactly the groups were divided, nor even what percentage of employees is included in each group.
Therefore, if we get, for example, a company with 5 groups, in 4 of which there is a wage gap of only 5%, and only in one gap of 20%, it is possible that most employees in general belong to the group with the highest gap, but it will not be possible to know.
Moreover, even within the division into groups, data can be manipulated. For example, suppose a company decides to divide its employees into groups according to seniority. It can also decide what the definition of seniority is – whether the length of time the employee has been with the company, or perhaps the length of time he has actually worked for it. Then if a woman went on some maternity leave, her seniority by this definition is lower than a man who started working with her on that date, and she can be assigned to a group of less experienced workers, whose wages are probably also lower.
The flexibility given to companies by division not only makes it difficult to discover the truth about the wage gap, but also makes it difficult to compare companies. How do we know if the pay gaps in Strauss are higher than those in the barn, if each of the companies has decided to segment the data differently?
Yossi Ginosar, CEO of Fahn Kana, closely followed the work process done by dozens of companies regarding the production of the report on the wage gap. In a conversation with Calcalist, he suggests lowering expectations regarding the data we see. “We know that the data published in the past speaks of a 23% pay gap between men and women in Israel. But from the data I have seen and presented to boards of directors, the results are softer, and the gaps will be smaller.”
Ginosar recounts a wide range of companies’ preparations for this report. “On the one hand there are small public companies, which were not at all aware of the law, and they will not have time to prepare and publish the report. The reports of the big companies, and how they will perform the data cutting. “In my opinion, ignoring the preparation of the report is a mistake, because it could hurt the morale of the employees, and it is also a reason for the civil lawsuits of the employees against the employer,” he says.
On the other side of the scale are high-tech companies that Ginosar says are investing a lot of resources in preparing the report and preparing for its responses. “Some high-tech companies are really apprehensive about the law. High-tech companies are fighting with their competitors for recruitment, and they are trying to attract employees not only through wages, but also through the image of the company, so the issue of wage disparities is important to them. “Among the image companies, the company may lose if the publication indicates discrimination, so they are in the process of performing simulations and cutting data, in order to check which division of groups will yield the best result for them.”
Ginosar, who is exposed to the companies’ methods of operation, points out that another way of blurring the data could be in the channel where the report will be published. The law gives companies freedom of action in finding the channel for publishing the report publicly. “We may see companies that choose to publish the data on the spot as a ‘loyal stake.’
Despite the weakness in the current wording of the law, the potential for the shock waves that the law can provoke may be revealed in the personal report that each employee will receive, including affiliation to his group. Although this report is also lacking Certain, even if it is partial, regarding his salary gaps and those of colleagues who are in a similar position.
“I think companies should not only delve into how to cut data so that the gap is low, but make a contingency plan of what happens when an employee sees the personal report and is disappointed,” says Ginosar. , And may even resign. The company must have a plan for dealing with such situations. ”
He further adds that “I understand that there are companies that are planning to put the report to the employee on the pay slip, and that is not true. The company should contact the employee and explain to him, and not be naive and just put it in the pay slip. “
And if they do not?
“Employees themselves may post the pay gap on social media. There are companies for which social media is a tool for recruiting employees, and if there is a sudden flood of employees who point to gaps, the company will have a serious problem.”
Despite the laws in the law – do not despair. The reports that are published are a first and important step for change, but in order for this move to be successful, corrections will be required. At the top of the changes: the division into groups.
What will further improve the ability to draw conclusions, will be to mark the largest group, and indicate what percentage of employees belong to it. You may also want to consider limiting the number of groups that can be divided into employees, which will also limit companies’ ability to manipulate data.
In addition, if you want to take the law one step further, you can also require companies to publish the segmentation of wage increases and promotions in the company in the past year by gender, while publishing segmentation of all employees in the company by gender, which will be an important indicator of the gap between men and women in the market. the job.
True, increasing the transparency of the report data sometimes infringes on the privacy of employees, especially in companies with a small number of employees. Therefore, it may be considered to exempt from the report small companies with, for example, less than 100 employees. It is better for fewer companies to publish a report, but it will be effective, than for many companies to publish a blank report.