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Part III: “Fair Pay to Heaven” – or “High Pay to Hell”?

Morten Broekner

2. okt. 2023

AND, how do you get ahead of your competitors?

How to get ahead of the Fair Pay curve to ensure both legal compliance, but more importantly to gain a lead competitive advantage over your competitors?

In this article on Fair Pay, I am providing my perspectives on how to elevate the Equal Pay and Transparency debate to another level than just being compliant and competitive in your local labor markets. Not because you have to - but because it is what you wish to do. We have already seen in the US labor market*, that applicants are beginning to deselect employers that do not demonstrate a fair and transparent pay practice, and this trend is moving faster than any EU or country legislation. So, time might be limited to get things in order if you want to stay (or get) ahead of the curve.

But how do you become the preferred employer of choice when applicants are looking for their next career opportunity? Not just because of the attractiveness of the job alone or the size of the paycheck - but because your company show the integrity of being the fair and transparent employer you truly wish to be. Offering the right pay for the job, not because you must, but because you want to. Taking pay transparency to the highest denominator of fairness with the practice that draws headlines – what some would call ‘an employer with an attitude’.

Read more below on how to take the double leap on both the legal compliance of the EU Pay Transparency Directive AND harvest the advantages of being the preferred fair employer of choice.


How do you get ahead of your competitors?

First and foremost, ‘Get your stuff in order’. Ensure you have the needed HR and reward tools and processes in place – the maturity model above will help you assess and plan to get your reward backbone in place.

Secondly, make sure it works. All HR and people leaders must know your people processes and have understood and accepted that hiring, promotion and rewarding people are a serious matter where they are acting on behalf of the whole company in ensuring it becomes the fair and attractive place to work – not just in their own department or team. Not being allowed to apply for a promotion because it was managed in a ‘hidden behind the scene’ promotion process between managers is the most unfair thing you can do to an employee. You lose trust and people will start looking for career opportunities outside your company – while making sure telling everybody that there are no career opportunities in their company – i.e., ‘here you can’t get a promotion because you need to be part of the “old-boys” network to get an advancement’.

Thirdly, ensure that you are paying your people consistently and fairly AROUND your desired (and competitive) market position. Set your internal pay ranges so that these reflects your desired competitive position in the labor market. In other words, your company pay ranges should be both your external pay offering as well as the range for how you intend to pay your current people to keep them engaged and stay with you. So, make your pay ranges to HOW you deliver your company’s pay philosophy. If your internal median salaries are not currently meeting the midpoints of the pay ranges reflecting your pay philosophy – plan for how to accomplish this through guidance of reallocation of pay budgets in your annual salary review process as well as how you set salary when hiring and promoting people. Most companies will be able to accomplish this within a 3-to-5-year time frame without increasing the overall company pay budgets but simply reallocating the current pay budgets through different pay setting initiatives and segmentation in the yearly pay cycle and hiring actions.

Finally, cannibalize your own pay structure – making it your competitive advantage to show your pay levels to your competitors and your current and future employees - which is probably the opposite of what you do today. Many employers fear (and some employees hope**) that pay transparency with openly communicated pay ranges will lead to higher pay levels in general, so make sure NOT to make your pay transparency activities into a race for offering the highest pay proposition, but by defining your fair and transparent baseline for engaging in attracting new employees, and at the same time keeping your current people engaged and staying. Focus on your full offer of employment – the complete value proposition – not only the tangible reward elements and career opportunities but moving the discussion beyond to talk about the higher purpose of people’s self-realization professionally and as a whole person in balance, BUT also the link to the higher purpose of joining (or staying) with your company. So, WHY should people decide to devote their time, energy, and integrity to your company – are you worth the risk of winning or failing together with?



By Morten Broekner, Executive Reward Advisor



* Monster Poll: Workers Want Pay Transparency. Nearly all (US) workers (98%) believe companies should put salary ranges in job postings, and more than half (53%) would decide not to apply for a job that doesn’t.

** Based on own experience across a number of global Danish organizations. A 2023 study by PayScale also shows that when comparing equal pay for equal jobs in North America, they found a gender difference of 1% (0,99$/1,00$ from males to females), when looking at the Controlled Gender Pay Gap adjusting for all measured compensable factors on salaries for 758,000 people in the U.S

*** Joint pay assessment: Employers must, in collaboration with employee representatives, carry out a joint pay assessment if these three conditions are met:

  1. The reported pay gap between men and women is greater than 5%

  2. The pay gap cannot be justified by objective, gender-neutral factors.

  3. The employer has not corrected such an unjustified difference within six months of the date of submission of the reporting.


Background Readings:

  • DIRECTIVE (EU) 2023/970 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 10 May 2023 “to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms”

  • Boomers hate to talk about pay, but 81% of Gen Z welcomes full Candor:

  • Here’s how pay transparency is going in 2024:


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