Totally Rewarding Chats | Ep. 13: Getting Ready for Pay Transparency in the EU

Countdown to 2027: Preparing for pay transparency impact

Stuart Hyland from Blick Rothenberg discusses the EU pay transparency directive and its implications for companies. The directive aims to address the gender pay gap by requiring employers to report on pay disparities and take corrective actions. The regulations cover employers of all sizes and include reporting on base salary, bonuses, variable pay, allowances, and benefits. Non-compliance can result in financial penalties, withdrawal of state-funded incentives, and exclusion from public sector contracts.

Companies are advised to start preparing for the regulations, which will come into effect by June 2027. Sean and Stuart stress the need to justify pay differences based on objective criteria, such as performance and market factors. The compliance process may require significant changes to reward strategies and systems, so early preparation is crucial.

They discuss using analytics and modeling tools to support compliance and ongoing pay equity monitoring. They also discuss the potential future focus on opportunity equity, particularly for women returning from maternity leave. Overall, the conversation highlights the need for proactive measures to ensure fair compensation practices and comply with upcoming regulations.

In this episode:

• Host, Sean Luitjens, General Manager of Compensation Benchmarks, Visier

• Guest, Stuart Hyland, Partner & Head of Reward Advisory Services, Blick Rothenberg

Episode transcript:

Sean Luitjens
All right, we are here. Another totally rewarding chat and I am pretty fired up. I've got Stuart Highland from Blick Rothenberg joining us this time. How's it going?

Stuart Hyland
Yeah, all good. Great, great to talk to you.

Sean Luitjens
And as you can tell, we have Stuart from Not The U .S. Where are you ringing in from?

Stuart Hyland
Yeah.

I'm based just outside of London in the UK.

Sean Luitjens (00:23.502)
Okay, and I know we talked about this, the important stuff, your football club.

Stuart Hyland (00:27.762)
I'm an Arsenal supporter.

Sean Luitjens (00:29.39)
Yeah, which is why you're on. Let's be clear for those that know me. If you are a Tottenham person, we might have to have this be very, very short. So in addition to Arsenal, usually what I have people do instead of trying to read a background that we grabbed off LinkedIn or some marketing person did, I asked for your elevator pitch, however many floors you need to do that. And then if you give us just a quick overview, because especially until I ran into you guys several years ago, actually,

Stuart Hyland (00:32.018)
Hahaha.

Sean Luitjens (00:59.15)
in another life, I had no idea who Blick was. So if you want to give a quick pitch for them, that would be great too.

Stuart Hyland (01:04.594)
Yeah, sure. So we'll start with the firm, Blick Rothenberg, a UK -based tax and accounting advisory business dealing with firms of all sorts of sizes and scale across the US, very strong global mobility department that I actually sit within. And yeah, we advise clients, we're part of the assets group and we advise clients primarily across the sort of European region, but increasingly part of global networks and working internationally, helping move people around the world.

Dealing with all of those complex tax issues far above my pay grade and technical expertise. I've joined the firm about seven, eight months ago and my role there is to really build out the reward advisory side of the business. I've been in reward consulting for 27 odd years, I try not to get too specific these days. Let's just say over 25 years, I'll leave it at that, with a number of advisory firms and... got experience working all around the world with firms of different sizes, across different sectors. And yeah, just love that variety. Outside of work, I've got a couple of kids, I call them kids, my daughter is now 20, she's away at university. My son is 17 and over the period of helping them grow up, I've become a qualified football referee. I don't get to go to the Emirates to referee, thank the Lord. But I referee kind of local grassroots football and I'm also a qualified athletics coach sort of with a specialism in throws and javelin. So yeah, there's not a lot of time available at the weekends for me to do anything else.

Sean Luitjens (02:39.31)
Wow. I did not know, one, I did not know you were a football referee. Because then I definitely would have sent you some notes through the year, you know, and a whole other session could be on the FAR and some of the calls on that. But that's really interesting. And I like to tell people now that I've passed that period of time, about the same age as you, I'm guessing, or time and space, since the last millennium. So I just leave it at very rounded. And I like the fact that it was a millennium. So.

Stuart Hyland (02:49.426)
I'm going to go ahead and close the video.

Sean Luitjens (03:09.23)
been in space since the last millennium. Yeah, and leave it at that. So with with Blick and your background, the reason I kind of wanted to catch up with you today, and we were chatting before was the EU directive, obviously is coming. And so I'll open it up just really huge from the standpoint of, you know, if if you look at the EU directive, 2027 is the date.

Stuart Hyland (03:11.738)
Sounds about right.

Sean Luitjens (03:38.894)
And of course, I will state I am an American that does know that the EU contains more than one country. It's not a country. And so you guys tackle that. What's your overview on the EU directive and, and, you know, how companies should initially start tackling?

Stuart Hyland (03:55.41)
Yeah, of course. So the EU pay transparency directive, the way it works in the EU is that the central EU body will sign off a paper, it will get all of the member states to contribute to it, to agree to it. And at that point, then it's sort of finalised and approved. And it goes out to all of the member states who then get to write their own laws on how they're going to apply it and interpret it within their member states. So...

Within the EU, we've got 27 member states at last count. And the central paper was signed off in June last year. And these member states have been given a maximum of three years to write these requirements into their national laws. So they have until June 2026 to write these things into national laws with the first part of the reporting requirements being by June 2027. So back to the date you were mentioning there, Sean.

The requirements themselves cover employers of all sizes. It doesn't matter if you only have two or three people in an individual EU member state, you will then have to comply in that state for some aspects of the regulations. And also the definition they use for pay is really broad. So yeah, it includes base salary, it includes bonus, it includes all of the other variable pay allowances over time and so on.

But also it includes benefits and things that sort of could be considered benefit in kind. And the push for all this is coming from the gender pay gap. So again, in the EU, a lot of different countries have to report their gender pay gap to the government, put them on their website. Really simply, it is just averaging out male and female salaries in a single business and expressing the difference as a percentage. And frequently it's in favour of men and usually to a reasonable degree, you know, 10 % plus in favour of men. It is not the same as equal pay for work of equal value where you actually look at specific jobs and say these are the same job size based on a formal job evaluation methodology and actually are we paying these fairly and consistently? It's not the same as that, but the gender pay gap is what's driving the requirement for these particular regulations. The

Stuart Hyland (06:17.906)
The average across the EU is running at about 13%. It is falling, but it's not falling quickly enough. And that's why the EU has introduced these regulations to really speed that process up. In the requirements, actually the title of the regulation itself is a real giveaway because it refers explicitly to reinforcing the principle of equal pay for equal work or work of equal value. That's what it's all about. It's making sure there is real pay equity.

And that this social injustice of perhaps women being paid less than men is eradicated. And as I say, at a rate a lot quicker than has been the case to date. The...

Sean Luitjens (06:56.302)
But when you say that, so the gender pay gap, so if you take a step back and you think about what you're talking about is they just have to report the gender pay gap. And I guess my question is going to be, are they going to be allowed to use more math to kind of back up their difference, right? Because there's potentially either fines or I have to be put on the naughty list, I guess, if I'm outside of 5%, et cetera. But are they going to be able to,

Stuart Hyland (07:16.082)
Okay.

Sean Luitjens (07:25.39)
defend that outside the case, regression being the obvious one, and are they gonna start picking out methods like, you know, Blender, Oaxaca is defensible and others not defensible to basically say, and I've been using bus drivers as an example, right? So you've got bus drivers who've been driving a bus for 30 years in the city. As more women have entered, they move up the same, that's kind of a three or 4 % increase every year thing going on, right?

Stuart Hyland (07:38.386)
Yeah.

Sean Luitjens (07:55.598)
And so they're going to be paid less than men because they just don't have the representation at the top. To cover the gap, you would actually either have to give every woman that's further down, you know, the experience level or entrance more than the men to kind of cover the gap. Or can you use the, do you think they'll be able to use the regression model to say, actually based on length of service and experience, we're either a good or bad payer.

It still doesn't alleviate the problem per se, but at least can explain any gaps.

Stuart Hyland (08:27.218)
Yeah, no, it's a good question. And I think if we look at where we are now across the EU, a lot of countries already have their own gender pay gap reporting methodology. Again, as I was saying earlier, every country has done it slightly differently, which doesn't help an international employer. I think a lot of them have just compared the raw averages and they stop there. So you end up with these pay gaps of 25, 30%. In France, in particular, they do a regression-based analysis.

Which really starts to pick that initial number apart and say, okay, of that initial 20%, how much of that is down to, I don't know, time served, premier performance and so on. And they come down to a much lower number. Under the new regulations, they haven't, and I really think they've missed a trick here. They haven't developed or recommended the development of a single gender pay gap approach across the whole region. They're still leaving it up to individual countries.

To determine how they want to do that. We're waiting to see. I wouldn't be surprised if more countries went down the regression -based pathway simply because under the new requirements, and yes, there are, you have to report by June 2027. And again, the countries will publish their own details on that around timing and scheduling. And it is linked to company size, how often you'll need to report.

But one of the new things that's coming in with the regulations are that if you have a gender pay gap of over 5%, I mean, you referenced that number just a moment ago, then you're going to have to do it at 5 % that you cannot correct within a reasonable period of time or that you cannot explain on objective criteria. Then you're going to have to sit down with your works councils, with your unions and do what they call a joint pay assessment, which is a really detailed deep dive analysis into

What has gone on, what's caused the pay gap and developing a corrective set of actions pretty quickly. A lot of firms really don't want to get into that detail with their works councils for reasons that you can imagine. So yeah, I wouldn't be too surprised if because of that 5 % number, the 5 % sort of threshold, we saw more countries saying we're going to allow a regression based model to come into play. Nothing's been confirmed yet. We wait to see exactly what happens with that.

Stuart Hyland (10:51.09)
But that's just one part of the new regulations.

Sean Luitjens (10:54.734)
Yeah, it's interesting that every country is going to be different. It's mind blowing how a country that's all across the EU and some of the other places are going to have to do it. And the rules for remediation and timing are different. It'll be interesting to see the legal precedents, I think, come out of these too, because I think people will say, you know, how bad's the penalty, both publicly and financially, in each region? And that'll dictate how it works.

Stuart Hyland (11:18.834)
Yeah.

Stuart Hyland (11:23.442)
Well, if we go straight to the sort of remediation part, and I'll talk a little bit more in a moment or two about some of the broader transparency and communication requirements. But if you fail to comply, again, the central EU paper doesn't set out the specifics of what any financial penalties will be. But what it does say is that they should be dissuasive. And it recommends that they are expressed as a percentage of...

The company turnover or the company payroll bill in that particular market. Even if that number is then only one or two percent, it's still going to have a material impact pretty quickly. And there are some other things as well in terms of penalties. So if your business receives state funded, I don't know, incentives, aid of some description, that can be withdrawn. And they've said very clearly they want that to be withdrawn.

Sean Luitjens (11:57.614)
Yeah.

Stuart Hyland (12:15.41)
And also if your business is a supplier of services products to the public sector, to the state, again, you will be excluded from those contracts if you do not address these issues. If you are found to be non -compliant in any of them, then you will be excluded from those contracts. And for a lot of employers, that's a massive stick that you're going to hit them with because there are a lot of firms across the EU who have the state, the government as one of their major buyers.

Even professional services firms, we're going to have to comply across Europe if we want to continue working in the public sector.

Sean Luitjens (12:53.102)
So how are you talking to companies about getting started? And we can, I'll let you kind of address that and the timing because in the US jokingly I've said the ostrich method is still okay. Probably not the best method to use, you know, from a scruple standpoint, but there isn't a horizon out there. And actually not knowing is still better than knowing and not doing anything about it. With 2027 coming, you know,

Stuart Hyland (13:06.386)
Yeah.
Yeah.

Sean Luitjens (13:22.222)
I feel like that's a short amount of time because you remediate through pay cycle or stand, you know, set aside and nobody's lowering anybody that's inequitable down. It's only a money add. So to amortize that over years, you only have two to four cycles left. How are you seeing companies the best practices to get started here?

Stuart Hyland (13:43.762)
Yeah, no, you're absolutely right. We are still seeing the ostrich approach that you referred to. I've run a number of webinars for sort of European employers over the last couple of months, and I averaged out some of the polling question responses that we got back. 93 % of employers that we've spoken to were either not aware of the regulations or have not started to prepare for them.

Sean Luitjens (14:08.494)
How's that even possible? I'm way over here. I'm way over here. I know. So, which is mind blowing to me because of the, again, because of the penalties. I think in the US, I'm less surprised, especially in states where there's no regulation, no penalty. HR has plenty of things to do. Like I don't need to deal with it, but it's been such big news. And like you said, I mean, the one or 2%.

Even 1 % when I've mentioned to people, some businesses operate on a four to 5 % margin business. You start talking about 1%, that's significant in cost and share value and ability to do things. I can't believe people don't know.

Stuart Hyland (14:48.69)
I know it is a scary thought and I described the change. So the gender pay gap reporting aspect that we spoke about is just one part of the regulations that are coming in. There are others as well and I can just run through those briefly, but it does represent, I think, quite a seismic shift in how an employer is going to have to work with their people and communicate to their people. It's going to be a massive change in practice in the marketplace, even in markets that are not part of the EU.

But are closely related to them. I've spent a lot of time, I mean, I'm based in London, and I've spent a lot of time in the last few months talking to UK -based employers about what these EU regulations mean for them. And again, they didn't have a clue, they had no idea. And so it's a real transformation for them as well and an education piece. And that's typically where we tend to start the response. It's got to be an education piece for the leadership team. But some of those other, some of those broader requirements and...

You'll recognize some of these from practices across the US, I think, but yeah, we're not going to be able to ask candidates that we interview for their salary history, current salary. We have to put on an indicative salary range with any job advert that is posted. So I think you see those across a lot of states in the US. A lot of parts of Canada are coming up with those as well. Employers, you're going to have to publish information so that...

Employees can really access it easily on how pay is set, how it's managed, how it's progressed. And you've got to show that it's based on sort of objective gender neutral criteria. So essentially, you're going to have to put large chunks of your reward strategy into the employee domain. And we always, again, we always warn clients, if that's the right word, that when you do that, expect it to end up on the desk of your competitor fairly soon. These things have a way of working their way out into the ether.

Sean Luitjens (16:42.702)
Yes.

Stuart Hyland (16:46.246)
And then you've got to, yeah, some of the implications of that are quite scary for employers as well. And I'm sure you've seen it across the US, even with really simple things, publishing a salary, that risks disengaging and upsetting any existing employees if they see their current role or a role a bit like theirs being advertised for more money. That could be really upsetting. One of the clients I work with, they publish salaries as a matter of course and have done for many years.

And employees there describe it as the single most disengaging thing the firm does for them. They said it feels like the firm is punishing loyalty and the only way they can get a pay increase is to leave and come back, which is not what the firm wants to hear. But yeah.

Sean Luitjens (17:29.942)
Yeah. And there's stuff between, you know, it's interesting because, you know, if you can get the rational side of that, the company's stuck between, you know, hey, if I post a job that's really low with the range, no one will apply thing. So I have to advert, does that include benefits? That includes the total package. What does it include? And so they're stuck between, do I market the whole package? Do I look at better employees and try to, you know, get them back inside my range? Like, it's hard on both sides for sure.

Stuart Hyland (17:58.042)
Yeah, it is, it is. And not being able to ask for an individual's sort of current salary as well. I think a lot of line managers are going to struggle with that. I've often asked that question in the past and I know managers kind of use that almost as a pseudo skills assessment. If I know that you work for one of my recognizable competitors and they're paying you a hundred thousand, I can be pretty confident that you can come here and do a job that I'm looking to pay a hundred and ten for, whatever it might be.

You can't do that anymore. So there are some lessons there to be learned from things and steps that you guys in the US have gone through in various states previously. A couple of other things very quickly. Pay secrecy clauses in employment contracts, they're going to be rendered null and void. The pay information is basically deemed to be belonging to the individual. If they want to stand up in the middle of the office and shout what they earn,

If they want to go on to any of these glass doors, some of these job boards and publish details, it's entirely up to them. The employer cannot influence that anymore. And also there's another requirement, which is potentially a lot of work for some departments and teams because employees will have the right to request every single year for information on how their pay compares to the average pay levels broken down by gender.

For work that is rated as either the same or at the same work of equal value. Not only have you got to provide that to them every single year if they ask for it, you have to remind them of their right to ask for that information every single year as well. If you employ a couple of thousand people across the region, that's potentially quite a lot of extra workload and it does raise a bit of an ethical question. I think, you know, if employees are entitled to this information, do you really want to...

Force them to ask the question or are you proactive and you embrace the transparency thing and actually just provide it to them as a matter of course. And generally across Europe, we're advising organizations to build it into their annual pay review process, have it built into their systems, their technology to do that calculation automatically so that when you hand over the pay letter and information on bonus, they're actually getting a supplementary piece of information which gives that to them automatically. So there's...

Sean Luitjens (20:22.03)
Yeah, I'm a proponent of that because my opinion is, you know, someone's going to get that information if they ask, and would you rather communicate that or the employee who might not be so excited about their paperwork? And so if you communicate that on a consistent basis, you take that, you own that communication process and how you position it and how you label it, et cetera. So I'm totally down with that from your perspective of not letting the employees own the communication.

Stuart Hyland (20:45.682)
Absolutely.

Stuart Hyland (20:51.474)
Absolutely. And I think when we work with them, we go into the boardroom to talk to them about this particular topic, we often have to try and sort of explain that pay transparency is not the disclosure of every individual's salary in the business. We're not talking about creating a board in the reception area saying Stuart earns this and so on. That's not what this is about.

But neither does it mean you have to pay everybody the exact same rate for doing the exact same job. You can justify pay differences, but they have to be on a clear set of objective criteria. So performance track record, we've got a performance management system which shows that Sean and I are doing the same job, but Sean's been performing at a much higher rate for a number of years. So therefore, I can justify paying the two roles differently.

The other one is obviously around market premiums and making sure you've got market data that is robust and that you can then use to explain why someone based in Paris might be earning more than someone based in Lille to the north. There is a difference there even if they're doing the exact same job or there could be a skills -based premium when they're working in the same office.

There are reasons why you can justify paying people differently. We're not moving to a world which says everyone at this level has to be paid the same. And I think that's often a slight misconception that we have to deal with over here.

Sean Luitjens (22:19.598)
Yeah, I think people are getting their heads around it in HR and comp, how you communicate that out in the market. And again, for managers, it's going to be really hard. It's not what they want to do. And I always use kind of engineers. They did not engineers didn't get into engineering to handle HR discussions. That's, you know, that wasn't what they were excited to do. And so to go in and say, you know, Stuart, you're going to get money, you know, X amount that's easy. You know, if you're a high performer.

But when you start having to stay in your lane around Sean, you weren't a great performer. You have to get paid this for all these other reasons. I think people forget them. They have to go back and work with them. Like, you know, so it's not like you give that discussion and then you don't talk to them for a year. You have to then go work with them for another year. And so they're just hard. It's the human and human resources discussion and the peanut butter spread and throwing HR under the, under the boss and saying, well, they gave us 3%. So we're giving everybody 3%. Not my fault.

Isn't a thing anymore. One, it makes a bad problem worse, obviously, peanut butter spreading with pay equity. But secondly, you can't do it from a philosophical standpoint anymore. So it's just getting harder. So from a timing standpoint, you know, 2027, my guess is then you're saying people need to, you know, start jumping on it now.

Stuart Hyland (23:30.194)
It, yes. Yeah, I mean, in principle, it could be June 2026 is the date that we're sort of working to at the moment as the date where you'd need some of this stuff in place. And as I say, the papers were signed off initially in June 2023. We're now in June 24. So we're already a third of the way through the time that employers have got to potentially prepare. And it's somewhat disturbing, as we were saying earlier, Sean, that there are still a lot of employers who just do not know about this and certainly not.

In any detail. And the reason why this is concerning, it's the changes that you're going to have to make to comply, they're not the sort of changes that you want to leave it until six months beforehand. And then if you find yourself six months beforehand in the boardroom saying, right, what do we need to do to comply with this thing? You're in trouble. It's too late. Some of the changes are potentially massively significant and will take time to deliver. So for example,

You might find you've got to introduce a new grading or job evaluation methodology to make sure you can comply with the assessment of work of equal value. It has to be an analytical methodology. If you are currently using a system which is simply based on matching into a job survey catalog, a market data survey catalog, and we know which ones are out there, that's probably not enough on its own. You've got to make sure there's something robust and more rigorous in place behind that.

If you're simply using level descriptors that you've drafted yourself in the business to explain what goes on at different levels, again, you need to make sure that's underpinned by a formal job evaluation methodology.

Sean Luitjens (25:17.55)
I think it's really important. I've been, now I'm going to find out what kind of apples we have in the UK. So I've been telling people, you know, obviously you can't compare apples to oranges, but when you think about getting everybody lined up at the bottom, it's not just red apples and green apples, and it's not even gala to mac apples. You really have to have gala apples, gala apples, which then leads to the question, do they have gala apples in the UK?

Stuart Hyland (25:21.97)
Yeah

Sean Luitjens (25:41.006)
But you know, you got to have the same type of apples measured now. And so that process of not just saying I need apples, it's what kind of apples and putting them in the right piles and creating those analysis groups that actually do line up to themselves is work.

Stuart Hyland (25:49.81)
Yes. It is, it is, and it does take time. And I think a lot of European employers, I think Europe uses slightly more job evaluation methodology installations than we might see in the US. I think the US kind of diverged in the nineties. And I think even there though, in the EU, we've got a lot of employers who are based here who still don't have anything that robust. So it's a lot of work for them.

And yeah, I have spent a lot of time in the last couple of years talking to employers headquartered across the US and helping them to get their head around what this means, because they're not as familiar with the concept of equal pay and they're not as familiar with what a job evaluation methodology does and doesn't do. So all of that education takes time. And even when you start the project, it can take time. I was working on one last year and you know, it's a good 12 to 15 months for a...

International business, this one had a couple of thousand employees, it takes time to do that work and you need to give it time to take employees on the journey. It's not the kind of project or work you really want to rush. And that goes for the other changes as well. I think, you know, these sorts of bonus schemes, for example, where I give you, Sean, a pot of money, I give you a couple of hundred thousand and say, can you divide that amongst the three, four, five people in your team as you see fit?

Those schemes are not going to be compliant. You can't have schemes that are highly discretionary. You've got to have some structure, guidance, and framework behind it. And again, that's not the sort of thing that you just change overnight. You try not to change it mid-cycle because that just sends out really confusing messages. And a point you made earlier on, we've probably only got two pay cycles for a lot of employers between now and June 2026. So...

You haven't got long, if you want to start adjusting, making these adjustments in a really thoughtful, considered way, you haven't got long to start work on them and to start lining up all of these work channels. You're going to want to review your reward strategy. If we're going to have to publish large chunks of it, and bearing in mind it will end up with our competitors, I want to make sure it says what I want it to say and that it's driving the right behaviors and performance outcomes. Maybe I need, if I'm going to use performance to justify differences in pay,

Stuart Hyland (28:15.794)
I need to have a look at my performance management system and make sure it's being operated consistently, fairly, that we're calibrating and that it's being used by trained individuals and not sort of very differently in different corners of the organization. And pay data, again, if I want to use pay data that is really robust. And I'm always slightly amazed at how many organizations, particularly in the last couple of years that I speak to them, when I asked them what their primary data source is.

They say, we take data from Glassdoor or LinkedIn or so on. And it makes me really nervous because it's not robust data. It's not replicable. It's self -reported. It's not analyzed in any way to make sure it's consistent. And you're just relying back to your point earlier, Sean, you're just relying on a job title and you have no idea what's behind that. And we all know that if, you know, even if we were to take the job title of head of reward,

There are big heads of reward, there are small heads of reward, there are heads of reward that are focused on one thing rather. It's just not comparable. So yeah, you're going to have to look at that. And when you put all of those different things together, there is a two to three year program of work very easily in a lot of organizations. If you don't start looking at your compliance now with the regulations, you're leaving it really late. You're taking a lot of risks and it does worry me that we're going to have to see you.

Sean Luitjens (29:35.634)
I think the big piece of it as I look at it is you've got two to four pay cycles. You can do a pay equity set aside and deal with that. I think the finance team will want to amortize the costs over a period of time. But the other thing I look at and in listening to you is what am I using for grading or technology? So the scale, right? So you either have to throw a lot of money at consulting or tech. And so talking to you a little bit about tech in this place, because obviously we're a little biased on

Stuart Hyland (30:03.93)
Thank you.

Sean Luitjens (30:04.142)
The remediation side, right? Or the comp planning side, which we know better just because that's where we're at now. You have to go through and jokingly, obviously we want people to pick us, but you have to go through to be able to do comp planning in an equitable way, be able to measure that, make sure you give them anchor points, set everything aside so that it's done fair. You can give managers some guidance, but those guardrails got to be tighter now.

So a company has to go back and evaluate technology and implement technology in these places, in my opinion, and to be curious to you. But same thing with grading, almost to make sure that you have someone to stand between you and how you manage this process to be defensible, letting everybody have access to an Excel or a Google Sheet and make the sheets. How do you go back and look at how they acted and how they did that? So how do you...

How do you see tech playing in this space in a prioritized way? Because I think a magic wand, people would like to be like, yeah, tech will solve a lot of these problems with some guidance is my opinion. But where the hell do you start? And again, three years goes fast.

Stuart Hyland (31:17.106)
Yeah, it does. It's already going fast. And I think there's two different stages to the journey. There's the journey to compliance, and then there's managing business as usual once we get to that date. I think on the journey to compliance, there is definitely a really clear role for technology to enable that process. So the journey that we tend to take clients through at Blick Rothenberg is very much focused initially on the leadership education, help them understand what's going on. And that's obviously a sort of a face -to -face.

Activity and then we do a readiness assessment where we chart current practice against all of the different elements of the new regulation and then we talk about risk of exposure and sort of risk of failing to comply and we talk about evolutions against that. As part of that exercise it's incredibly helpful if we can use the technology to do a really simple

Equal pay audit of some description, really starting to sort of get into looking at what the current picture looks like across the business within different divisions, within different geographies, within different teams. The more information you have at that stage in the process, the better informed your decisions can be around the response you need to take. And I've seen it previously where, you know, one client that we were working on,

Looked good overall, but when we got into the weeds and really started looking at the detail, that, funny enough, it was their technology function, there was a massive difference in how men and women were treated and paid and the roles that were occupied. And the data that was provided really pointed to that incredibly quickly. I'm sure we could have got there manually, but it's a bit like trying to do sums on a piece of paper when you've got to calculate a segment. Why would you do it the long way when you can just press a few buttons and outspits the...

Immediate answer that you know is going to be correct. So that's an immediate area where technology helps and just in planning the journey. But with that information, we can then start thinking about the type of business you want to be, the employer value proposition, as well as the regulatory side of things. So what evolutions do we need to make? And also at this stage, and it was back to your point there around how do you plan the comms around this.

Stuart Hyland (33:29.746)
We suggest really early on that you build in an employee education process. Start letting them know what's coming, what sort of things you're going to have to change over what time period and why, and really own that message. Because if you don't own the message, the works councils will, the media will, and neither of those are going to be outcomes that will necessarily work in your favor. And then you can get into actually delivering all of the different changes and evolutions you need.

That doesn't have to be a long process. Those sorts of steps I took you through there, it can be sort of a month or maybe two tops, but really important to build the plan. And then when we get to compliance day and everything is lined up, again, that's where technology I think becomes invaluable in helping to monitor things like the pay gap and helping managers to model decisions that they make. If we're coming up to this pay review process, if I...

Make these decisions, if I allocate reward in a certain way, what's the impact of that on the gender pay gap, on the some of that that sort of advanced modelling so people can see the impacts of decisions before they get to the point of communication and implementation, I think it'll be hugely valuable, hugely valuable.

Sean Luitjens (34:43.662)
I think the piece that's missed a little bit, and obviously we're at Vizier a little more biased around this, but the analytics around the current state of your business. And by that, I mean, you've got two or three cycles, but what departments are turning over when? Where's the span of control in divisions or size of organizations? What is your ability to change it through the natural business cycle?

And in some places, where is it not? So if you have no turnover, right, it's, you know, then, you know, it's money. Money is your issue, right? If you've got turnover coming, you have the opportunity to potentially address issues at a different rate and pace and different dollars are spread out different ways. I think the ability to look at, you know, total costs, total actual cost versus projected cost. So when they look at a 4 % increase, you can be more strategic about that.

And that might really feel like more than five and a half if you actually stick to budget. Now you have a point and a half to use towards equity remediation. So I think those analytics right now to set themselves up for success are just as important. And then ongoing, I agree with you because pay equity is, I don't know if you've heard the term wicked problem. So not just because I'm from New, you know, we're in New England, do they call it a wicked, but there's actually a thing if you Google wicked problem, it's just an unsolvable problem.

Stuart Hyland (35:55.698)
Yeah.

Sean Luitjens (36:05.134)
So the only way that equity stays the same is you pay everyone the same and nobody leaves and nobody comes for a different pay, which we know is not how the world works. And so your point on monitoring, I think is also really important. It isn't 2027 check. It's not a check the box item, you know, checked, we're done. As soon as you hire somebody or somebody leaves or you go through merit, all the numbers are different.

Stuart Hyland (36:29.714)
Yeah, and we should remember as well that the only place that has that minimum employee expectation is the gender pay gap reporting side. All of the other transparency points I mentioned apply whether you've got one or two people in the country or one or 200 ,000. So even if you are sat there thinking I'm only a small employer, I've only got five people in France, I don't have to worry about this. There are some parts you don't have to worry about, but a lot of it you do, I'm afraid. So it does apply to everyone. And...

And with your point on the technology, I think it actually becomes more important as we run out of windows to make changes, to be able to see actually, are we going to be able to absorb this in a business as usual way through the normal pay review process? Which elements are we going to have to really pull out and adjust manually? And then actually using technology when it comes to the design of new propositions, making sure we can plug and play that with the new technology so it all integrates.

Nicely and I think that's where a lot of organisations have not necessarily joined the dots up quite in the past. They've kind of missed the link between the design and the technology they have to support it and they end up kind of force fitting the two together and you end up with this kind of marriage made in hell that doesn't quite work for anyone involved.

Sean Luitjens (37:46.51)
So the last thing I'll hit you up with is we kind of press towards time on there is when do you see because this is basically pay equity in range, right? Do you see kind of getting out and your crystal ball looking forward? The EU and others start to look at opportunity equity because for me one of the scarier things if you want to call it is if you want to handle pay equity One of the evil ways to handle it would be don't promote women. Let them keep moving up through the range and and do that.

And then men would move up to lower in the next range and women would be the right. And so opportunity equity is just as important. And I think maybe more important over time to basically look at and say, are they getting the same opportunity? Because they're a better employee, they're a better employee. They should be promoted faster. Right? Yeah. You see that getting tackled in the near future?

Stuart Hyland (38:37.49)
Yeah, I think it will. Yeah, definitely. And I think this transparency that's there now is a good first step on that journey because people will be able to see more clearly, you know, the pathway, what does the next level look like and what do I get if I make it there? But I think we are seeing as well at the same time as this, there is a movement across, I don't think it's just across the EU, but employers signing up to making sure they have a minimum level of

Female representation in the boardroom. That is a very common practice across the EU and in the UK. So I think we're going to see more and more of that. And I think, as I say, the intention behind these transparency regulations is to remove those dark corners where potentially discriminating practices can hide, whether the discrimination is intentional or otherwise. I like to think a lot of times it's not intentional and it's just happened through mishap and through poor design.

So I think actually once we start to remove and shine a light in those corners, people will start to become more aware of the opportunities. But it does have to be backed up by other employer policies. So the classic one being return to work after maternity leave. How can we make that a really easy process? And I've had colleagues and sort of friends describe that move as it's so scary. You've had a year out to raise a child. You're exhausted. You've sort of...

Longed for adult conversation during the day and then you come back into a professional workplace and people describe the experience as being one of the scariest experiences they have to go through. So what can we do to make that really easy and rewarding for them to do that at the same time?

Sean Luitjens (40:20.046)
Yeah, it's interesting for me as we get near the end, the whole pay equity thing, because for me, I sometimes find it hard to wrap my head around how we got here. And I say that because the market's so competitive jobs, to be a competitive company and win, like for me, I've always just simply said, I just want the best available player, right? I don't even care about the rest of it. I just need the best team I can put out on the field on the pitch.

And so I, it, I sometimes I get mine, you know, my, I try not to worry so much on that piece of the problem and try to solve the math piece because I get a little flustered. If you're trying to win as a company and do the best thing, best you can, you just put the best available players out there. And, you know, nature will sort itself out, you know, on that front. and I think we're, it's equitable. Like, and if anything, I would jokingly say, as my wife would probably remind me.

Stuart Hyland (41:10.002)
It will.

Sean Luitjens (41:16.462)
The pay equity problem, if we just pick the best available player means men would make less. You know, like that's actually what might end up happening. And so I'm stoked people are getting, you know, tackling this. I think 2027 is going to come really fast. I think companies have a really cool opportunity to use the communication process either. It'd be interesting to watch. Some I think we'll do like always, we'll do an amazing job and talk about where they are and talking about their pay philosophy and positioning, explaining it. And some of them will...

Will just be incredibly awful at it.

Stuart Hyland (41:51.122)
I agree. And I can't see any early mover disadvantage with this one, only an upside to going early. One of my clients has been educating employees and talking about what they're doing in this space for about seven or eight months now. And they talk very positively about the benefits they're seeing in terms of talent retention, but also when they are going to recruit talent, being able to provide them with all of this information. And they said, literally candidates are going, wow, that's great. So.

Sean Luitjens (42:20.174)
Well, there's no downside right now, right? I mean, you don't have to disclose anything and not, you know, so you can basically take a look in the mirror right now and figure out, do I have a big problem, little problem and make a strategic plan? You know, if I'm at 7%, you're like, okay, you know, we can tackle that in the next two years through some items. If we're at 17%, like, you know, we can't wait. This is an urgent thing now and plan accordingly. So I'm a little baffled when people are like,

It just seems far in a lot of things in life, you know, three years, 2027, but it'll be here fast. So do you have any last comments for Orgs? Like what's your, you know, as we get near the end here, what do you have to kind of tell everyone, I guess, or let them know, give you your thoughts.

Stuart Hyland (42:57.234)
Yeah. I think all I would say is please don't wait. Emphasizing that point, there is no reason to wait. Yes, we are waiting for countries to start publishing some of the fine details. Sweden actually published about nine or 10 days ago. It's a document that's nearly 400 pages long in Swedish. I'm working my way through it. Germany are expected to publish this month as well. So things are happening now. There is no need and no excuse to wait and delay any further.

And I would also say that even if you're not based in the EU, you're primarily a UK business or even if you're only a UK business or only a US business, these practices are going to change the market across the whole of that region and beyond, I'm sure, pretty quickly. So educate yourself in terms of what's coming, what's going on, and start to think about how can we respond in this new world because it is a new employer relationship with their people.

And obviously, quick plug, I'm very happy to help and to have a conversation with anyone that wants to go further into this topic.

Sean Luitjens (44:14.83)
So I guess two things, one, yeah, Stuart's information will be in the links, et cetera. So easy to find and is not actually that hard to find on LinkedIn either, I don't think, especially if you can spell Blick Rothenberg. The other thing I'll ask, very important, do we think Arsenal is winning a championship before the requirements and before 2027 regulations are in place?

Stuart Hyland (44:27.602)
Yeah. We're in for a great season next season, Sean. So I think next season is a gimmick. Get yourself over here. We'll watch a game or two because it's going to happen.

Sean Luitjens (44:48.046)
Okay, okay. That's what we say. That's what we say every, every June. So we can hope. So this has been awesome. So again, people you can find Stuart's information online, you can hit him up on LinkedIn. And thanks again so much Stuart. This was great.

Stuart Hyland (44:53.554)
We live in hope. Thank you very much.