Ending the gender wage gap

By Philippe Riboton, Managing Partner at HR Partners International Executive Search

Not a day passes without the topic of the gender pay gap making the headlines. The most stunning example was provided in March of this year when U.S. women’s national soccer team announced it was suing its employer (the U.S. Soccer Federation), for gender discrimination: this is simply the first lawsuit of its kind in modern professional sports. The parallels can be easily drawn between the world of sports and the world of business. Recent interesting cases in Europe (among others) include the BBC journalist Samira Ahmed who has launched a legal challenge against her employers or the case of a French employee of the Generali insurance company who was awarded some EUR 161,000 by the “Conseil des Prudhommes” in Nantes for wage discrimination, opening the way for others to follow suite (Generali appealed the court decision).

There is no doubt the fight for equal pay in Western Europe and the US is on the rise. But what’s the situation in Central and Eastern Europe?

According to the European Commission the gender pay gap in the Czech Republic stands at 21,8% (whereas the average gender pay gap in the EU is 16,2%), a rate quite close to Germany. Quite interestingly Poland in comparison offers one of the lowest rates in the OECD (standing at 10%). Why is it the case?

I have asked Paolo Lanzarotti, the CEO of Asahi Breweries Europe, the European operation of Japanese owned global brewery business Asahi, with thousands of employees across Poland, the Czech Republic, Slovakia and Hungary. “Unfortunately the gap does exist in the Czech Republic”, Paolo says. “There are a number of reasons for this and the one that comes to mind first is structural. The system is currently set up in a way that women often stay on maternity leave for three or four years per child. One of the reasons for this is the lack of capacity in nurseries and kindergartens, and the other perhaps the still prevailing mindset, that women are caretakers and it is expected from them to stay at home with the child.” As a matter of fact maternity leave in the Czech Republic often results into a much longer career break, which ultimately contributes to the pay gap: when women return to work after maternity leave they lag behind their peers that have remained “on the job”.

Of course this raises the necessity for reforms in the area of parental leave and calls for stronger state support in the area of childcare. But there might be stronger legislative reforms needed. Some say that if the law does not change, change may simply not happen. They point at the case of Iceland, a country which is ranked as the best place in the world for gender equality: as a matter of fact in 2018 Iceland became the first country to mandate that companies prove they are paying men and women equal wages. In other words companies in Iceland have to obtain an equal pay certificate or face fines.

But before such drastic policies are pushed on the political level what can be done on a company level in order to close the gap? Paolo Lanzarotti continues: “companies must promote equal pay by setting a supportive company culture that maintains engagement while maternity leave occurs as well as facilitate the process of coming back to work – child care facilities, part time opportunities, flexible hours etc etc.”

So what does Asahi, one of the largest employers in the Central and Eastern European region, actually do in this respect? Paolo Lanzarotti says: “Asahi culture is based on equal and fair opportunities and we allocate the time and funds necessary to review our compensation principles and structures. We started focusing more deliberately on this process some years ago and made a significant improvement with no pay gap in a number of our markets. But there is more to do: we must lead more visibly, regularly monitoring, assessing, and driving towards ensuring a fully equal approach with no gender pay gaps in our whole business.”