Closing the gap: what organisations can do to create an equitable remuneration policy

‘Our board wanted to gain insight into whether we, as an organisation, comply with the principle of equal pay for equal work,’ says Edwin Dortland, HR Manager at housing corporation Woonstad Rotterdam. ‘We had already conducted several calculations ourselves based on payroll data, but we were looking for a transparent and proven methodology. Erasmus Q-Intelligence provided us with the desired insights. Last year, they conducted a pay gap study for us, after which we immediately commissioned them to carry out an in-depth follow-up study.’ 

The unadjusted and adjusted pay gap 

‘The pay gap refers to the difference in remuneration between two groups of people. It often concerns gender, but can also relate to ethnicity,’ explains Buis Boone, data scientist at Erasmus Q-Intelligence and the researcher involved in the pay gap study at Woonstad Rotterdam. ‘There are two types of pay gaps. The unadjusted pay gap, firstly, compares salaries between men and women, regardless of their role or position. Essentially, this means comparing a refuse collector to a CEO. This gap is large because men still tend to hold higher positions and work in different sectors more often than women.’ 

To gain a true understanding of the principle of 'equal pay for equal work', the adjusted pay gap must also be determined. ‘In this study, people with comparable attributes are compared, considering factors such as job level, education, age, and work experience. These are legitimate reasons for a pay gap, where gender or ethnicity are not. When adjusting for these factors, a clearer picture emerges of the extent to which employees receive equal pay for equal work.’ 

Pay gap research 

In collaboration with Erasmus School of Economics, Erasmus Q-Intelligence has developed an integrated approach to pay gap research. The study at Woonstad Rotterdam began with the provision of necessary data to populate the statistical models used by Erasmus Q-Intelligence, which in turn transparently revealed the pay gap. ‘In order to determine a meaningful adjusted pay gap, it is important to understand the context of an organisation,’ Boone explains. ‘By considering context, you get a clearer picture of where the real issues lie—whether it's pay inequity within roles, promotion barriers, or recruitment biases. In several sessions with Woonstad, they provided us with all the necessary inputs to make meaningful comparisons. This allowed us to draft a clear report detailing the pay gaps across various categories of employees.’ 

At Woonstad Rotterdam, an unadjusted pay gap of 8.3% was identified. Upon adjustment for gender-neutral, objective criteria such as job level and work experience, an adjusted pay gap of 1.5% remained. This is better than the average in the Netherlands, and it is below the 5% criterion following EU guidelines. ‘Although these percentages are manageable, they still indicate room for improvement,’ says Dortland. ‘That’s why we immediately requested an in-depth follow-up study to gain even greater insight into the specific areas where the pay gap exists.’ 

Certification 

At the European level, the Pay Transparency Directive has been established to reduce pay inequality between men and women. From 2027, organisations with more than 100 employees will be required to report on pay inequality within their company and take corrective action if the pay gap exceeds 5% and cannot be justified by gender-neutral, objective criteria. 

Erasmus Q-Intelligence offers organisations committed to equal pay the Equal Pay Employer certification. This certification ensures that organisations comply with the requirements of the Pay Transparency Directive.