Are we ready to admit that a customer service rep and a developer can do work of equal value… and pay them accordingly?
These examples aren’t random: I chose them because customer service teams are often largely female, while developers still skew male.
And the fact that this question feels uncomfortable is precisely the point: it takes us straight to the heart of the Pay Transparency Directive.
Because the Directive is built around a simple principle: equal pay for work of equal value. It asks us to change the way we think about work, and the framework we use to assess it.
Of course, the concept of work of equal value is nothing new. In France, it was defined in law as early as 1983, and several other EU countries have also tried to make it enforceable at the national level. But, as organisations like Eurofound have noted, decades of country-level equal pay legislation have not been enough to close the gender pay gap.
The reason? In most countries, the burden of proving that pay discrimination has taken place is entirely on the employee. It’s up to them to prove that their work is “of equal value” to someone else who earns more — even if they don’t usually have access to the data needed to make the case.
This is where well-intentioned laws run up against reality.
The Directive recognises this problem and attempts to reverse the logic by shifting the burden of proof. Under its rules, the employer is responsible for proving that there is no pay inequality, or for justifying it where the gap exceeds 5% in any category. Employers must also provide employees with the relevant data, and create categories that group together roles involving work of equal value.
Forget job families. The categories used for reporting will need to bring together roles of equivalent value to the business, assessed against four criteria: skills, effort, responsibility and working conditions. In other words, soft skills finally count.
For me, this concept is where everything clicks into place and the Directive’s true purpose is revealed.
Breaking glass walls
The Directive was designed to break down the glass walls of gender pay inequality: the horizontal barriers that keep women confined to certain types of work.
It does this by calling into question the very definition of the value of work, including by bringing the role of soft skills into the mix.
Skills like listening, communication and empathy — which are central to service and support roles — have long been undervalued in the labour market. And when work is undervalued, it’s underpaid.
And yet, many companies today feel that this problem doesn’t really concern them. The classic argument goes something like this:
“Our developers are mostly men, and there are no pay gaps there. The same goes for support: the team is mostly women, and there are no pay gaps between them either.”
In short, nothing to see here…
Except that’s not quite true. The Directive forces us to look at the problem from a different angle. In theory, at least, employers will need to define what work of equal value means to them, then evaluate roles accordingly.
Ultimately, that may mean having to acknowledge that certain tech roles and certain support functions do, in fact, represent work of equal value.
And that raises the uncomfortable question: why is one group paid so much less than the other?
The “women’s work” effect
You could argue that women are free to move into better-paid professions.
The problem is that this is not simply a matter of individual choice.
A brief aside here: there is a substantial body of research on this topic. The key reference is probably the 2009 study by Levanon, England and Allison. After analysing half a century of census data from the US, they found that the higher the proportion of women in an occupation, the lower the pay, all else being equal.
In short, work associated with women tends to be culturally devalued.
Of course, there is nothing natural about this phenomenon, as shown by another historical example from the world of tech. Before the 1970s, coding was seen as routine clerical work, and therefore not especially valuable. As a result, women were overrepresented in certain programming roles. Then the industry decided it wanted to change its image and gain prestige.
You can guess what happened: the profession was masculinised. The programmer came to be associated with stereotypically masculine traits. And those traits were valued.
The Directive challenges a deeply embedded pattern: the collective value we assign to a particular field of skills.
The reality is hard to ignore. The more society — or the market — tends to assign low value to an occupation, the more likely that occupation is to be held by women.
A major shift for compensation
The Directive is trying to pull us out of this logic, and rightly so.
But for compensation teams, this could be a major upheaval. For decades, pay levels have been defined in relation to the market. We benchmark, then we align.
As a member of the Pay Transparency Alliance, I recently had the opportunity to speak with Kira Marie Peter-Hansen, the Danish MEP who co-led the Directive through the European Parliament. She confirmed that one of the Directive’s main objectives was to move away from the idea of market value. You can listen to that conversation here.
So yes, we can talk about a new frame of reference.
But once we have said that, what does it actually mean in practice? Can the spirit of the law hold its ground against market forces?
Picture this:
The Directive has been transposed into law in your country. You identify a significant gender pay gap within a category of experienced employees that you have just created.
In the old world, you might say, in good faith, that the tech team is mostly male and the support team is mostly female. The market pays the former twice as much as the latter, and there’s nothing you can do about it. But in the new world created by the Directive, you know this is no longer defensible. The law requires you to correct the gap.
So, how do you respond while staying compliant? I can see a few possible scenarios emerging, but all of them are theoretical and uncertain to say the least.
If we stick to our example of tech vs support functions, here are three possibilities:
- Freeze pay rises for tech roles and introduce major increases for support functions. The problem: this is unsustainable from a budget perspective, not to mention the risk of creating negative retention, with employees who suddenly become very highly paid.
- Move towards a midpoint by hiring all future tech employees at a salary level more than 25% lower than before. The problem: no serious developer is going to want to work for you.
- The market spontaneously rebalances around the value of work, leading all businesses to converge towards the midpoint mentioned above. The problem: this is a fantasy scenario that feels almost impossible in a globalised market economy.
In short, I’m still struggling to see what the path forward looks like.
Avoidance and wait-and-see
In the meantime, I continue to see that very few companies are truly ready for the transposition of the Directive.
I’m still hearing from many that they will justify their pay gaps on the basis of market value, or that they’ll create categories based on job families. In other words, exactly what the Directive is trying to challenge.
Others are kicking the can down the road, waiting to see what the law — or even case law — will look like before taking a position.
Either way, these are just avoidance strategies, which show how uncomfortable we still are with this subject.
The worst part is that I understand it. It is incredibly difficult to imagine such a profound challenge to everything we’ve known up until now. To operate without that sacred reference point: market positioning. If I were still in a compensation or HR role, I would probably be taking the same approach: waiting to see how the law, or the courts, will apply the Directive in practice before overturning everything.
I wish I could give you the answer to this equation. But humility forces me to leave you with open questions. The debate needs to continue.
Despite all of these questions, I remain convinced that the Directive is right in principle. The concept of work of equal value forces us to finally get our hands dirty with gender-based pay segregation.
Even if many companies feel they are finding their way in the dark, and even if no one really knows what the long-term outcome will be, we can hope that the Directive delivers a much-needed wake-up call.
To continue the conversation
As usual, I’ve included a selection of resources below to keep the thinking going. Please do send me any articles you’ve found interesting.
This 2021 study is well worth reading if you want to dig further into masculinisation and pay inequality in tech. The authors reach a counterintuitive conclusion: while tech did bring women into better-paid jobs, it ultimately accelerated pay growth above all for men. For me, it is an excellent case study in what the Directive is trying to correct.
Australian researchers used AI to analyse pay gaps across 7,800 employers. They found that company size, sector and women’s representation in senior roles were the strongest predictors of a high gender pay gap. Another finding may surprise you: the companies offering the most flexibility are often also the most unequal.
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