Clear pay criteria. Stricter requirements for addressing unjustified pay disparities. And a new way to discuss pay with both candidates and employees. When pay transparency becomes Swedish law, employers will need to take a comprehensive approach to their pay structures. Here’s how the Pay Equity Compass helps you meet the directive’s requirements, step by step.
For many employers, payroll management still relies on cumbersome Excel files, manual processes, and disjointed data—which makes the work both tedious and unreliable. At the same time, the Pay Transparency Directive raises the bar for how pay must be explained and how pay gaps between women and men must be identified and documented.
The Pay Equity Compass in Flex HRM is the tool that helps employers bring everything together—from job architecture and job evaluation to pay surveys, analysis, and reporting—all on a single platform. Instead of separate files and manual processes, you and your team gain a cohesive workflow that makes it easier to meet the new requirements and build a transparent pay structure.
From pay ranges to reporting—what does it take to comply with the directive?
So, what do the new requirements mean in more concrete terms? Linda Tesell, Product Manager at Flex Applications, helps us break down the most important parts of the directive—and how the Pay Equity Compass makes the process easier, step by step.
Articles 5 and 6: A dynamic job architecture—the foundation for fair pay
What the directive requires:
Article 5 gives job seekers the right to information about pay or pay ranges before hiring. Article 6 requires employers to make the basis for pay setting and pay progression clear and accessible to employees. More specifically, this means that the objective and gender-neutral criteria that influence pay—such as responsibility, competence, performance, or experience—must be clearly stated. The purpose is for employees to understand how pay is set and adjusted, and for the employer to be able to demonstrate that pay decisions are based on objective grounds.
But what does the pay range actually depend on? Which roles are comparable? And what distinguishes one level from another? To provide crystal-clear answers to these questions, a holistic approach is needed.
– A transparent salary structure starts with having a clear understanding of your job architecture—that is, how roles, positions, and levels are structured and interrelated. Once you know what distinguishes different roles and levels, it also becomes easier to establish pay ranges, clarify available career paths, and discuss pay in a way that is understandable to both managers and employees,” explains Linda Tesell.
Here’s how the Pay Equity Compass supports this work:
With the the Pay Equity Compass, you can visualize and structure your organization’s roles into job functions, job families, and career bands. Through an objective, factor-based job evaluation, you gain a common yardstick for assessing roles based on factors such as responsibility, requirements, and complexity.
The insights you gain can then be used to:
- develop clear and justifiable salary ranges
- show what distinguishes different roles and levels
- describe possible career paths
- provide candidates with clear information about pay as early as the recruitment stage
- help employees understand how salary and salary progression are evaluated
In short: the Pay Equity Compass makes it easier to build a clear salary structure—and to explain it to both candidates and employees.
Read more: Job Architecture Lays the Foundation for Accurate Pay Equity Compass—Here’s How to Succeed
Articles 9 and 10: Analysis, Reporting, and Documentation
What the directive requires:
Which pay gaps need to be examined more closely? Can they be explained objectively? And is the documentation in place?
Article 9 requires affected employers to regularly report pay gaps between women and men. The reports must show pay gaps (including median pay and variable compensation) as well as the gender distribution by pay quartile—not just base pay and pay levels. The purpose is to highlight patterns that may require further analysis.
Article 10 stipulates that, in certain cases, the employer must conduct a joint pay assessment together with employee representatives, including when an unexplained pay gap exceeds five percent and has not been addressed.
Here’s how the Pay Equity Compass supports this work:
Since personnel and pay data are already available in Flex HRM, the Pay Compass can do the groundwork directly in the system and show:
- differences between groups
- discrepancies at the role level
- where an individual review is needed
- patterns presented as easy-to-understand graphs and charts
– A common challenge is that a lot of time is spent collecting, reconciling, and piecing together data from various sources. When the information is already collected and properly structured in the system, you avoid getting bogged down in this step and can instead focus on understanding what the analysis shows, which differences you may need to address, and how to go about it,” says Linda Tesell.
Once the analysis is complete, the work must also be followed up on and documented clearly. The Pay Equity Compass also helps you:
- document assessments and explanations
- follow up on actions
- develop action plans
- prepare supporting documentation for reporting and in-depth pay assessments in line with the requirements of the Pay Transparency Directive
Article 7: Right to Pay Information
What the directive requires:
What does my pay depend on? Which roles are compared to mine? And how can you, as an employer, explain differences in a clear and objective manner?
Article 7 gives employees the right to request written information about their individual pay level and about the average pay levels—broken down by gender—for employees performing the same or equivalent work.
Here’s how the Pay Equity Compass supports this work:
With the Pay Compass, managers receive concrete decision-making support for new hires, pay reviews, and pay negotiations.
Among other things, you can see:
- the salary range applicable to the role
- how the role has been evaluated
- the principles behind the pay level
- which roles are considered similar or equivalent
In short: it becomes easier to provide employees with clear and consistent answers about pay, with less arbitrariness and well-founded support for each assessment.
Read more: What Salary Should We Offer? How to Make Market Pay and Salary Ranges Part of Your Pay Equity Analysis
Finally: How do you ensure the secure handling of sensitive data?
Where is the supporting documentation? Who has access to it? And how do you ensure that everyone is working with the correct version? Salary analyses contain data that must be handled with the utmost care.
When analysis and documentation take place directly in Flex HRM, there’s less need to transfer personal and payroll data between external systems or keep track of local folders and separate Excel files. This makes the workflow more cohesive and reduces the risk of using incorrect source documents or of sensitive data going astray.
The Pay Equity Compass is hosted in an encrypted cloud environment via Microsoft Azure, with data storage within the EU/EEA. This provides better control over:
- where the data is located
- who has access
- how analyses and assessments are documented
- which documentation is used at each step
In short: fewer manual steps, better traceability, and more secure handling of sensitive data throughout the entire process.
Get started with the Pay Equity Compass
Ready for a smarter way to handle pay surveys and pay transparency? On September 8, we invite you to a free webinar where we’ll demonstrate the workflow live and tell you more about how the tool helps you make your day-to-day work smoother, safer, and more sustainable.>
Please note that this webinar will be held in Swedish.
We warmly welcome your registration!
Curious to learn more about the Pay Equity Compass right now? Contact us, and we’ll tell you more!
