Interview with STEPSTONE for the 31-10-23 Equal Pay Day in Austria.

After working as a human resources manager in the financial industry and managing director and supervisory board chairwoman in the service sector, Martina Ernst with her companies www.SalaryNegotiations.at and www.FairandEqualPAY.com consults professionals and companies on the way to fair and equal pay in line with the corporate culture.

1. Why is the gender pay gap so high in Austria?

Looking at the unadjusted gender pay gap of 36.4% (Statistik Austria 2019), there are three main reasons:
50.5% of women and only just under 11% of men work part-time (2021)
22.4% of women and only 9.3% of all men work in the low-wage sector (2018)
Only 19.2% of all women are in top positions in Austria (World Economic Forum 2020 study)

Even if we adjust for the salary gap and consider only full-time, year-round employees, a gender gap of 12.6% remains in 2022, according to the latest Statistics Austria data.

Why:
Companies that deliberately discriminate against women are hard to come by. But, working mothers suffer from the so-called ‘motherhood penalty’, which leads to the ‘unexplained’ gender pay gap.

Unfortunately, family is still seen as a women’s issue: When two people start out in a job, they initially develop equally; then, at some point, the woman goes on maternity leave and parental leave, and if the salary jumps are not regulated by collective agreements, she often gets back on where she left off.

Women are also increasingly returning to work part-time, and these are mostly jobs that are not as highly valued. If there is a lack of childcare options, this is even true for many years.
Well-paid management positions in part-time or job-sharing are still a scarce commodity.
Women are less likely than men to negotiate their salary or career advancement within the company and are more likely to expect the company to acknowledge their performance and take the first step on their behalf.

2. Why do women still earn less?

Two aspects:

The collective agreements of the male-dominated metal industry versus the female-dominated nursing professions are revealing: it is then, at the latest, that one knows that neither one’s own qualifications nor one’s personal level of responsibility allow for an equally high salary, but that the industry and the negotiating power of the social partners are to a great extent decisive for the salary level.
Women negotiate their salary or career advancement in the company less often than do men and tend to expect the company to acknowledge their performance and take the first step on their behalf.

What can be done about the gender pay gap?

In my view, this question covers three areas:

How and where should companies feel called upon to do something?

Companies should pay female candidates the salary provided based on function, responsibility and performance, even if the woman has asked for less
Companies should implement internal quotas to intentionally bring women into leadership positions
Women should increasingly be able to take on management positions on a part-time basis
Companies should be even more committed to allowing paternity leave – because children are part of life – even if it is logistically a challenge for everyone.

This is only an excerpt of all the possibilities a company can set to create an inclusive work community with fair and equal working conditions and salaries.

Where and how is the policy called for or are legal frameworks required?

Politicians have finally acknowledged in 2023: There is a need for childcare facilities in rural areas, now everyone is still waiting for the concrete implementation.
It would also make sense to introduce pension splitting on a mandatory basis and not on a voluntary basis as has been the case so far.
Policymakers must provide more incentives, to bring young women into the well paid STEM sector, and to raise the salaries of low-paying but high-demand occupations such as care for the elderly.
Income Reports are currently mandatory for companies with 150 or more employees, but have been extremely weak so far – hopefully this will improve in 2026 with the new EU Directive on Pay Transparency and Equal Pay.

What can an individual employee or self-employed person do for him/herself?

Those who demand nothing will be taken by their word and will receive exactly that: NOTHING.

I would like to emphasize four things:

google the market value of your own function/product and get advice from acquaintances and mentors on what they would charge for the job – this reinforces your own self-worth.
Constantly record the added value for the company (above and beyond the normal contract) and discuss it with superiors/contractors at a specially scheduled meeting.
Be well prepared and do not forget that the superiors/contractual partners are often not the decision-makers – so provide good arguments which are also relevant further up in the hierarchy.
Don’t forget: every negotiation between employee and employer or contracting authority is not a fight, it is rather about both sides ending up motivated and continuing to contribute to the success of the company.