Predictive analysis of organisational costs to achieve gender pay equity

Abstract: The gender pay gap has been a hot topic during the last decade and legislation regarding pay equity is increasing in Europe. Continuous work with gender pay equity is essential to avoid costly consequences. There are methods today to find unsubstantiated pay differences, but how could one predict the cost of fixing the pay gap? How can the one predict the cost of making an unequal pay structure equal? How may pay equity methods be explained to people not well-versed in mathematical reasoning? To investigate these questions, the study uses literature, simulations in Python, and a workshop to gather empirical data. Simulation is used to analyse different methods of closing the gender pay gap. The workshop was held at the pay equity SaaS company Pihr. Results suggest several methods to close the gender pay gap that vary in cost and perceived fairness. One can never be absolutely certain of the presence or absenceof gender discrimination, but one can make well-informed estimates using different methods of analysis. The results also suggest that pay equity methods should be explained using informal, non-mathematical words, with examples connected to real-world scenarios in a familiar context for the learner.