Closing the unexplained pay gap
Background
Nokia has a long-time commitment to inclusion and diversity and has continued to make this a key business priority. Nokia’s customers measure and evaluate their suppliers’ actions on inclusion and diversity and insist on seeing their vendors not just speak to the subject, but show evidence of specific actions designed to help mitigate inclusion and diversity challenges. In addition, our Nokia shareholders are also committed to changing and improving the landscape for women, the LGBT+ community, as well as other diverse groups.
What did you want to achieve?
Nokia wants to strengthen its ability to attract and retain great people and bring the diverse perspectives needed to succeed in our business. We also want to show that we are ready to invest in our fight for inclusivity and to set an example for the tech industry.
What did you do?
In 2019, Nokia conducted a pay gap analysis together with a human resources consulting firm. It revealed a small, but statistically significant, unexplained pay gap at Nokia. This gap represented the difference in salary between male and female workers once factors that drive pay at Nokia, such as job grade, experience, performance and location are considered.
Nokia allocated a special budget to close this unexplained pay gap and made the necessary adjustments to the compensation of impacted employees at one go. While the majority of beneficiaries of the pay increases were women, the research uncovered some unexplained pay gaps for men as well, which were also addressed. Read more in Nokia’s blog.
What have you learned?
This experience and analysis provided actionable data on our compensation. Nokia is committed to ensure that what was once closed continues to stay closed. This unexplained pay gap review is now done yearly and reported in Nokia’s People and Planet report.
We also learned that, along with our continuing focus on individual accountability, including the expectation that our leaders and managers continue improvements in the area of inclusion and diversity, Nokia as a company must also look at its overall practices and policies that may have an impact on our progress towards full inclusivity.
Lastly, we also realized that keeping the unexplained pay gap closed and avoid reverting back, requires additional actions:
- We take proactive steps to help ensure inclusive candidate lists when hiring
- We stopped asking external candidates for their compensation history – also in countries where it’s still allowed – to ensure we do not inherit any pay gap when recruiting. If the information is offered, we consciously do not let it influence our decision making.
- We ensure that salaries offered to women candidates are in line with the role and others in the same job.
- We continue to ensure that women can progress in their careers and that their performance is evaluated objectively.
- Nokia has trained its leaders on recognizing and mitigating their bias since 2013 and continue to do so on a regular basis. In 2020, all Nokia leaders go through a 2-hour Navigation Bias with Inclusion training.
