Finnish Company Finds Clever Way to Mantain Gender Pay Gap At 1%

The happiest country in the world, Finland also boasts one of the most gender-equal societies.

UPDATED JUL 3, 2024

Cover image source: Women accounted for 46% of the country’s parliament as of 2023. Getty Images | Photo by Matthias Hangst

Finland has been the happiest country in the world for the last seven years. Apart from strong social protection programs, the country boasts one of the most gender-equal societies in the world. As per a World Economic Forum report, women accounted for 46% of the country’s parliament as of 2023. The country’s push for gender equality goes a long way, as it was one of the first countries to grant women voting rights. Thus, it’s no surprise that Finland has been able to address the gender pay gap.

At Finnish corporations like Framery, which has about 400 employees, the gender gap is about 1%, which is better than most progressive countries. The company manufactures acoustic pods, phone booths, and soundproof private spaces. Talking to CNBC Make It, Anni Hallila, Framery’s head of people and culture, shared three strategies that effectively closed the company’s gender pay.

Representative Image of Dozens of women and men in a rally demanding equal pay | Getty Images | Photo by Spencer Platt

How to Reduce the Gender Pay Gap

1. Frequent Salary Reviews

Framery has a compensation team that does a pay audit twice a year, according to Hallila. The company has its workforce split between two areas, one with roles in manufacturing and the other with people in the office setting.

These routine pay audits account for periodic promotions, raises, and other salary adjustments. This in turn helps the company make sure that no unjust salary differences are created between men and women, Hallila told CNBC Make It.

Representative Image | Unsplash | Photo by Lukas Blazek

Last year, Framery reported a 1% gender pay gap in the manufacturing workforce, with women making 1% more than the average salary of men. Coming to office work, men made roughly 1% more than women on average.

2. Applying the Same Rate of Promotion for Men and Women

Hallila added that the company considers gender equity while advancing employees into new roles or to top managerial levels. “There shouldn’t be a reason why there should be fewer women going toward more demanding roles as men,” she said.

Representative Image | Unsplash | Photo by KOBU Agency

She does acknowledge that Framery’s workforce isn’t equally split by gender. She says men represent a majority, which is about 70% of the company’s workforce. However, the company is faring slightly better when it comes to leadership roles as 38% of the company’s leaders are women. The company has set a target to reach the goal of a 60/40 gender split in the future, but no deadline for the goal has been set so far.

3. Making Salary Gaps Public

Last year, the European Parliament and Council approved the EU Pay Transparency Directive, which mandates all employers in the member countries of the European Union to follow certain compensation practices.

Under the directive which is set to go into effect in 2026, companies are required to publish pay information and their results to ensure gender equity. It also mandates employers to communicate salary ranges to candidates directly or on job ads before the interview stage.

Representative Image | Unsplash | Photo by Money Knack

However, Framery seems to be ahead of the curve as the company already publishes details like its pay ratios between men and women in its annual sustainability reports to the public.

As per Hallila, this practice began in 2022 to make sure people understand that gender equity is important for the company and it is actively working towards ensuring equitable pay for both men and women.