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As a business leader or manager at a small or medium-sized company, it can be challenging to know where to begin or how to take the next steps in developing your company's work on sustainability issues. These issues involve how the company actively and consciously guides its decisions and actions to take responsibility for its environmental impact and social engagement.
Sustainability Work Falling Behind
The tough economic situation has caused smaller companies that are not already actively working on sustainability issues to deprioritize this work even further. This is evident in Svensk Handel's sustainability survey for 2023/2024. The report focuses on companies in the retail sector, which share the common challenge of prioritizing their resources in a more strained economic environment—a trend seen across several industries.
Azets can support companies that want to work more actively with sustainability, and in this post, we show how you can get started with your sustainability efforts with help from the payroll process. Your payroll system and related processes contain information that can provide insights into where your strengths and challenges lie.
A Sustainable Payroll Process – 3 Areas to Start With
Every company’s conditions and opportunities are unique, so start by creating an overview of your current situation. This is also a good opportunity to involve your payroll partner or payroll manager in your sustainability efforts.
1. Equality and Equity
One way to work on sustainability is by ensuring gender equality in the workplace. Equal workplaces are more creative, profitable, and better able to handle crises than those that are not.
An active measure for promoting equality is the annual pay equity analysis. This analysis compiles and analyzes data on wage differences between men and women, with the aim of identifying and addressing unjustified discrepancies, as well as preventing them. When the EU's Transparency Directive is incorporated into Swedish legislation, the requirements regarding pay equity analysis will be expanded, including a reporting requirement to the Equality Ombudsman (DO).
Equality in the workplace also concerns working conditions and job tasks. When men and women perform the same tasks, they typically experience the same work-related challenges. One way to identify unequal working conditions is to analyze sickness rates by gender.
2. Decent Working Conditions
With the help of the payroll system, you can gain an understanding of how sustainable the employees' working conditions are and then follow up to determine whether the measures taken have had the desired effect.
Information such as sick leave, overtime, and vacation time can provide insight into whether employees have a healthy working environment or if interventions may be necessary.
This data can be used to ensure that, as an employer, you meet your obligations in a timely manner (such as providing rehabilitation) and do not exceed any limits (such as allowable overtime). It can also help identify trends and uncover patterns that can guide your interventions effectively. For example, is there a particular department where employees work especially long hours of overtime? Is this sustainable?
Trends in sick leave can provide insights into how employees' well-being is affected by their working conditions. For instance, does the data show if there are periods or events that place extra demands on staff, resulting in subsequent illness? Mental health issues account for more than half of all long-term sick leave, with stress-related illnesses being the most common. From a solution-oriented perspective, companies often have the opportunity to reduce such absenteeism.
Continue monitoring trends to see whether your implemented measures, such as more frequent manager-employee conversations, are improving staff well-being.
Remember to always handle personal health information within the legal boundaries of what is permitted.
3. Proactive Workforce Planning
Recruiting staff is a significant cost for the company, both in terms of money and the effort spent sorting through and interviewing candidates—especially if it later turns out to be a poor hiring decision. High employee turnover means that replacement hiring becomes a form of “maintenance” and makes it more challenging to give the recruitment process the time it needs to find the right person for your company.
Data on upcoming departures and the reasons for them (e.g., age or length of employment) can provide insight into the company’s staff turnover and what actions may be necessary to promote long-term, sustainable workforce planning.
Working with insights into staff turnover can also influence the company’s ability to retain employees, particularly those who are highly sought after in the job market.
Summary
Working on sustainability issues requires companies to perform their own analysis based on their needs and goals. In addition to ensuring that laws are followed and that the employer meets their obligations, there are likely other areas to consider in order to maintain or further strengthen the long-term sustainability of employees. Employees often play a significant role in a company’s operations and are well worth the extra attention.
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