Promoting gender equality and increasing employment through bonuses
The objective is to increase gender equality One of the main focuses of the Employment through Procurement ESF project is to promote employment in the form of special contract terms included in the National Model. At the same time, one of the objectives is to help contracting organisations contribute towards increased gender equality for men and women on the job market and to balance gender disparity within various industries or professions.
Content
To increase gender equality
Additionally, special efforts may be warranted on behalf of foreign-born women with little or no education, in order to improve their ability to enter the job market. One of the ways in which this can be achieved is to specify that target group when setting employment requirements.
Gender equality involves justice, democracy and participation. It assumes equal rights, obligations and opportunities in all areas for both men and women. Including a gender-equality perspective in public procurement means that men, women, girls and boys are all guaranteed equal services and a fair allocation of resources.
EU law stipulates that a systematic gender mainstreaming must occur in all public authorities. 'In all its activities, the Union shall aim to eliminate inequalities, and to promote equality, between men and women.' (Treaty on the Functioning of the European Union, article 8). Gender equality is also one of the UN global goals (number 5) and a part of the Sustainable Development Goals (Agenda 2030).
In order to develop and supplement the provided support, some examples have been compiled for contracting organisations to use in procurement to help suppliers to offer more employment opportunities than is stated in the basic conditions of the contract. These examples also demonstrate the potential that authorities do have to promote gender equality by setting employment requirements.
The examples provide opportunity for:
- More employment commitments within the framework of a certain contract.
- Increased gender equality between men and women within the framework of a certain contract.
- Specifying the 'foreign-born women with little or no education' as a target group.
Foreign-born women with little education are the ones who find it most difficult to establish themselves and gain a foothold in the job market. Special efforts are therefore needed, as can be seen, for example, in a report from the Swedish Work Environment Authority ('Under the Magnifying Glass—Gender Perspective in Work Environment and Work Organisation'), where it is shown that Sweden has one of the most segregated job markets in Western Europe, which is why it is intended to increase equal opportunities for men and women in the job market. The goal is to achieve more equality in the job market by setting requirements in public procurement that take equal opportunities in the job market into consideration, especially in industries where one gender is under-represented.
The basic premise is that special contract terms for promoting employment are complemented with the possibility of gaining bonuses, which makes it an incentive-based remuneration model. Suppliers can thus be encouraged, for example, to employ additional individuals from the target group(s) selected by the contracting organisation, or to increase gender equality by providing jobs or otherwise employing one or more individuals from the gender that is under-represented in the workplace. According to the Discrimination Act, when hiring new workers, employers must take active measures within the framework of their operations to receive applications from the under-represented gender, thereby helping to increase the proportion of those workers. The possibility of awarding bonuses is thereby limited to measures that have resulted in a more even gender distribution and/or internship placements that have contributed to it. For more information about the possibilities in accordance with the Discrimination Act, see section 3.4 below.
Another possibility for promoting gender equality during procurement is to set an award criterion. Award criteria are used to determine the most economically advantageous tender when evaluating the best price-quality ratio. A gender-equality criterion can be designed such that, together with its tender, a supplier must present a solution based on the special contract terms for how gender equality will be promoted when the contract is carried out. The evaluation should take place according to a value-added model and be included when evaluating the 'best price-quality ratio.' Suppliers are given greater latitude, and innovative solutions from the market can thus be rewarded. The requirements should also be connected with a definite ability to follow them up in connection with tender evaluation as well as during the contractual period.
There may, of course, be other possibilities or methods for encouraging gender equality in connection with procurement or during implementation of public contracts. To improve gender equality, requiring new recruitment is also not strictly necessary—there may be other means of achieving the objective, perhaps involving the way the work is organised, training or other skills-development efforts However, within the framework of this project, it has only been possible to develop support for gender equality linked with employment incentives relating to the implementation of a contract.
Some things to keep in mind:
- The same conditions apply to employment or internship placements that are eligible for incentives as to other employment—see pages 7-10 in the Implementation Guide.
- It may be appropriate to specify the maximum number of jobs or internship placements that can qualify for a bonus.
- A bonus is paid only if the basic requirements of the special contract terms are met.
- Suppliers should be free to use whatever solution or method they find appropriate for improving gender equality. In this way, innovative solutions from the market are rewarded and can be granted bonuses as the contract is implemented.
- It may be justified to limit bonus opportunities to contracts where the implementation requires a minimum number of full-time positions, e.g., at least five positions to be filled as part of the contract. In some cases, it may also be warranted to limit bonus opportunities to contracts that last for a minimum length of time, or that reach a certain minimum contract value.
- It may be appropriate to state that special treatment can only continue as long as the supplier has a need. Bonuses will not be paid for actions that contravene the Discrimination Act.
- The remuneration model should be transparent. State, for example, the bonus that will be paid for each position and how time periods are calculated.
- It may be advisable to be in contact early on with the job-matching service during the preparation phase and to obtain support from job-market stakeholders during the market dialogue, in order to find suitable candidates for the contract etc.
- Collaboration between the contracting organisation, supplier, Swedish Public Employment Service etc. can also increase a supplier's ability to recruit individuals from a gender-equality perspective.
The procurement rules (SV) allow contracting organisations to set requirements in support of gender-equality objectives within the contracting organisation itself as well as to achieve national and common EU targets. Contracting organisations are given considerable freedom to design their own procurement contracts to meet their organisational needs. What is more, procurement that contributes to a more socially sustainable society is the seventh policy objective (SV) in the Government's National Procurement Strategy.
In general, conditions are favourable for using procurement to promote gender equality between men and women in the job market. It is also stated in the EU-wide procurement directives that special efforts may be directed towards strengthening the integration of particularly vulnerable groups and female labour force participation. But, regardless of the legal situation, there may be practical obstacles, such as matching individuals from the under-represented gender with a position in connection with the implementation of a certain contract, which means that procurement is not always an appropriate tool to use.
Using public procurement to achieve societal goals is explicitly allowed under EU law, and the Procurement Directive from 2014 further strengthened that possibility. This can be seen, for example, in a guide from the European Commission on socially responsible procurement (Buying Social (COM (2011) 1258))—that contracting authorities may decide on a case-by-case basis which social considerations are relevant to any particular procurement, based on the subject matter of the contract and the existing objectives.
The following 'employment opportunities' are mentioned in the guide as being relevant to procurement, for example:
- Promotion of youth employment.
- Promotion of gender balance (e.g. work/life balance, fighting against sectoral and occupational segregation, etc.).
- Diversity policies and employment opportunities for persons from disadvantaged groups (e.g. migrant workers, ethnic minorities, religious minorities, people with low educational attainment etc.).
The guide also provides an example from Basque Country in Spain, where a contracting organisation set requirements regarding the integration and employment of, amongst other people, 'long-term unemployed women over 30'.
Regardless of whether the procurement rules offer favourable conditions for promoting gender equality, the Discrimination Act (2008:567) must be considered. According to the Discrimination Act, it is generally considered discriminatory to give special treatment to persons of a certain gender in employment, and this applies to recruitment for paid employment as well as internship.
Chapter 2, section 1 of the Discrimination Act states, amongst other things, that:
An employer may not discriminate against a person who, with respect to the employer:
- is an employee,
- is enquiring about or applying for work,
- is applying for or carrying out a traineeship, or
- is available to perform work or is performing work as temporary or borrowed labour.
However, the Discrimination act allows for exceptions under certain conditions for employers to give special treatment with regards to gender.
Chapter 2, section 2 of the Discrimination Act states that the prohibition in section 1 does not preclude 'measures that contribute to efforts to promote equality between women and men and that concern matters other than pay or other terms of employment.' If there is essentially no even distribution between men and women in a particular type of work, or within a certain employee category, employers must take steps to encourage applications from the under-represented gender when hiring new workers, thereby helping to increase the proportion of those workers.
It is stated in Chapter 3, section 4 of the Discrimination Act that employers must take active measures within the framework of their operations, and, according to section 8, employers must promote an even gender distribution in different types of work and in different employee categories, as well as positions of responsibility. In other words, the requirement for active measures does not apply solely to recruitment efforts.
According to the Discrimination Act, it may be permissible under certain circumstances to give special treatment in employment, but only with regards to gender. This means that an employer may be allowed to give preference to individuals of the under-represented gender when making employment decisions, if, for example, there are fewer women than men in a given job. Similarly, it may be permissible for an employer to give preference to individuals from an under-represented gender when making decisions relating to skills development or promotion. However, special treatment may never involve salary or other terms and conditions of employment.
The concept of special treatment generally involves measures taken to give preference, advantages or benefits to disadvantaged or under-represented groups in order to achieve gender equality or provide equal opportunities for persons in that group in practice.
Special treatment is possible under EU law. Both the Race Equality Directive (2000/43/EC) and the Employment Equality Framework Directive (2000/78/EC) contain provisions that allow for deviations from the principle of equal treatment, and for member states to adopt the laws or regulations needed to address gender inequality. But, in order for special treatment to be permissible, the measure must be taken with due respect for the restrictions settled by the European Court of Justice. Amongst other things, this means that:
- Special treatment may be used when two individuals have the same or very similar qualifications. If there is a significant difference between the qualifications of two individuals, special treatment is not permitted.
- Special treatment may not mean that a person's gender is automatically or unconditionally decisive. An objective overall assessment must be made of things such as all the merits of a job applicant. For example, it may not be stated in an advertisement or similar that a position is open only to women or to men, or that certain others are discouraged from applying (ref. European Court of Justice case no. C-54/07, Centrum voor gelijkheid van kansen en voor racismebestrijding v Firma Feryn NV).
- Special treatment must be proportionate to the purpose of the measure. The measure should therefore not continue longer than necessary. If the objective—such as having a certain proportion of the workforce being a particular gender—has been almost reached, then special treatment should be used with caution.
According to the Discrimination Act, employers are required to take active measures within the framework of their operations to promote an even gender distribution. The regulations do not, however, state what measures should be taken. But employers should follow up and evaluate the measures that have been taken.
Those who have employed 25 or more workers from the start of the calendar year are required to document all of their active measures in writing throughout the year. Where between 10 and 24 people are employed, the salary survey and how the obligation of cooperation has been satisfied for the salary survey must be documented. Nevertheless, there is nothing preventing employers that are not required to submit documentation from coming to an agreement with employees to document their active measures. Employers that are exempted from the documentation requirement are still obligated to take active measures to promote equal rights and opportunities at work. (Government Bill 2015/16:135, Ett övergripande ramverk för aktiva åtgärder i syfte att främja lika rättigheter och möjligheter [A general framework for active measures aiming to promote equal rights and opportunities])
Bonus/incentive-based remuneration models
An important benchmark for an effective agreement is that both parties should feel they are achieving the same objectives, are getting the desired quality and that suppliers have been given the best possible prerequisites for delivering the highest possible quality to the public sector.
One form of incentive is to offer bonuses to suppliers—that is, a supplement to their usual compensation for carrying out their assignments—if the supplier fulfils certain stated targets or tasks as specified in advance in the special contract terms. A bonus system may lead to increased expenditure for the contracting organisation and should therefore be used as part of a strategic approach, for example to reduce benefits costs.
Bonuses or incentives in connection with requirements for encouraging employment could mean that suppliers undertake to employ or provide internship placements to more individuals than covered by the contract. Or a supplier may undertake to employ people from a specific target group or from the gender that is under-represented in relation to employees at the workplace in question, for a certain type of work or within a particular employee category. There are no inherent barriers to including such special contract terms if they are transparent and clear, stated in advance, are non-discriminatory, proportionate, connected with the object of procurement and if the contracting organisation can definitely follow up and review the requirements.
In addition to the legal prerequisites, the market conditions and suitability for a particular procurement should also be considered. This is essential in order for suppliers to be interested in the contract and for them to be able to submit competitive tenders.
A bonus system can be part of a contract's remuneration model and be used to encourage progress or improvements in specially designated areas or 'success factors' in the implementation of a contract. Bonuses are often less restrictive of competition and more flexible than special contract terms. They can be based on the supplier's own solutions, but also need to be predictable and measurable. However, bonus systems that encourage special treatment for individuals from the under-represented gender should not continue longer than necessary, so as to avoid contravening the Discrimination Act. Suppliers and the contracting organisation should regularly follow up implemented measures and achieved results, and the special contract terms need to include such provisions.
The basic idea that a bonus should be a motivation for positive development, and that suppliers should be able to take on additional tasks or implement changes and improvements. For this reason, bonus programmes or special contract terms for improving gender equality need to be based on the circumstances of the suppliers and take advantage of the 'creativity of the market'. Market dialogue in various forms is therefore important during the preparation phase in order to understand the market conditions, the gender equality situation in the relevant industry and individual companies, and to work actively to increase interest in and opportunities to participate in the procurement.
Incentives also need to be strong enough to be a motivation to suppliers. If the incentive levels are not set correctly, suppliers might abstain because 'it does not pay.'
It should also not be possible to speculate on a balance between bonuses and penalties. The design of the bonus system needs to be calculable, such as in the form of basic requirements or minimum requirements in combination with incentives for commitments over the minimum level. If the minimum requirements are not met, penalties may come into play.
In order to be able to determine and assess whether a supplier has taken a certain measure for which a bonus can be granted, it is important to follow up the agreement regularly. The follow-up can be done in collaboration with different parties so as to give the contracting organisation better insight into what happens during the contractual period.
In its government assignment report on employment requirements (Report 2015:57193), the Swedish Transport Administration writes that incentives are generally considered easier to work with than penalties and are especially preferred by representatives of small and medium-sized enterprises.
Incentives are assessed to put small and medium-sized enterprises at less of a disadvantage. Healthy competition can thereby be maintained. The effects on employment are considered to be positive, since experience shows that suppliers are good at taking advantage of incentives based on compensation. According to the report, the industry views bonuses positively.
The Swedish Transport Administration's bonus programme has also included bonuses for employment positions or internship placements created by suppliers themselves, as well as quality improvements for maintenance and repairs etc.
Special contract terms involving bonuses for increased employment and gender equality
Examples of special contract terms (supplemently)
Within the framework of carrying out the contract in question, there are opportunities for awarding bonuses if a supplier takes extra measures to create employment in addition to the basic obligation set in the special contract terms.
Suppliers are awarded bonuses if more people from the specified target group(s) are given employment in the form of paid positions or internship. Bonuses can be awarded for the maximum number of positions according to the table below (and up to the maximum amount shown).
| Type of position | Maximum number of positions in the contract for which bonuses can be awarded | Bonus per position |
| Internship | [Quantity] | [Amount] SEK |
| Paid employment | [Quantity] | [Amount] SEK |
a.) Gender-equality measures as basic requirements in the special contract terms. This could, for example, involve special treatment in connection with the recruitment of one or more individuals from the gender that is under-represented with the employer (awards bonus x 1).
Examples of special contract terms (supplemently)
The contracting authority wishes to encourage suppliers to take active measures to promote an even gender distribution and to increase gender equality in connection with implementation of the contract. Within the framework of carrying out the contract in question, the supplier is awarded bonuses if it takes these measures when fulfilling its obligations in the special contract terms.
Measures taken to improve gender equality during implementation of the contract mean that employment is offered to one or more individuals from the under-represented gender (within the supplier's operations). These individuals must come from the specified target group and have the same or very similar qualifications. The rest of the special contract terms also apply to this employment.
Bonuses are awarded for all, or up to a maximum number of, individuals (as shown in the table below) who are employed within the framework of the special contract terms, depending on the gender distribution of persons with comparable jobs within the supplier's operations.
Special treatment respecting gender in connection with recruitment can continue only as long as there is a need with the supplier—that is, that there is an uneven gender distribution in the supplier's operations. Bonuses are not awarded for measures contrary to the Discrimination Act.
| Type of position | Maximum number of positions in the contract for which bonuses can be awarded for gender-equality measures | Bonus per position |
| Internship | [Quantity] | [Amount] SEK |
| Paid employment | [Quantity] | [Amount] SEK |
a.) Measures taken to improve gender equality when individuals in addition to those required in the special contract terms are given employment, and special treatment of one or more individuals from the gender that is under-represented with the employer in connection with recruitment (awards bonus x 2)
The contracting authority wishes to encourage suppliers to take active measures to promote an even gender distribution and to increase gender equality in connection with implementation of the contract. Within the framework of implementing the contract in question, bonus payments are possible if a supplier takes both gender-equality measures and extra measures to create employment in addition to the basic obligation set in the special contract terms.
Employment measures for which bonuses are awarded require that more people from the specified target group(s) are given employment in the form of paid positions or internship. Bonuses can be awarded for the maximum number of positions according to the table below (and up to the maximum amount shown).
Gender-equality measures for which bonuses are awarded require that one or more individuals from the under-represented gender within the supplier's operations are employed during the implementation of the contract. These individuals must come from the specified target group and have the same or very similar qualifications. The rest of the special contract terms also apply to this employment.
Bonuses are awarded for all or up to a maximum number of individuals (as shown in the table below) who are employed within the framework of the special contract terms, depending on the gender distribution of persons with comparable jobs within the supplier's operations.
Special treatment with regards to gender in connection with recruitment can continue only as long as there is a need with the supplier. Bonuses are not awarded for measures contrary to the Discrimination Act.
| Type of position | Maximum number of positions in the contract for which bonuses can be awarded | Bonus per position |
| Internship | [Quantity] | [Amount] SEK |
| Paid employment | [Quantity] | [Amount] SEK |
| Type of position | Maximum number of positions in the contract for which bonuses can be awarded for gender-equality measures | Bonus per position |
| Internship | [Quantity] | [Amount] SEK |
| Paid employment | [Quantity] | [Amount] SEK |
Award criterion with value-added model for gender-equality measures.
Example of how an evaluation model can be designed
The contracting authority aims to improve gender equality in connection with implementation of the contract and wishes to encourage suppliers to take active measures to promote an even gender distribution and to increase gender equality. For this procurement, the contracting authority will assign added value to suppliers that present in their tenders a description of the measures it intends to take in order to achieve an even gender distribution so that more individuals from the under-represented gender are employed within the operation that will carry out the contract.
[The contracting authority] will assess the measures that a supplier intends to implement in order to promote or maintain an even gender distribution in connection with the employment incentive measures set out in the special contract terms.
In its tender, the supplier must include a description of how it will meet the stated target for an even gender distribution, the methods that will be used and how it plans to implement them, and the result that can be achieved. Those who are offered employment must come from the specified target group and have the same or very similar qualifications.
The description will be used as the basis for evaluation. Added value will be assigned to whatever [the contracting authority] considers to be success factors for achieving the objectives (even gender distribution and that the under-represented gender should be offered employment), such as:
- The extent to which the stated methods are deemed to lead to achievement of objectives
- The extent to which the intended implementation is deemed to lead to achievement of objectives
- The extent to which the intended implementation is deemed to lead to a result as described
The description is rated as added value and a price reduction is assigned, for example, according to the following scale.
3 points. The supplier demonstrates a very clear understanding of the implementation and crucial success factors. [Amount SEK],
2 points. The supplier demonstrates a clear understanding of the implementation and crucial success factors. [Amount SEK],
1 point. The supplier demonstrates some understanding of the implementation and crucial success factors. [Amount SEK],
0 points. The supplier demonstrates little understanding of the implementation and crucial success factors. [0 SEK]
[The contracting authority] will assess tenders according to the best price-quality ratio and evaluate the bids through the application of a value-added model. The evaluation criterion is reviewed and assigned an added value in SEK (in accordance with the scoring system). The added value is thereafter subtracted from the supplier's stated total price. The result is designated the tender evaluation sum. The tender with the lowest evaluation sum is the most economically advantageous.