It's all about trust

Feb 04, 2025 10:24 am

Hi,

how are you? I hope that your 2025 is off to a good start!

I have two events to share for next week:

Join me on Tuesday, Feb 11 at 11am EST/5pm CET for the webinar Payroll Pitfalls across Borders.It's free to join.
And if you're in Belgium, I'll be speaking at the HRM Overheid event in Gent on Thursday, Feb 13 about the 5 priorities for HR Success in the Future of Work.

What is the Future of Pay?

My 2025 started slow. Which gave me time to think about this year's topic of research. The question that has been going through my mind is:

Work is changing rapidly. What about pay?

I started to think about this while writing the second edition of my book How to Select Your Next Payroll. A new chapter on automation and AI was long overdue. When that was done, I decided to reread and update the whole book. Which got me thinking about the Future of Pay. Then I noticed a conversation on Linkedin about the many EoR vendors that came to market, and how hard it is to distinguish between them. More on that in my next Paying People newsletter.

Anyway, with so much focus on the compensation side of the employer/employee relationship, I started to wonder what the new world of work means for the way we compensate people. Will it change? And if so, how? In five years time, will the majority of people still earn a salary? Will we have reached AGI and all receive Universal Basic Income instead?

So that's the topic I will focus on this year. If you have ideas, or maybe even a question I should pursue, know someone who is doing something interesting on this topic to create the Future of Pay, hit Reply and send me a note. Thanks!

Now onto the two topics of this newsletter: the EU AI Act and Why Trust in Employers is Down.

The European AI Act is here

Did you miss the first deadline of the EU AI Act? On February 2, 2025, new AI regulations officially kicked in. If you’re in HR, this isn’t just another compliance update: the law changes how AI can (and can’t) be used in people decisions.

Some AI practices are now banned:

- Social scoring systems

- AI that manipulates human decisions unfairly (e.g. nudging people to do something)

- Emotion inference in workplaces and educational settings

- Biometric data collection revealing sensitive personal characteristics (ethnicity, religion, etc.)

You should perform a careful inventory of your HR solutions to ensure they are clean of these practices. Don't forget to reach out to your vendor and ask for their AI transparency report. Also verify that their policies are compliant with the EU AI Act.

And providing AI Literacy is now mandatory. All staff who use AI systems must have a sufficient level of AI literacy. You must train your employees to raise awareness of AI risks, compliance and policies. And with AI becoming more pervasive, this likely includes all staff.

There is no direct penalty for non-compliance with the AI literacy clause, but if you get a penalty for an AI violation, not having a training program in place could influence the fine. EU countries have until August 2, 2025 to set up national enforcement institutes, and you should use this period to address potential compliance gaps.

This goes beyond legal risk—it's about building trust! And that brings us to the second topic of the newsletter.

Trust: We must do better!

When I started to write this newsletter in January, I did not realize what an outsized role Trust would play on the world stage. You only have to look at the global events of this weekend to understand how fragile trust is. In the Netherlands, we have this saying: "Trust comes on foot, and goes on horseback." It means that trust is slow to build, while you can lose it in an instant. And when it's gone, it takes a long time to rebuild, and it never will be quite the same as before.

The newly-released Edelman Trust Barometer focuses on a “crisis of grievance”. It’s a slightly unsettling reading. I've followed the report for years, and one thing always stood out: people trusted their employer to do what is right. They trusted their workplace over the government and other institutions. And that number kept rising over the years. In a turbulent world, employees looked at their employers to provide stability. But suddenly, that has changed.

The number of employees that think that "business leaders purposely mislead people by saying things that are false or gross exaggerations" is rising, and it's now at the same level of government leaders. And most concerning, only 36% of people think the next generation will be better off, and that falls to only 20% for the most developed countries.

61% of people hold the grievance that business and government serve a select few. Respondents think the system favors the rich, and the rich are getting richer as a result. And that feeling is shared across the globe. With greater grievance also comes more suspicion of AI and more belief in politics as a zero-sum game.

Is there anything we can do about this?

Fortunately, the report offers some clues to turn this around. People with the highest level of grievances say that to ensure a better future, business must:

provide good-paying jobs in local communities
train or reskill employee to be competitive

Employees also demand much more action from businesses on topics like climate change, discrimination, affordability, reskilling and misinformation. And they look at the CEO to take action. That includes nurturing workplace civility, and facilitating discussions about contentious issues.

I recommend that you download and read the report. And then think hard about your own company: how would you score? What do your employees really think about your leadership and company? Do they trust you?

If you like to learn more about trust, watch the keynotes from Rachel Botsman, who has studied Trust for years and even wrote books about it. She provides some fascinating insights on the topic with good examples.

Hope you enjoyed the newsletter!

Have a great day, Anita

How to get in touch with me

My newsletter is free: please think of me when you need an engaging and insightful keynote or workshop!

Support me by buying my books Equal Pay for Equal Work and How to Select Your Next Payroll. Or get the Dutch translation Gelijk werk? Gelijk loon!