How the upcoming pay regulations can boost your reputation as a great employer
We hot-desk in open plan spaces. We write our ugly first drafts on shared drives, where anyone can see them. We welcome 360 feedback and urge senior leaders to show vulnerability. But even in the most open and friendly cultures, we still play our payslips very close to our chests.
The EU’s pay transparency directive – which we’ll start seeing in action in 2026 – is a big win for those who champion the ‘equal pay for equal work’ philosophy that lies behind it. But it’s also a big worry for many businesses, nervously considering both the process and the potential fall-out. And it’s not just Europe that’s ripping the wraps off our pay. Some US states have introduced similar initiatives, and lawmakers elsewhere are also considering following suit.
It’s also rather popular with employees, which, in our world of ‘work from anywhere’, is making global businesses sit up and eye developments with interest. Could such transparency herald an important opportunity to prove that fairness for everyone is among their most heartfelt values? Could this mountain of work and minefield of sensitivity actually become a very clear pathway to taking diversity, inclusion, equality and belonging pledges off the wall and into the working world?
Beyond the how
The practicalities of preparing for the new rules are no mean feat. Different European governments may choose to bolster the basic requirements with additional reporting criteria of their own.
Although this isn’t the place to lay out an exhaustive action plan for data-gathering, it’s worth a quick bird’s eye view. You’ll certainly need to standardise your role architecture across territories, shore it up with detailed and comprehensive job descriptions, and develop an established method for sharing pay gaps.
Your recruitment ads will have to comply; no more making offers depending on an applicant’s current salary. Instead, each ad will need to indicate a clear salary band.
With all that work ahead, it’s easy to get hung up on the how.
But this is big. The emotionally-charged subject of money is inevitably being dragged out of the shadows. Small wonder that clued-up communications teams are asking how they can comply, without triggering a cascade of cash-related bad feeling throughout their boardrooms, offices and shop floors.
Shaping your unique advantage
We’re reframing the whole question, working with clients to shape those pay transparency requirements into a positive advantage for the business. Because by embracing what your competitors may see as a troublesome piece of bureaucracy, you get a shining opportunity to prove to employees, talent and investors that you boast a progressive culture based on equity, fairness and merit.
No matter how strong your diversity, inclusion, equality and belonging strategy, getting actively stuck in to pay transparency is concrete proof that you’re walking the walk.
But you can’t do it overnight and you can’t just blow some communications fairy dust over it and expect magic.
A human focus
Maybe you’re well on the way to nailing those numbers. Maybe your HR systems and processes are already optimised to generate the information you need. It’s a great flying start – but this battle isn’t going to be won or lost in the weeds of methodology and analysis.
Because, with all due respect to your sterling prep work behind the scenes, no-one cares.
What your people care about is what it means for them. In brief, they care about why the business is moving to transparency (clue: ‘because the law says we have to’ isn’t an engagement-winning slogan) and what it means for them. Will transparency bring a tangle of new red tape and less autonomy when it comes to rewarding individuals? Or will it herald a rise in both pay and opportunity across the board? Will people thrive or feel exposed by the new spirit of openness? What about people managers? As the first line of defence when an employee has a question, they’ll need to be clued up enough about their role and the overall objectives to field tricky questions.
Equally, you’ll want to avoid drowning your HR team in tickets and queries – and that will take careful communication, clear enough and personalised enough for your people to read, understand and feel reassured by.
Regardless of where you are on that journey, it’s more time-consuming than you think to make sure your culture is ready, your leaders aligned, your managers trained and your messages honed.
Yes, it’s complex terrain. But by working collaboratively and mapping a path based on fairness and openness, you can turn an obligation into a success.
It starts with never forgetting that pay is a sensitive topic, coupled with an unswerving focus on your objectives.
We don’t have the space here to detail our entire approach, but let’s take a look at five of the key steps and run through a few of the questions we ask our clients:
1. Get clear on outcomes
It’s a controversial take but, in the beginning, the actual numbers that your pay analysis eventually spits out aren’t really the challenge.
Every business has to start somewhere, and whether you uncover deep chasms that need to be bridged, or an organisation broadly on track as a gleaming beacon of equality, what’s really important is how you deal with it.
For some, pay transparency will be a non-event. For others, it’s likely to be a big deal. Managing this effectively relies on understanding where those different impacts will land – and tailoring your communication accordingly.
Agree your objectives upfront and be consistently concise, relevant and collaborative. How do you want people to feel? What are the important things for different audiences to understand? If the figures reveal issues, discuss them honestly and openly – and be clear about what you’re going to do to put them right.
Then, keep those objectives front of mind at all times.
2. Align your values
Now’s the time to use the incoming legislation to shore up your broader values around fair pay and ongoing reward strategies.
Does your current pay and reward situation reflect the principles you live and work by? Is anything out of whack? Is it time to reevaluate the organisation’s thinking around transparency?
This is an irresistible opportunity to either shift or promote your company’s thinking around transparency. If you’re deafeningly silent about pay strategy until 2026 and then suddenly claim you’ve always been committed to openness, you’ll look ridiculous.
Draw a clear line between the upcoming requirements and how they relate to your existing values around diversity, equity and inclusion. Link in any related initiatives you’re already committed to. Map out a vision that fits your culture and which your people can get behind.
3. Understand your audiences
Within that big-picture vision for a fairer and more equitable future, you’ll need to shape the details collaboratively. That calls for a deep understanding of what your people need and want.
How complex this looks depends on a whole host of factors, including your business’s structure, the territories you operate in (and any resulting cultural differences), and your existing culture.
Every organisation is unique, and audience segmentation is something we consider in detail. But whatever the right way of cutting the cake in your business – segmenting by location, job function, banding, etc – you need to anticipate negativity and plan ways to mitigate it.
Building engaging messages and hitting the right tone can only come through real conversations, honest insight and genuine empathy.
4. Shape your campaign carefully
Talking about pay transparency is much more than window dressing. You’re tackling a topic that’s embedded in your business’s overarching principles and beliefs – and which will be under public scrutiny.
Even when you’ve got your stakeholders over that hurdle, you need to make alterations for regional legislation and cultural differences. And you need to design messaging that’s relevant, thoughtful and sensitive to all your audience segments, including talent you haven’t yet considered hiring.
It will take genuine, consistent commitment to the principles you agree. You need your leaders to be aligned and enthusiastic, reiterating and living the messages. You need time to train managers to support their teams through the changes and tackle difficult conversations. And you may need to shift the culture within your organisation to embrace a new way of thinking.
Only with the deep understanding of your people can you sift through the competing priorities and shape conversations that genuinely engage. That doesn’t mean pages of data analysis – it means dialogue that acknowledges issues and pledges meaningful action.
What do your people really want to know? Which elements are helpful for them to understand? What’s useful information to your talent attraction team but bamboozling nonsense to engineers or designers? (Don’t bombard people with information just because it’s there: if they don’t care, don’t share.)
5. Stay open
Committing to openness might be an uphill battle in some organisations. So, once you’ve invited suggestions, won people over, and co-created a vision that feels compelling, cling on relentlessly and don’t let the momentum slide. Find opportunities to continuously reinforce your collective commitment to transparency and fairness – because that’s what’s going to make these great intentions stick.
Create feedback mechanisms that won’t be ignored or forgotten. Promote them, incentivise comment and take action as a result. Analyse how your work around pay transparency influences trust, engagement and retention within your organisation. And discuss progress authentically, honestly and collaboratively.
If you’re already travelling towards true openness, the upcoming regulations will give you a helpful following wind. If minds have been closed until now, they could provide the nudge that makes the difference. Either way, handled right, pay transparency could be a game-changer for the way your business shows up for your employees.
Ready to get ahead in the move to pay transparency? Keen to understand how it could become a vital value in your organisation? Looking for support to navigate the choppy emotional waters of money and equality? Let’s talk.
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