10 steps to pay transparency
13th May 2025
Julia Hanna
Sam’s blog on the brilliance of pay transparency caught lots of attention.
She outlined the case for pay transparency: it’s the right thing to do, it has positive impacts on both engagement and pay gaps, and employees expect it.
The aim is to help everyone see more clearly how pay and reward are managed, allowing current and prospective employees to understand how and why decisions are made, and managers to be clear and consistent in their approach.
And of course, if you’re either in the EU, or based in the UK with more than 100 employees based in EU member states, the EU Pay transparency directive is coming your way soon.
In any event, further UK legislation is in the wings and, employers may need to align with the EU regulations anyway to remain competitive.
So how ‘pay transparency ready’ is your organisation?
As part of our series of ‘Top 10’ blogs celebrating our tenth anniversary, we have compiled a ten-point checklist to help determine the current state of your offering and the next steps you should take:
1. Pay principles
Is there a clear set of pay principles that align with organisational strategy and culture? Does it articulate aspired market position and the factors that will influence pay, such as skills, performance or contribution? Is it openly shared with employees?
2. Career levels
Do you have a clear job architecture framework of internal career levels or grades? Do employees understand where their role sits in the organisation and why? Is the framework free from bias and does it use gender-neutral language?
3. Pay benchmarking
Do you conduct external pay benchmarking to ensure you’re paying competitively? Is the benchmarking data you use reliable, valid and up to date?
4. Pay structure
Is there a simple and transparent pay structure? If you’re using raw market data, can it be combined into a pay structure to reduce inherent bias and improve internal equity?
5. Transparent pay ranges
Are pay ranges shared internally and on job adverts so everyone knows what to expect? Have you removed the outdated question of ‘current salary’ from all hiring conversations?
6. Pay decisions
Are all hiring, promotion and pay review decisions made in line with your principles and pay structure? Do you look across the organisation for wider impact rather than making decisions in isolation?
7. Communications & training
Are there clear employee communications and manager training in place on pay decisions? Are pay and equity conversations embedded in all people processes?
8. Equal pay audits
Are equal pay audits, conducted regularly, with gaps greater than five per cent investigated and action taken? The EU Directive specifically entitles employees to request information about the pay of others performing equal work or work of equal value. So, it’s best to understand your data ahead of time, especially as the burden of proof will lie with the employer.
9. Pay gap reporting
Has gender pay gap reporting been widened to include ethnicity, disability, social mobility etc where there is sufficient data? Is declaration integrated into your onboarding process? Have steps been taken to encourage declaration rates?
Whilst, it’s voluntary in the UK at the moment, legislation will be here sooner than you think. The draft Equality (Race and Disability) Bill plans to extend reporting to cover ethnicity and in Northern Ireland, the Department for Communities consultation set out plans to include statistics on workers within each pay band by ethnicity and disability.
10. Senior engagement
Are the senior team engaged and prepared to invest to ensure all employees are in the right position on the pay range compared to their peers?
It’s not unusual to have some of these things in place, but gaps elsewhere. Or maybe you don’t have a coherent approach that brings all good reward practice together under the pay equity umbrella. But crucially, the part that is often missing is what’s at the heart of things: transparency.
Being confident enough in your approach to pay to share it with your employees will ensure decisions pass scrutiny and create a culture for your talent to thrive.
How we can help
At Verditer, we are specialists in creating a transparent approach to pay and reward. Do get in touch if you’d like our help with developing a reward strategy, or creating pay foundations such as career levels and pay structures.
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Related Insights
The brilliance of pay transparency
Pay transparency is a priority for many organisations. Sam's blog asks if this is for the right reasons.
Ten blogs to celebrate a decade – welcome to our Anniversary Series
What is 'Verditer'? And what reward insights are we sharing as part of our anniversary series?. Read on.
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