Using EU Pay Transparency to Help Close Gender Pay Gaps - Summit Solutions
This month, we’ve partnered with Turning Point to explore the upcoming EU Pay Transparency Directive and what it means for your reward strategy. It’s a timely read for any HR leader looking to go beyond compliance and build a more equitable, transparent workplace.
The EU Pay Transparency Directive comes into effect in 2026, marking a significant step forward in the drive for gender pay equity.
This regulatory shift is not only a powerful tool for driving corporate accountability, but it should also serve as a strategic guide for organisations to rethink and reshape their reward strategies - not just for compliance, but for true equity.
To meaningfully close gender pay gaps, employers must move beyond just thinking about compliance and, instead, embrace a holistic approach to reward – one that embeds equity, transparency, and inclusivity across the entire employee experience.
Transparency: A Starting Point
Transparency will expose disparities that may have remained hidden, empowering employees to ask important questions and hold organisations accountable.
But disclosure alone doesn’t fix inequity. The question becomes: once pay gaps are visible, what action will you take?
Now is the time to act. With the directive not enforced until 2026, organisations still have the opportunity to proactively design equitable policies and reward strategies - ones that align with their vision, values, and culture while embedding transparency into every layer of total rewards.
Redefine Reward Strategy
A total reward strategy should encompass more than just pay. It should reflect how employees are rewarded, supported, and recognised - financially, professionally, and personally. This means reviewing your entire reward package and Employee Value Proposition (EVP) with fresh eyes.
Key areas to focus on:
- Salary and bonus: Ensure pay is equitable not only within roles, but across functions and departments - this is key to the EU Pay Transparency legislation. Remember that any employee will have the right to access pay data, and you will need to publish salaries of new roles when advertised.
- Benefits: Think about whether your benefits are inclusive and relevant. Do they meet the real, evolving needs of your employees – including flexibility, wellbeing and support?
- Career development and progression: What are your career pathways for advancement? Are they clear, accessible to all, and equitable? Do you have different progression options (e.g. technical specialist vs traditional management route)?
- Recognition: Do you have consistent, fair systems in place? Are they based on clear criteria and applied equitably across the workforce?
Taking a holistic view allows organisations to uncover and address structural issues that contribute to pay gaps - such as uneven access to advancement or inconsistent reward practices.
Why a Holistic Approach Matters
Beyond compliance, a strategic, holistic approach to rewards offers reputational benefits. In a future where transparency is the norm, stakeholders - including employees, candidates, investors, and regulators - will pay close attention to how organisations respond.
A proactive stance today not only ensures readiness for 2026, but also enhances your employer brand, strengthens employee trust, and positions your organisation as a leader in equitable workplace practices.
How to Embed Pay Transparency in Practice
To successfully prepare for the EU Directive and move towards long-term equity and transparency, organisations should focus on four key actions:
- Conduct regular pay equity audits - go beyond gender pay and look at overall equity within your organisation, highlighting any issues you have and areas for improvement to surface and address systemic gaps.
- Review job descriptions and job evaluation frameworks – look at how your organisation creates job descriptions and ensure they are an accurate reflection of the role (not the individual performing the role) and review how you evaluate each role. These need to be standardised to ensure consistency and equality across the company.
- Invest in training, particularly for leaders and managers - it is imperative that they are able to identify and mitigate bias in your reward and recognition processes.
- Foster open communication – communicate with your employees and create an environment which supports open discussions around equity, development, and career opportunities.
In Summary
The EU Pay Transparency Directive should not be seen as a tick-box exercise - it’s a strategic opportunity.
By reviewing reward and recognition holistically, you can build a transparent, equitable and inclusive strategy that enhances talent attraction, retention, and engagement.
Start now. Don’t wait for the legislation to make it mandatory. Build a reward framework that’s not only compliant and helps close pay gaps, but is truly meaningful, competitive, and tailored to your organisation.
By Daniel Hilton, Senior Client Manager, Turning Point
At Summit Events, we create space for forward-thinking HR and reward professionals to engage with the very topics explored here – from regulatory changes to strategic reward design. Our events bring together expert insights, like this piece from Turning Point, with the opportunity to connect, collaborate, and shape the future of work. If you're looking to stay ahead of developments like the EU Pay Transparency Directive, join us at one of our upcoming Summits. Our next event is the 32nd Human Resources Summit taking place in October in Lisbon - register your interest here.