In 2019, something unusual happened in Brussels. There was suddenly a consensus: the gender pay gap wasn’t going to close on its own, and the European Commission was urged to take action. The #MeToo movement a few years earlier had shifted how we talk about power structures, the pandemic exposed inequalities in healthcare — a sector dominated by women — and a new generation with entirely different expectations around fairness and transparency entered the workforce. Public attitudes toward pay equity had changed, making the political landscape more open to reform.
Fair pay through transparency – building a stronger employer brand
These developments laid the foundation for the European Parliament’s 2023 vote to adopt the EU Pay Transparency Directive. What we’re seeing is a broader shift: pay is no longer viewed as an internal HR issue, but as a reflection of larger societal structures.
The directive is not just about mandatory reporting — it serves as a mechanism to ensure we are on the right track. It’s also a reminder that fairness doesn’t happen by default; it must be actively built.
However, there seems to be a gap between how prepared employers and employees are. According to our latest survey 50% of global organizations, including those in the EU, are not prepared for the pay transparency regulations set to be implemented by 2026.
At the same time, more and more young professionals are ready for transparency. Across social platforms, from LinkedIn to TikTok, they are sharing salary information to highlight inequalities and offer tips on how to negotiate pay. A large part of the workforce is already aligned with the level of transparency the directive will require — and employers will need to find intuitive, clear ways to present pay data to attract and retain young talent.
One of the lead negotiators behind the directive, EU Parliamentarian Kira Marie Peter-Hansen, visited us at Benifex Sweden during our Future of HR event this spring to share insights into how and why the directive came into being. According to Kira, if used correctly, the directive can act as a catalyst for real change.
Why is the pay transparency directive necessary?
“How many of you in this room can justify every salary in your organization today?” That was the question Kira first asked during the opening of her talk at The Future of HR. Only a few hands were raised — and we suspect most organizations wouldn’t respond any differently.
Kira went on to explain that unequal pay today isn’t typically the result of bad decisions, but rather of bad habits. Pay gaps often don’t arise because someone intended them — but because no one noticed they were happening.
The Pay Transparency Directive forces us to document our data and actually look at it. And as Kira puts it: "If we’re against this, what exactly are we protecting? Probably our pay gaps.”
Job architecture in focus
At the heart of the directive lies Article 4, which requires companies to start working actively with their job architecture. This means categorizing roles and pay levels to create a structure for equity.
When roles and levels aren’t clearly defined, it leaves room for arbitrary judgments. And that’s often where pay gaps begin to take root. A clear job architecture not only creates transparency — it also protects the organization from subjectivity, bias, and unconscious patterns.
It will be costly, and it will be difficult — but that’s no reason not to be transparent about what needs to change.
As Kira says: “Comfort doesn’t drive change, innovation, or competitiveness.” And we wholeheartedly agree. For organizations to shift structures — and potentially generations of ingrained processes — things sometimes need to be turned upside down. That is rarely comfortable. And this isn’t about blaming anyone for former decisions — it’s about ensuring equal pay for equal work.
When asked about the right moment to disclose salary or salary ranges, Kira’s response was clear: she believes transparency should begin in the job posting. Early transparency, she argues, helps create trust that one is being valued fairly — and also provides context for why a specific salary is offered.
Pay transparency at IKEA
One of the early adopters of equal pay between genders was the INGKA Group, the holding company that includes IKEA. As early as 2013, IKEA conducted its own Gender Equal Pay (GEP) analysis, with the goal of closing the gender pay gap.
Over the years, they’ve learned that even when gaps are closed continuously, they tend to reappear. That’s because pay-related decisions are made by managers and HR teams throughout the entire employee lifecycle. At IKEA, there are more than 20,000 managers, meaning there are countless decisions around compensation and benefits where things can go wrong — or right
Konstantinos Karavidas, Total Rewards Manager at INGKA, spoke at HR Connect in Copenhagen in June and described it like this:
“With 20,000 managers, there are 20,000 opportunities to close the pay gap.”
Raising awareness of pay disparities and engaging in ongoing dialogue about them allows us to gradually shift leadership habits and how salaries are set.
However, believing that transparency alone will solve everything is naive. Data can reveal disparities and patterns — but it’s people and culture that determine what we do with that data.
Konstantinos highlighted that culture varies from country to country, and new generations have different expectations than those before them. Assuming a one-size-fits-all solution risks including some while excluding others.
Still, when it comes to implementing pay transparency, his stance is clear: “Why wouldn’t you? Pay transparency and equal pay are not about compliance — it’s about doing the right thing.”
Konstantinos closed his talk at HR Connect with three key takeaways:
- Get the basics in place. Clean up your data structures and remove exceptions.
- Define your company’s position. Clarify your pay philosophy and your approach to pay equity analysis.
- Train your leaders. They are your most valuable resource for driving this work forward.
Pay transparency as an employer branding strategy
We believe that pay transparency is not just about compliance — it’s about doing what is right. And doing what’s right builds stronger company cultures and stronger employer brands.
In fact, companies with clear communication around compensation find it easier to attract and retain top talent. The Global Pay Transparency Report shows that employees are 85% more engaged and 60% more loyal when they feel they are being paid fairly. Another study, conducted by Visier, found that 68% of employees would switch jobs to gain access to pay transparency — even if the salary remained the same.
Being transparent sends a strong signal that fairness matters, and that your organization is actively working toward it. It builds trust — and simply makes your workplace more attractive.
Pay transparency in our platform
To help you, as an employer, make the most of our platform, you will soon be able to visualize your pay data directly within it.
We work closely with Sysarb, a leading pay equity analysis service, to help you structure and analyze your compensation data. That data is then integrated into our platform and intuitively visualized for each employee.
Since we use open APIs, we can also retrieve your compensation data in other ways if needed.
Here’s what you’ll be able to present in our platform:
- Your company’s pay philosophy
A clear, structured space where you communicate how you work with compensation. This section includes ready-made templates and AI support to help you easily create and communicate your approach.
- "My job profile"
Employees will see a structured and easy-to-understand view of their pay range, career paths, and receive support ahead of salary discussions.
- Transparency across the entire employee journey
Enabling consistent and accessible data throughout the platform — from the offer stage to onboarding, internal communications, and compensation pages.
- Total reward statement
A personalized overview of compensation and benefits — your employees’ go-to source for understanding their full package.
Want to Learn More?
Curious about how to integrate pay transparency into our platform? Book a demo here, or get in touch with your Benifex contact — we’re happy to help!