10 Ways to champion DEI through the EU Pay Transparency Directive
The EU Pay Transparency Directive must be fully implemented into national law by each EU member by June 2026. Some UK CEOs are saying that they are finally seeing the positive side of Brexit in that they don’t have to comply with the directive.
But even though the UK is no longer in the EU, UK companies bidding for EU public sector contracts will need to demonstrate compliance with these standards or risk being excluded from lucrative public procurement opportunities. This creates a powerful commercial incentive for pay transparency beyond mere compliance.
The EU pay transparency directive isn't a burden. It's the permission slip you've been waiting for to fix what's broken in your reward systems and build something genuinely inclusive.
Smart organisations aren't asking "How do we comply?" They're asking "How do we use this to become the employer of choice everyone, particularly generation z employees, wants to work for?"
Beyond compliance
- Treat your employees like adults: Publish pay ranges, progression criteria, and decision frameworks. When everyone knows the rules of the game, everyone can play to win. This helps all groups of employees, particularly those without access to a variety of internal networks.
- Redesign job architecture with inclusion in mind: Redesign your job architecture to create clear, objective level descriptions and titles that remove subjective barriers to progression. Ensure comparable roles are genuinely comparable across different departments and demographics. That "Customer Success Ninja" role is actually a Level 3 Account Manager. Clear levels mean clear progression for everyone.
- Train managers to have meaningful pay & career conversations: Don't just give employees pay information; train managers on how to discuss it fairly and sensitively. Every employee deserves to understand their progression potential and reward opportunities, not just those confident enough to ask.
- Create inclusive reward philosophies: Move beyond traditional performance metrics that may disadvantage certain groups in favour of those who shout loudest. Value collaboration, mentoring and inclusive leadership. Ensure your pay philosophy explicitly addresses equity and fairness as a core principle.
- Transform pay gap reporting to drive equity: The directive requires gender pay gap reporting by job level. But why stop there? Layer in ethnicity and disability data. You may spot patterns that explain why certain talent keeps walking out your door and be able to prioritise targeted interventions.
- Establish regular pay equity reviews: Don't wait for annual reviews. Implement quarterly pay equity audits using the directive's monitoring requirements. Create a dedicated budget for immediate corrections when gaps are identified, demonstrating genuine commitment to fairness.
- Empower employee representative groups: Your employee representative groups aren't party planners, they're strategic partners. Share transparency data with them and work with them to identify trends and propose solutions. If you can get these groups on your side, they will be advocating for you with the rest of the organisation.
- Make recruitment transparent: Published pay ranges attract diverse candidates. Research shows that transparent salary ranges particularly benefit women and minority groups who are less likely to negotiate. Make your commitment to fair pay visible from the first interaction with future employees.
- Link executive pay to equity metrics: Connect leadership bonuses directly to pay equity targets and DEI outcomes. When executives have personal stakes in outcomes, pay transparency and equity becomes a strategic priority rather than an HR compliance exercise.
- Build psychological safety through fair processes: Transparency isn't about outcomes. It's about providing context and treating colleagues like adults. Explain how decisions are made. Psychological safety comes from knowing the system is fair, particularly employees from underrepresented backgrounds who may question whether they're valued equally.
The bigger picture
Ultimately, this is about trust.
When people trust that they're paid fairly, they stop checking job boards. They stop wondering if their colleague earns more for the same work. They start focusing on what actually matters - doing brilliant work for an organisation that values them.
The directive isn't forcing you to be transparent. It's giving you the excuse you needed to do what should have been done years ago.
The organisations that grasp this opportunity won't just avoid penalties. They'll build workplaces where talented people actually want to stay.
Supplied by REBA Associate Member, 3R Strategy
We help you attract and retain your people through a fair and equitable approach to pay and reward.
