Beat the deadline: Your EU Directive preparation roadmap

With the EU Pay Transparency Directive deadline less than 12 months away, now is the time to move from planning to action.

Whether you're directly affected by the legislation or looking to stay ahead of the curve, we've compiled our most important advice to help you prepare for the implementation of the EU Pay Transparency Directive next June.

Start with your foundation

1. Audit your current practices

Conduct an honest assessment of where you stand today.

Review your existing pay structures, policies, and practices against the directive's requirements.

For example:

Do you ask about salary history during recruitment?
How transparent are you about pay progression?
Do you have a job evaluation process that is objective and gender-neutral?
Do you have documented pay policies that you share with employees?

Understanding your starting point helps you prioritise the biggest gaps that need addressing.

2. Define your pay philosophy and reward principles

Before diving into the technical requirements, establish why you pay people what you do, and how pay should progress in your organisation.

Your reward principles should align with your company values and provide clear guidance for all pay decisions.

Every pay decision we make signals to our employees what we value as an organisation.

So, it’s important to have a clear set of principles.

Ask yourself:

What is the purpose of pay in our organisation?
How do we want to position ourselves against the market?

This foundation will guide every other decision you make during your preparation journey.

Build your framework

3. Job architecture and job evaluation

A complete job architecture gives you a set of bands/levels designed to ensure fairness and consistency in pay decisions.

It groups roles within your organisation based on their level of skill, responsibility accountability.

With a job architecture framework in place, you also set the foundation for much more.

For example:

Learning and development
Developing a pay structure
Career progression

Not only that, but this will help you communicate with employees and answer any questions about average pay levels (a new right under the directive) and report on your gender pay gap by job category (also a requirement under the directive).

One of the directive's key requirements is having a gender-neutral job evaluation process. Job evaluation systems can be discriminatory if not used in a gender-neutral manner.

This means that they may contribute to the gender pay gap by evaluating male and female-dominated jobs differently.

Common pitfalls to avoid:

Over-weighting physical strength requirements
Using gendered language in job descriptions. Focus on objective criteria like skills, responsibility and effort when evaluating roles.

4. Pay structures and progression policies

Pay structures should balance internal equity with external competitiveness and provide context around pay decisions to employees.

Consider the following:

What's your target market position (median, upper quartile)?
How will you manage employees currently outside the ranges?
What's your policy for pay progression within ranges?
How will you communicate this to employees?

Lack of career progression and the desire for a higher salary are two of the most common reasons people take to the job market and leave their current position.

Pay progression policies allow your employees to understand where they sit within your organisation and how their pay is likely to progress if they remain with you.

Change your habits

5. Stop asking about salary history

Immediately remove salary history questions from your recruitment process. This practice can perpetuate pay inequalities and will be prohibited under the directive.

Train your hiring managers on alternative approaches to assessing candidate expectations.

This links back to your pay policy and approach to pay progression which should clearly articulate how pay decisions are made objectively for new hires.

6. Publish salary ranges for job advertisements

Start including salary ranges in all job advertisements. Not only will this be required, but research shows that job postings with salary information receive significantly more applications and attract more relevant candidates.

Many online platforms have also made it mandatory to include salary information on job advertisements.

If you have a job architecture in place and a pay structure this will provide you with the foundation to publish this information in all job advertisements.

Communication & training

7. Prepare your communication strategy

Becoming compliant with the EU directive requires a significant amount of communication to employees. As well as communicating how pay is set and how pay will communicate, employers must inform workers annually about their right to information.

Plan how you'll communicate your new approach to employees. This isn't just about publishing salary ranges - it's about helping people understand:

How pay decisions are made in your organisation
What data influenced your salary ranges
What they need to do to progress their pay
How your approach ensures fairness and consistency
Their right to pay information

The EU directive balances the need for transparency with data protection and confidentiality. We don’t have to publish all pay ranges and disclose salaries but it's about being clear and open about how pay decisions are made.

8. Train your managers

Two-thirds (67%) of organisations provide no manager training on pay conversations, yet these reward conversations are crucial for success.

When we put new pay policies and processes in place our employees won’t come to HR with all their questions but will speak to their managers.

Your managers need to be confident discussing pay with their teams. It can be useful to provide comprehensive training around:

How your pay processes and policies work
How pay decisions are made and who makes them
How to handle difficult pay conversations

Final thoughts

While these changes might seem daunting, they offer an opportunity to build a more equitable organisation that attracts and retains top talent.

Start early, take it step by step, and remember that well-communicated pay equity is 13 times more important for engaging and retaining employees than high levels of pay.

The journey to pay transparency isn't just about compliance - it's about building trust, improving employee experience, and creating a competitive advantage in the talent market.