Transparency around pay is growing fast – voluntarily or through legislation. Discover what it means for your business.
Pay has long been a private matter. Not anymore. Employees expect visibility. Regulators demand fairness. Businesses face increasing pressure to open up on pay.
So, is your organisation ready?
What’s Changing
UK law already requires companies with 250+ employees to publish gender pay gap reports. That means showing the difference between what men and women earn on average.
Recent analysis from PwC (2025) shows the mean gender pay gap has narrowed from 11.8% to 11.2% in the past year. The median gap dropped from 9.1% to 8.6%.1
These shifts signal a trend: pay transparency isn’t optional anymore. It can affect employer reputation, morale, and legal exposure.
Pay transparency is increasingly expanding beyond gender, covering bonuses and pay information for employees across different ethnicities, abilities, and seniority. Future legislation could go further, for example by requiring pay ranges to be included in job postings.
Why Transparency Matters
· It builds trust. When employees can see pay bands or understand how salaries are set, they feel treated fairly.
· It reduces suspicion. Hidden pay practices breed rumours and resentment.
· It helps retention. Fair pay promotes loyalty.
· It supports equal pay and diversity goals. Closing pay gaps is easier when you measure and share data.
What Businesses Should Do
If you’re considering pay transparency, here are practical steps:
1. Audit your current pay data Check your existing data by role, seniority, gender, etc. Identify any discrepancies or patterns that raise questions.
2. Review your pay and reward policies How are salaries set? Are there biases in promotions, bonus awards, or pay bands? Clear criteria helps.
3. Engage stakeholders Speak with HR, leadership, and employee representatives. Get feedback. Transparent communication builds buy-in.
4. Decide what to disclose Many organisations start with gender pay gap figures. Others go further: pay ranges in job adverts, transparency by role or seniority. Think carefully about what you share.
5. Train managers Managers often handle salary or promotion conversations. Equip them to explain pay decisions clearly and fairly.
6. Plan carefully Transparency must be structured. Maintain data privacy. Be consistent. Avoid surprise disclosures without context.
Be Wary Of
· Incomplete data. Publishing gaps without context can backfire.
· Inconsistent application. One department showing one thing, another showing something else – employees will notice.
· No follow-up. Drawing attention to the gap is only the first step – closing it is the work.
· Over-promising. Don’t commit to public disclosure or pay-band changes unless you’re sure you can deliver.
Legal & Reputational Risk
Failing to publish required reports can lead to enforcement by the Equality & Human Rights Commission.
Operating unfair pay across genders can lead to an equal pay claim under the Equality Act 2010. This is a claim by an employee against their employer for receiving unequal pay compared to a colleague of the opposite sex performing the same, equivalent, or work of equal value.
Misleading or incorrect pay data damages credibility. Transparency failures often show up in tribunals and media.
Final Thought
Pay transparency isn’t just a compliance box to tick — it’s a signal of fairness, trust and progress. Businesses that move early will not only stay compliant, but also gain a cultural advantage.
If you’re considering introducing or updating pay transparency policies, ask us about our Pay Review and Gender Pay Gap services. We can help you audit data, update policies, and communicate change with confidence.
