Many companies still regard pay transparency primarily as a legal, compliance or communications task, but it is worth approaching the issue from a different perspective. EU regulation is accelerating a change that, in the longer term, will require companies to operate more transparent and consistent pay systems. This is precisely why preparation should not necessarily begin with policies. Instead, we need to understand how our company’s pay system currently works – in other words, if one of our employees asks us how their pay was determined, can we provide a clear and professionally sound answer? If the answer is yes, we are starting from solid foundations. If not, it is worth putting these foundations in order first.

The first step is putting the data in order

Preparing for pay transparency requires an accurate picture of the current situation. We need to understand which roles exist within the organisation, how they are named and classified, which salaries and pay ranges are associated with them, and where significant pay differences exist.

However, having the data is not enough in itself: it must also be possible to compare it. A common situation is that the same or very similar roles appear under several different names within the organisation. The opposite may also occur, when the same job title covers significantly different levels of responsibility. Many companies also have pay ranges, but it may not be clear which criteria determine whether an employee is placed in the lower, middle or upper part of the range. In these cases, the primary task is to make the system behind the data transparent and unambiguous.

The value of roles provides the basis for comparison

The next step is to clarify how the individual roles relate to one another, which of them are identical or similar, and which may be regarded as the same work or work of equal value.

The EU directive bases comparability on objective, gender-neutral criteria, which may include the skills required, responsibility and working conditions. In practice, this means that companies should also review their job structures. The clearer it is where each position sits within the organisation and what value it represents, the easier it is to make consistent pay decisions and subsequently justify them.

A pay range is useful when the logic behind it is also clear

A pay range is an important tool, but defining its lower and upper limits does not in itself create genuine transparency. Clear principles are also needed to determine what influences an employee’s position within the range. Experience, competence, performance, level of responsibility or, in certain cases, labour market conditions may all be relevant. The key is for the company to apply these criteria consistently and to be able to justify its decisions when necessary.

This will become increasingly important because, as transparency increases, employees will not only be interested in the pay range. They will also want to understand why they have been placed at a particular point within it.

What can be done in 90 days?

It may not be possible to resolve every issue relating to pay transparency within 90 days. However, this period may be sufficient for the company to gain a clear understanding of its situation, set its priorities and begin making the necessary changes.

Preparation should be divided into three consecutive phases.

During the first 30 days, assess the current situation

This includes reviewing roles, classifications, salaries, pay ranges and significant differences. At this stage, the objective is not necessarily to make immediate changes. First, the company needs a precise understanding of its starting point.

During the next 30 days, establish the necessary structure

During this period, job families and classifications should be organised, pay ranges reviewed, and the principles determining employees’ placement and progression within the individual ranges defined.

The third 30-day period can focus on the necessary changes and preparation. At this stage, it is worth analysing the identified pay differences in greater detail, determining which areas require intervention, planning the necessary adjustments and preparing managers to answer employees’ questions about pay.

Company size matters, but the underlying principles remain the same

Preparing a company with 40 employees is naturally different in scale from preparing an organisation employing several hundred or several thousand people. At smaller companies, organising the data and establishing a basic job structure are often the most important tasks. As the organisation grows, formalised classification systems, job families, the consistent application of pay ranges and the comparability of roles become increasingly important. At larger companies, these are accompanied by more complex data analysis, reporting and adjustment processes.

When setting reporting obligations, EU regulation also takes company size into account. Companies employing at least 250 people will be required to report annually from 2027. Companies with 150–249 employees will be required to report every three years from 2027, while companies with 100–149 employees will be required to report every three years from 2031.

However, a later reporting deadline does not necessarily mean that preparation should begin later. Organising job structures and pay systems can be time-consuming, particularly when current practices have developed over several years. Pay transparency therefore involves much more than legal compliance. It also reveals how consistently a company’s pay system operates and how clearly it can justify its own decisions.

Regulation will define the framework, but credible transparency is created by the system behind it.