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Navigating Global Pay Transparency

January 14, 2025
3
Min Read
Navigating Global Pay Transparency

The changing landscape of pay equity and transparency regulations creates a growing challenge for multinational organizations. 

Key topics

Trista Straver, Compensation Data Director @ Compa 

I sat down with Christine Hendrickson, VP of Strategic Initiatives at Syndio, to talk about how companies are tackling challenges and taking action.

Trista: When it comes to building trust, employees want to know the rationale behind their pay. Many of our customers prepare for questions about pay equity by proactively assessing how employees are paid compared to each other and the market.

As pay transparency regulations like the EU Pay Transparency Directive gain traction, how can companies stay compliant while fostering employee trust through fair, competitive pay practices?

Christine: Companies are struggling to keep up as regulations, set to double by 2027, vary widely by country. The EU Pay Transparency Directive, the most significant pay equity legislation since the 1960s, affects employers across the U.S. and Europe.

Companies must navigate compliance requirements, gather both pay and benefits data, and meet complex analytics and reporting standards—a massive challenge, especially with globally distributed teams and interconnected regulations.

Syndio created a comprehensive set of pay gap reporting guides to clarify what, when, and where companies must report, with regular updates as regulations evolve.

Trista: The laws are changing quickly. How are employers preparing for what’s coming next?

Christine: That’s one of the main challenges of the EU Pay Transparency Directive right now. The Directive provides the minimum requirements, but each government may choose to add additional requirements as they transpose the law. So we’re not sure what additional requirements (for example, lower employee thresholds) will be added to the foundational requirements. 

I think that’s why it’s important for companies to position themselves for a consistent, unified approach balanced with responsiveness. They need built-in flexibility to look at different employee populations, different data components, and conduct different types of analyses. We’re working now with companies to help them configure their employee populations so they can conduct their pay equity analysis today, prepare for public reporting, and also set the foundation for additional calculations based on each jurisdiction's interpretation of the law.

Trista: Absolutely. Companies need to balance a unified approach with local responsiveness by designing country-specific pay programs. Adopting U.S.-based pay practices globally has often led to unsustainable and misaligned compensation strategies, both in the market and internally.

Benchmarking practices should be localized, and policies must also comply with local pay equity and transparency laws and regulations.

New pay transparency regulations go beyond pay gaps. The EU Pay Transparency Directive demands greater transparency in sharing pay ranges and career progression. Many Compa customers are preparing with our real-time market data analysis, offering precision that surveys can’t match. This level of insight is essential for creating ranges that reflect both the market and actual pay practices. Christine, balancing all of this is incredibly complex, isn’t it?

Christine: Exactly. The EU Pay Transparency Directive is driving significant change and is a top priority for customers. To navigate the complexities of pay transparency and fair pay, companies need a combination of expertise in pay equity analysis, pay gaps, reporting, and the market data insights provided by Compa and Syndio.

Trista: Working with customers, we’ve seen that sharing pay ranges comes with significant responsibility. It requires more than market benchmarking—it demands consistent application of guidelines for individual employees.

Even with competitive, well-structured ranges, bending the rules for individuals often goes against the intent of most pay equity regulations. Ultimately, sharing pay ranges should build confidence in equitable pay opportunities for employees.

Consider assessing your exception and approval practices to understand how manager discretion may cause inequities or employee perception of unfair pay.

With pay transparency and laws like the EU Pay Transparency Directive bringing company practices into focus, employees are likely to become more open about discussing pay. Consistently aligning employee pay with your compensation strategy can help maintain engagement and show a genuine commitment to the principles of pay equity.

Want access to a comprehensive set of pay gap reporting guides to help you stay ahead of global pay transparency? Learn more here.

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