Pay transparency: from job ads to pay reviews — the next big shift

As the salary secret begins to unravel, most companies have started preparing for external pay transparency. But the next chapter is already being written, and if your HR or People team isn’t involved in board-level discussions about internal equity and review processes yet, it’s time to start.

Other precedents: Canada’s salary ad rules point to Europe’s future

Canada also added another sharp edge to the transparency trend. Employers must include the expected compensation or range in publicly advertised job postings. But the key detail? If you’re including a salary range, the gap cannot exceed $50,000 – meaning a range of $100,000 to $150,000 is fine, but $100,000 to $200,000 is not.
There’s more: roles expected to earn over $200,000 are exempt from disclosure requirements. This kind of exemption highlights the regulators’ intent – transparency for most, discretion only at the top.
While this applies to Canada today, Europe may not be far behind. The logic is sound, the framework already exists, and governments are actively watching how companies handle pay gaps and fairness. We’ve seen enough regulatory mimicry to know: it’s only a matter of time.

The pay review season is coming — are you ready?

As Q4 planning kicks in, many companies are preparing for annual salary reviews. For those under the EU’s Pay Transparency Directive, this isn’t just business as usual. By 2026, any unjustified pay gaps above 5% will be under the microscope, and employees will be legally entitled to request data about how their pay compares to colleagues doing similar work.

So here’s the million-euro question: Are you paying people differently for the same work, and can you explain why?

Top priorities for pay review season:

1. Spot and close pay gaps early

If two people doing the same job are paid differently, you’ll soon need a reason, not just a number. The Directive demands employers justify any pay gaps exceeding 5% – which means even historical inequities could become compliance risks.

Start by:

• Auditing roles with overlapping scopes and similar titles.
• Flagging any variances above 5%.
• Documenting the rationale behind those differences (e.g. tenure, scope, certifications).

2. Prepare for internal benchmarking requests

The new rules give employees the right to request salary data for their job – not just market data, but internal benchmarking across the company. If you’ve historically limited internal pay data to HR and leadership, that wall is coming down.

You’ll need:

• Clear pay bands by job family and level.
• Manager training on how to handle salary comparison questions.
• Transparent processes to manage and respond to requests without undermining team cohesion.

3. Address the % increase trap

One quiet risk: employees who’ve historically been underpaid may now be locked into “maximum” increase bands (e.g. 5% annually), making it legally and culturally difficult to catch up. The Directive doesn’t offer a workaround, but a strong narrative and early action do.

This is your moment to bring legacy pay inequities to the surface and correct them proactively, before you’re required to explain them.

Build your case for a fair pay culture

Pay transparency is about more than what goes in a job advert. It’s the blueprint for trust, equity, and retention. Smart companies won’t wait until 2026 to comply, they’ll lead now and build a stronger EVP (Employee Value Proposition) in the process.

• Use this pay review cycle as your culture-defining moment.
• Revisit your pay philosophy, not just your spreadsheets.
• Build manager narratives now, not in panic when questions start.
• Set your comp team and HR leads up with tools to spot risks, before employees do.

Closing thought – transparency is a team sport

If 2024 was about starting the conversation, and 2025 will be about building the infrastructure, then 2026 is where everything goes public. This isn’t just about compliance – it’s about getting your house in order, earning trust, and keeping your best people.

The question isn’t should we share pay logic.

The question is, can we proudly stand behind it?