The Importance of Pay Transparency

The Importance of Pay Transparency
Aon Insights Series UK

10 of 13

This insight is part 10 of 13 in this Collection.

July 9, 2025 5 mins

The Importance of Pay Transparency

Addressing such a sensitive issue as pay has challenges — and opportunities

The Navigating Pay Transparency session at this year’s Aon Insights Series London focused on the increasing importance of pay transparency for organisations — especially in light of evolving regulations and growing expectations around fairness and equity.

Our panel of experts from both Aon and the broader HR community examined how companies determine why pay transparency matters and the internal processes used to arrive at that understanding. A key focus is on communication — how organisations engage senior leadership, align stakeholders and ensure consistent messaging throughout the business. This comes with both challenges and successes in gaining buy-in and managing differing perspectives, especially when addressing such a sensitive issue as pay.

While transparency is often seen as a driver of equity, we must consider whether transparency alone is enough. There are deeper structural issues that need to be addressed, such as biases in performance reviews, promotion processes and job classifications — steps that every organisation will need to address to move from transparency to real equity.

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We are encouraging line managers to have what might be tough conversations justifying how they set salaries in the first place.

Matt Sinnott
Head of Performance & Reward, Allianz UK

Organisations also need to focus on the impact of transparency on performance-based pay and differentiation. How can your organisation maintain fair and motivating reward practices while being open about pay structures and decisions? This is a philosophical consideration that organisations need to align on to ensure outcomes meet their talent needs.

The practicalities of implementation must also be considered carefully, including both expected and unexpected challenges such as system limitations, manager readiness, and data accuracy. Overcoming these hurdles takes time and is a very real driver of why organisations must start soon rather than later to ensure compliance by June 2026.

Importantly, the broad definition of pay under the EU Pay Transparency Directive — including cash and non-cash benefits — presents significant reporting challenges for firms and cannot be underestimated. This is also a challenge to be adopted early and clearly understood so that any potential hurdles can be identified and given enough time to be resolved.

This article is current as of May 2025

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