Pay transparency : are your managers ready?
66% of companies still don’t have a structured pay framework. 93% have no formal compliance plan in place. Yet the requirements of the EU Pay Transparency Directive (2023/970) will begin to apply progressively at the end of 2027. And the first people to face employees’ questions won’t be HR—they’ll be your managers.
What does the EU pay transparency directive (2023/970) actually require?
Four categories of obligations that will progressively apply starting in 2027
Adopted by the European Parliament in 2023, the Directive applies to companies with more than 150 employees. It introduces four key obligations:
- Transparency in recruitment: include salary ranges in job advertisements and communicate the proposed salary before the first interview.
- Ban on salary history requests: employers may no longer ask candidates about their previous pay.
- Employees’ right to information: employees must be able to access the average pay levels for their job category, broken down by gender.
- Mandatory reporting: publish gender pay gap data and correct any unjustified pay gap exceeding 5% within six months.
This regulatory framework will significantly reshape managers’ day-to-day responsibilities, extending well beyond HR teams.
Three challenges organisations can no longer ignore
Compliance, consistency and credibility: three interconnected priorities
In response to the Directive, organisations face three intricately connected challenges:
- Regulatory compliance: implement the new requirements, including salary range disclosure, the prohibition on salary history requests, and annual gender pay gap reporting.
- Consistency across management practices: without a common framework, each manager is likely to respond according to their own interpretation, leading to inconsistent messaging and weakening HR policy.
- Employee dialogue and managerial credibility: the way pay-related discussions are handled has a direct impact on employee trust, engagement and organisational credibility.
What will change for managers in practice?
HR will not be the first to answer questions about pay. Your managers will—and they’ll need to be ready.
Conversations about pay will increasingly become part of performance reviews, team meetings and everyday workplace discussions. In practical terms:
- Managers will become the first point of contact for pay-related questions and will be expected to justify decisions that are often sensitive, even if they do not yet have the right tools.
- Employees will find it easier to compare salaries, making pay discussions more frequent—and sometimes more challenging.
- Every pay difference will need to be explained through a rationale aligned with the organisation’s compensation policy.
- Recruitment practices will evolve, requiring managers to position and justify salary levels from the earliest stages of the hiring process.
Without adequate preparation, these conversations can quickly lead to misunderstandings, internal tensions and a loss of trust.
How to prepare your managers: a practical, time-efficient learning program
A blended learning program designed specifically for mid-sized organisations
TAKOMA offers a structured learning program built around four complementary components that managers can immediately apply in the workplace:
- Two 15-minute e-learning modules: to understand the regulatory framework and develop the right managerial reflexes, including high-risk situations, appropriate responses and common pitfalls to avoid.
- A two-hour virtual classroom session: practical scenarios, role-playing exercises and group debriefing.
- A practical PDF FAQ: ready-to-use answers for the most common questions managers are likely to face.
This program enables managers to become operational quickly, without lengthy time away from work, while directly improving the quality of pay-related conversations across the organisation.
Beyond compliance: an opportunity to strengthen trust
Well-prepared managers will become key drivers of organisational trust.
Pay transparency is not simply another regulatory requirement. Organisations that prepare early can turn compliance into a powerful lever for employee engagement. Those that fail to anticipate the change risk allowing pay discussions to become a source of tension rather than trust.
The real question is no longer “Should we train our managers?” but rather “Can we afford the consequences of not preparing them?”