Eric Alonso
Eric Alonso is an international people an transformation, and the Director of Human Resources at the global consulting group Grant Thornton. He is also an HR Tech investor, and advisor in HR and people transformation for some of the world’s largest employers.
The European directive 2023/970 marks a major turning point for companies: it imposes a new requirement in terms of salary transparency, which goes far beyond simple information on remuneration. This evolution influences both recruitment, career management, remuneration, managerial training and the very culture of the company. Far from being reduced to a constraint, it also paves the way for a positive approach to remuneration, which is more equitable and creates trust.
Salary transparency: who is concerned and when?
The directive applies to all companies with more than 100 employees, with reinforced obligations beyond 250 employees. It will enter into force gradually between 2026 and 2027, but its impact is immediate: organizations must rethink their practices as of today.
Upon recruitment, employers will be required to provide a salary range or initial salary level for the position, along with the criteria used to determine compensation and its evolution. They will no longer be able to ask candidates for their current or past gratuity.
For current employees, companies must be able to provide the average salary for a comparable position, as well as the objective criteria that explain remuneration and its progression. The risks of non-compliance are thus multiple: legal, financial but also reputational and managerial.
How to prepare?
To succeed in this transformation, organizations should adopt a gradual and structured approach.
The first step is, if the work has not already been done, to map jobs, skills and pay levels.
The second step consists of precisely identifying and objectifying the discrepancies, in order to highlight the inconsistencies and legal risks. This will allow to prepare the definition of more consistent salary ranges.
Once the target is defined, the company can develop an operational action plan including the revision of salary grids, the clarification of criteria, the training of managers, and the improvement of business frameworks. This roadmap will be followed over time and adjusted as needed.
Finally, transparency only has value if it is shared and understood. Communicating regularly, supporting managers and raising awareness among employees are essential conditions for establishing a positive dynamic of change.
Tips for a successful approach
If the approach, in theory, seems relatively simple, several feedbacks lead to point out practical advice for its success:
- Re-examine the reference frameworks for professions/jobs/grades/skills, which have often evolved in successive layers without always giving rise to operational exploitation or the establishment of structuring sectors within the company. Without systematically resorting to an accurate weighing of each item, the time needed for consolidation of this basic structure should not be neglected.
- Clean and consolidate HR data, which are often scattered and not integrated into a single HR information system, build an automated pay transparency reporting system, and take advantage of it to also address the issue of decent wages.
- Simplify complexity: do not necessarily review all the grids but focus on the most important gaps to limit the number of actions to be taken, analyze the impacts before any evolution, know how to play on the fixed but also the variable parts.
- Mobilize the entire HR function, not only the Compensation and Benefits departments, but also managers and management in order to explain any discrepancies. Salary transparency also opens up an important field of discussions with the social partners, and training for team leaders.
Going beyond: making transparency a real strategic lever
Salary transparency represents a unique opportunity to strengthen consistency and trust within the company. It will contribute to the recruitment of talents for whom equality is an essential criterion, as well as to the retention of employees through more readable, more open and fairer paths.
This transformation finally invites us to rethink the relationship with work, recognition and the role of the company in society. The organizations that will be able to anticipate, structure and embody this new approach will do more than comply with the directive: they will build a more responsible model, more balanced, resolutely focused on equity.