Barely 52% of employers actively invest in greater wage transparency

More than one-fifth (22%) of European HR professionals rank remuneration and fringe benefits among their top five challenges. Less than one in three employees (30%) believe that their organization communicates sufficiently transparently about wages. However, 52% of employers say they are actively investing in this area. By June 7 next year at the latest, every country in the European Union must have transposed the directive on wage transparency into national legislation. Companies with more than 100 employees will have to report regularly on any pay gap and other relevant pay information, and employees will have the right to request internal salary information. Incidentally, this will later be extended to the European Economic Area, bringing Iceland, Liechtenstein, and Norway on board as well.

With its directive on wage transparency, Europe aims to achieve equal pay for equal work. More than a third of European employers (35%) acknowledge that there is indeed still a wage gap between men and women. This is particularly evident among employers in Norway (50%), Ireland (44%), and Sweden (43%). These findings are based on international research conducted by leading European HR service provider SD Worx among 5,625 HR managers and 16,000 employees in sixteen European countries.

The survey clearly shows that there is still work to be done. No more than three in ten employees (30%) say that their organization currently communicates clearly about remuneration, such as wage policy, wage packages, wage differences, or wage increases. In addition, 40% of employees believe that their organization is currently making a real effort to achieve equal pay between men and women. Even fewer employees (29% on average) see efforts to tackle inequality in general. 

Nevertheless, just over half of employers (52%) claim to be actively investing in greater wage transparency. The directive probably has something to do with that. 

“Reporting must be done both internally and externally. External reporting is based on general figures for the company as a whole, including the unadjusted pay gap. Internal reporting provides employees with transparency about their pay scales and the average pay per category. Employees have the right to know their own salary and the average salary of colleagues who do the same or equivalent work, broken down by gender. Employers must also make clear the criteria they use for salary and career development. These criteria must be objective and gender-neutral so that the salary policy is transparent and fair."

Transparency around remuneration is about more than just salary: the composition of the remuneration package, the choices employees can make within it, and communication about benefits also play a role. “A flexible remuneration package can help to better align with what employees really need. Currently, one in three organizations in Europe (34%) allow employees to put together their own package within a fixed budget, compared to 25% in 2024. This evolution shows that customization is gradually becoming the norm,” says Fecheyr-Lippens.

Finally, in 2024, remuneration was the most important reason for employees to stay with their employer. But what about satisfaction with what people earn? Two out of three employers (64%) believe they pay their employees fairly. In contrast, half of employees (49%) believe they should earn more for the work they do.

This feeling is particularly strong in Slovenia (60%), Serbia (59%) and Croatia (58%). In terms of sectors, employees in healthcare and social services (57%) and education (54%) are most likely to feel that they should be earning more. Slightly more women (52%) than men (47%) feel that they are underpaid. Furthermore, only four in ten (38%) European employees believe that their pay is competitive and in line with what is customary in their sector. Transparency about the full remuneration package, including benefits, is important in the perception of a “fair” wage. A total reward statement can help with this. Companies would also do well to have their entire wage policy reviewed (pay equity audit) as the deadline for the directive approaches.

SD Worx, the leading European HR service provider, supports small and large organizations with their HR and payroll challenges. To keep its finger on the pulse of employers and employees, SD Worx regularly conducts in-depth surveys. The analysis of the most recent ‘HR & Payroll Pulse’ provides organizations with valuable insights to refine their HR and payroll strategy and make it future-proof.  

The survey was conducted in February 2025 in 16 European countries: Belgium, Germany, Finland, France, Ireland, Italy, Croatia, the Netherlands, Norway, Poland, Romania, Serbia, Slovenia, Spain, Sweden, and the United Kingdom by the SD Worx Research Institute. A total of 5,625 employers and 16,000 employees were surveyed. The results provide a representative picture of the labor market in each country.