How can companies address pay gaps without disrupting internal morale?

Pay transparency shines a light on gaps that may have gone unnoticed before. Correcting those gaps isn’t just about adjusting numbers - it’s about how you plan, communicate, and support the process.

Handled well, this can build trust and credibility. Rushed or poorly explained, it can harm morale and even trigger legal risk.

Once gaps are uncovered, especially unexplained ones, the immediate question is: what now?

The Directive's expectation:

If pay gaps of 5% or more can't be justified, you must:

• Carry out a joint pay audit
• Develop a corrective action plan within six months
• Involve employee representatives in most cases

How to approach it thoughtfully:

1. Start with a pay equity review
   1. Identify gaps and test whether they're explainable
   2. Prioritise high-risk areas, like wide gaps or senior roles
2. Use structured tools
   1. Apply objective, gender-neutral criteria
   2. Use benchmarking and internal frameworks to guide decisions
   3. Avoid blunt fixes (e.g. raising all salaries by a flat percentage)
3. Communicate with care
   1. Set expectations early
   2. Share principles before numbers
   3. Where possible, align corrections with promotion or review cycles
4. Plan for the long term
   1. Budget for phased corrections if needed
   2. Share anonymised results with employee reps or works councils
   3. Commit only when you're ready to follow through
5. Support managers
   1. Equip them to answer tough questions
   2. Provide escalation channels
   3. Reinforce that transparency is about fairness, not blame
       

Addressing pay gaps isn't a one-off fix. It requires clear criteria, open communication, and careful pacing. Done well, it strengthens confidence in your pay framework and reassures employees that fairness is non-negotiable.

Pay transparency will surface tough questions - but it also gives organisations the chance to show real leadership.

By tackling pay gaps thoughtfully, you can turn a compliance obligation into a cultural advantage: proving that fairness isn't just a number, it's a value embedded in your organisation.