Pay transparency and what this means for EVP and Employer Brand

Pay transparency — Why the law exists in the first place

On 7 June this year the EU Pay Transparency Directive reached the point where member states were meant to have written it into national law, and here in the UK we are inching in the same direction. So, it would be easy to read all this as a compliance story: another reporting deadline, another set of numbers to publish. But it is worth pausing on why the law exists at all.

The directive's own purpose is to strengthen equal pay for equal work, and it treats pay secrecy as the thing that lets unequal pay persist. So transparency is not really the goal, fairness is, and transparency is just the means. And so that distinction is the whole story, because for me, publishing a number is where the fairness conversation starts, not where it ends.

Four yardsticks, and how a pay transparency report falls short

Here's the tension. The statutory gap report measures one thing, at the level of the whole organisation. Last year the UK's gender pay gap sat at 13.1%, a single number standing in for an entire workforce. But nobody actually feels fairness against a company-wide average.

But from listening to hundreds of employees over the last few years, I've heard how it is more complex than just a number. I think of it as four yardsticks they are weighing up at once: their peers, the value of the work they do, the cost of living their life, and the full package they often cannot even see. The gap report captures none of them directly. So you can file a clean report and still have a workforce that feels short-changed.

ADP's 2025 People at Work research put some shape on this. Across nearly 38,000 workers, just over a quarter (27%) said their pay was not fair for the work they do, down from 31% the year before. So the mood has started improving. But the feeling is not spread evenly, and that is where the four yardsticks come in.

The first yardstick is peers. Women were more likely than men to feel unfairly paid (28% against 23%), and the gap widens as people get older. More telling is where in the hierarchy the feeling sits: 13% of the C-suite felt unfairly paid, against 34% of individual contributors. The people with the least room to negotiate are the ones who feel it most.

The second yardstick is the value of the role. This is the one people mean when they say a job is underpaid for what it is, and it is not abstract. Think of nursing. The average nurse's basic pay was around £41,431 in June 2025, and while that edged up a little in real terms on the year before, it is still down about 2.2% in real terms over the past decade. Few people would argue a nurse's work has become worth less over ten years, yet measured against that yardstick the pay has drifted. You see the same logic in the equal-pay tribunals working through the UK courts right now, where shop-floor retail work has been judged to be of equal value to higher-paid warehouse work. That is a formal ruling that the worth of the job and the pay for the job had come apart. And when a role is widely felt to be underpaid against its value, the risk is not only that people leave. It is that younger people, weighing up whether it is worth starting, decide it is not.

The third yardstick is the cost of living, and this is where the picture sharpens. Felt unfairness rises steadily with age, and ADP found the same pattern two years running. Set two of their findings side by side. A visible pay rise in the last year made people more than 2.3 times more likely to say their pay was fair. And yet the workers least likely to have had a rise, and least optimistic about getting one, were the oldest, the very group who already feel the least fairly paid. So the people who feel it most are the least likely to get the one thing that most shifts the feeling.

The fourth yardstick is the total reward people cannot see. Base pay is only part of what someone is worth to an organisation, but the pension, the bonus, the shares, the healthcare and the rest are often invisible to the person actually receiving them. So they end up judging their fairness against a number that understates the whole. This yardstick sits a little differently from the other three, because it is largely in the employer's gift to put right.

So the statutory report misses all four yardsticks at once. But that does not leave an employer powerless, quite the opposite. Once you stop thinking about fairness as a single number and start seeing it as these four measures, a surprising amount of it turns out to be within reach.

What employers can actually do

This is where organisations get to act. Start with the front door, the job ad. Hays found that 80% of employees value pay transparency, and that nearly half (46%) do not believe their own organisation is consistently open about how pay and pay rises are set.

Put a salary range on the ad and more people apply. Totaljobs found 89% of workers are more likely to apply when a range is shown; leave "competitive" in its place and, increasingly, it reads as having something to hide. But even a published band is only the opening move. It invites the fairness conversation. It does not settle it.

There is a version of transparency that looks braver than it is. An employer that already pays at the top of the market loses nothing by being open about its rates, so "we are transparent" and "we pay well" get conflated. The more honest, more interesting story is the employer who publishes even when they are not the top payer, because it is the right thing to do.

Take the UK's biggest industry, for example, retail. It is hard to find actual rates or salary on job ads. But for those who do, that is part of the point: retail rarely shows pay on the ad, so a retailer who does is going against the grain of its own industry.

This is also where the fourth yardstick comes back. If some of the felt unfairness is value people cannot see, then making the whole package visible is fairness work, not a benefits-page afterthought.

Aviva do something quietly clever here: their careers site has a Total Reward calculator where you type in a salary and it builds out the full picture, including an employer pension worth up to 14% of salary depending on what you put in, so you can see how much of your reward sits beyond base pay. Listing benefits on a careers page is not the same as bringing them to life. Being shown the full value is a lever, not a comms nicety.

A note of caution sits underneath all of this. As the reward specialist Victoria Milford of Reward Heads puts it, transparency of policy and process can be more important than the numbers themselves. Publish the number before the logic underneath is sound, the grading, the policy, the way pay decisions actually get made, and you have simply made the cracks visible.

Where this ends up when it goes wrong

Which is exactly what the felt-fairness numbers are warning about. In ADP's data, workers who feel unfairly paid are less engaged, less resilient, less likely to trust their leadership, and more likely to leave.

That is the quiet cost, and the noisier one is playing out in the courts right now. Next lost an equal-pay case in 2024 after a tribunal rejected market rates as a justification for paying its mostly-female shop-floor staff less than its mostly-male warehouse staff, with the payout reported at more than £30 million. Similar claims involving Asda, Tesco and Morrisons are in tribunal right now, covering tens of thousands of workers between them.

Each of these is, in a sense, an organisation discovering that the number it published or defended was only the start of the conversation, and that the logic underneath did not hold.

The brain science: why fairness goes deeper than the numbers

There is a reason this goes so deep, and it sits in how we are wired to read fairness. Decades of behavioural research land on a few plain ideas.

People will accept an outcome they do not love if the process that produced it was fair and clearly explained (that is procedural justice).

We feel unfairness so strongly that we will take a hit ourselves just to push back on it, which is why a sense of being underpaid corrodes goodwill out of all proportion to the pounds involved (inequity aversion).

And we cannot help judging our own effort-to-reward against someone else's (equity theory). And the brain treats unfairness as a genuine threat, not a passing grumble.

None of that is fixed by a number on a page. It is fixed by a process people can see and trust.

A word from the shop floor

I spent the first chunk of my career in retail, at M&S, Boots and Currys, and I have a soft spot for it. Retail is a great leveller. You can build a real career from any background, no degree required, and I watched people do exactly that.

The shifts are hard and they do not always fit neatly around a home life, but there is a camaraderie and a satisfaction in the impact you have on customers that I have rarely seen matched. Retail has never been a top payer, and I am not pretending otherwise. But when pay decisions drift out of step with the rising cost of living, and a sense of injustice about pay starts to settle in, it does put young people off. And that matters well beyond any one shop floor, because retail is the UK's largest private-sector employer, something like one in ten of us. So it's not just an issue for hard-working shop assistants up and down the country, it's an issue for our economy.

So, what's ours to do?

So what does all this ask of those of us who work on employer brand and EVP? Not a checklist. More a shift in where we look.

Publishing is the opening move, not the finish. A directive met, a gap report filed, a band on an ad: these get you to the start line. The real question is what happens once people can see, and whether the logic holds up when they do.

Express the whole package, don't just list it. If part of what feels unfair is value people cannot see, then bringing total reward to life, the way that calculator does, is fairness work, not a comms afterthought.

And read the felt-fairness map, not just the gap report. Where does pay feel least fair, and to whom? The org-wide average cannot tell you. The people lowest down, and the roles the world quietly treats as underpaid for their worth, can.

Pay transparency is just the trigger. Fairness is the real issue. So publishing a pay report really is only where the conversation starts; the real work is everything that comes after.

Vicki Saunders

Founding Director, The EVP Consultancy

With over 19 years in employer brand and EVP strategy, Vicki works with organisations to build employee value propositions that are honest, distinctive, and have impact. She's the creator of the 8-Dimensional EVP Framework and The EVP Edit newsletter.

vicki@theevpconsultancy.co.uk