In this Human Capital Insight episode of the On Aon podcast, Aon talent leaders discuss how pay transparency has evolved from a regulatory requirement into a defining leadership capability. The conversation focuses on what separates organizations that are merely disclosing information from those using transparency to strengthen trust, decisionmaking and longterm growth.
Across North America and EMEA, new requirements are raising expectations — not just for compliance, but for clarity, consistency and confidence. The discussion examines how leading organizations are aligning pay architecture, manager capability and communication strategy to stay ahead as transparency reshapes how employees assess fairness, opportunity and leadership credibility.
Key Takeaways:
Experts in this episode:
Key Moments:
(02:10) How regulatory requirements and employee expectations are driving pay transparency efforts in the United States — and why many organizations have acted but not yet seen full impact.
(07:13) Why transparency acts as a stress test on compensation design, forcing alignment across architecture, pay practices and manager capability.
(13:54) How leading organizations are prioritizing consistent narratives and manager readiness to address rising employee expectations and trust dynamics.
Soundbites:
Laura Wanlass:
“Pay transparency has moved from a compliance question to a capability test for companies.”
Steven Guyer:
“Transparency really acts like a stress test. So, it forces organizations to look inward at things that might have been in place for a long time within the organization.”
Anthony Poole:
“It's important that we are clear in our communications, consistent in what we're saying to employees because transparency doesn't create inequity in itself, but it does make existing inequity very visible.”
Intro
Hello and welcome to another episode of On Aon.
On Aon is Aon’s global podcast that explores the top issues affecting businesses around the world with each week dedicated to either a Risk Capital, Human Capital, Industry or Global topic.
This week it’s our Human Capital Insight, which looks at the health, wealth and talent issues organizations are facing — and how they’re dealing with them.
And we’ve got another great episode for you.
Today we’re discussing the results of a recent Aon Pulse Survey on Pay Transparency and how companies in the US and Europe are dealing with this increasingly important issue.
Joining Laura Wanlass, who’s Governance/ESG Practice Leader for North America in Aon’s Talent Solutions is
Laura Wanlass
Hello everyone, and welcome to this podcast. My name is Lara Wanlass. I'm a long-time partner and leader here within our talent solutions practice at Aon, where I'm mainly tasked with helping the C-suite and the board of directors navigate current and emerging themes on topics such as exec comp, corporate governance and Human Capital Management.
So let's get to what we're actually doing here today. We're here to talk about a pressing topic that despite a lot of companies' hopes and dreams still exists today. And that topic is pay transparency.
We're no longer theoretically talking about this topic. It's not a future issue anymore. It's here right now. And across the globe, organizations are publishing or they're preparing to publish salary ranges, responding to new comprehensive regulations, and are actually trying to meet rising employee and prospect expectations for more transparency about how pay decisions are made.
So we keep hearing questions from a lot of you on this topic. Are we actually ready? Are we exposing risks we didn't realize were there? There's clearly a lot of nerves on this topic.
So today's episode is focusing on the early insights from Aon's soon-to-be-released and published pay transparency poll survey and what it really reveals about company readiness, risk and where organizations really need to focus next.
And luckily I'm not the expert here, but I'm joined by two Aon leaders who are advising organizations on this topic every single day. We have Steve Guyer, our total rewards leader based here in the United States, and Anthony Poole, our total rewards leader based in EMEA.
So let's move into the actual discussion about why pay transparency feels harder than expected for many companies.
So let's start with the big picture. From the outside, or at least from my perspective, pay transparency can look pretty straightforward. You just simply publish some pay ranges, update your policies, move on. What's the big deal? Like, why are we making this a big conversation?
When we look at the poll survey, there's clearly a much more complicated story for all of you with your day jobs and trying to navigate this topic.
So, with that, Steve, what specifically are you seeing in the United States in terms of how companies are navigating this topic?
Steve Guyer
No, thanks Laura. think, you know, first and foremost, when we think about pay transparency, there's a couple of reasons for it. It may be — it might be legislative reasons in the U.S. There's transparency at the statewide level and publishing pay ranges as part of job postings to something more specific around the EU Pay Transparency Directive and being compliant with gender gap reporting. But then at the same time, companies are just focusing on pay transparency in general as part of their employee value proposition.
So there's the side of the coin where it's a mandated something that we have to do to be compliant. And there's another that's just, it's good practice for organizations.
So when we go back to our Pulse Survey data by region in the U.S. that actions have been taken. So U.S. headquartered organizations, either domestic organizations or U.S.-headquartered multinationals have started to publish pay ranges internally and externally as part of jobs postings, be more transparent with employees around their wage ranges or pay ranges.
They've looked at their job architecture and published their architectures and their different types of roles they have within the organization to find what they were by career level. They've also started manager education and pay equity analyses to make sure that we're able to proactively assess and mediate any gaps.
So there's been widespread implementation of certain activities and actions. But as far as the outcomes, we really haven't seen a material impact yet.
So organizations look to be more transparent as part of their, as I mentioned, their employee value proposition as part of just from a talent attraction and retention perspective, and to build trust and as part of their brand. So as we think about how organizations look externally in the market, they are looking to always improve their brand and internally to engage their employees differently. So build trust in processes and policies and who they are and what they do as an organization.
And so what is a lot of these things have been implemented, but to varying degrees of impact so far.
And we'll get into some more later, I think in the conversation, we'll talk about some of the where's and why's. But so in the U.S., broad implementation, but not as much as the expected impact yet.
Laura Wanlass
Yeah, interesting. it varies across the United States. That makes a lot of sense, probably based on size of company, region, just even culture within the United States.
But Anthony, what are you seeing in EMEA? I know there's a variety of different frameworks that could be impacting company readiness and types of actions they're taking. What are you really seeing in EMEA at this point?
Anthony Poole
Yeah, thanks Laura. Obviously in the EU we have the EU Pay Transparency Directive that has really been a catalyst to accelerating action around this.
We've done a recent Pulse Survey that shows a lot of organisations are still grappling with foundational issues around things like job architecture, around things like pay equity analysis and indeed data collection including benefits because the definition of pay is very broad.
We've also got challenges around things like communication and manager education in order to be able to address questions and talk to employees appropriately about pay transparency.
I think the other thing to say is that when you think about pay transparency in the EU directive, it really is for impacted organisations, it is a fundamental change management challenge. It's not just about rewards. It is a change, massive change within the organisation affecting all employees.
And as we think about readiness and compliance, there's potentially 10 or 12 different work streams that we're to be asking organizations to complete to get up to speed.
So it really is a broad change agenda.
I think the final thing to say is, when it comes to the EU directive, we are still grappling somewhat across the EU with transposition in local countries. So, a lot of organizations are suggesting that it's challenging to implement the final requirements when we don't have those final requirements for the individual countries.
So it's been a long process. We're nearly three years in. That transposition is meant to complete in June, but a lot of countries will be delaying.
So there is real challenges for organizations in how they become compliant when they don't have the final ones.
Laura Wanlass
Yeah, definitely more complexity to some of the regulations that you're talking about, Anthony, versus some of the state requirements here in the United States, which are much more simplistic.
Hard to be ready for something that hasn't yet been defined. Probably a big takeaway. Okay, so let's move on to actual readiness gaps and whether they're actually about structural issues or if they're just regulatory gaps for most. And I suspect based on what you both just said, it could differ based on region.
And one of the strongest signals from the Pulse Survey is that the readiness gaps do not appear to be simply about the regulatory compliance, at least in terms of the responses we saw.
They really were about structural issues for many companies, maybe structural issues with comp plans, programs, amounts.
So let's start with Steve. Can you unpack that a little bit from a North America perspective?
Steve Guyer
Absolutely. When organizations say they're struggling, it's rarely because they don't understand the law. That's because transparency focuses long standing design decisions that they open.
So when we think about the different pieces that transparency starts to develop, that's your types of jobs. So your architecture, your structure of jobs, the policies you have around that, around career progression, around the time of career progression to pay, management readiness and all the things we've been talking about.
But the Pulse Survey really shows that transparency really acts like a stress test. So it forces organizations to look inward at things that might have been in place for a long time within the organization. Again, very rarely are organizations looking at policies every year or looking at their architecture.
Now in the last few years, I know in the US and North America, we've really focused a lot. There's been a high focus on job architecture just with the evolution of organizations. But when we think about transparency, you kind of have to pull it all together.
So we're thinking about the types of roles we have, again, the associated policies around career, around pay and rewards, and then how that ties out to pay equity and how it ties out to, so how we pay folks and the practice around the pay, and then the manager education and ability to describe or respond to requests from employees as we get more transparent.
So I think when we think about pay transparency, it's about a lot of foundational elements, starting to weave together the narrative around how they tie to one another. We're finding that in the U.S. there's been a lot of activity as I mentioned previously, and now it's just taking action to bring it all together and equip managers with the story, the narrative, and the responses to have consistent responses and a consistent experience for employees.
Laura Wanlass
Yeah, that makes a lot of sense, Steve. Pay transparency basically forces you to evaluate the effectiveness of your programs more holistically. What's the impact on those decisions in terms of how they come together and are ultimately communicated to employees in the external market?
It is bringing to light maybe some of the inefficiencies within your own org.
So with that, Anthony, what are you seeing in the UK and in Europe? What's the risk if organizations ignore those gaps in your area?
Anthony Poole
Yeah, one thing to say, Laura, is that organizations are very concerned about what's going to be employees' reaction to some of this transparency. I don't want to say that you only get one go at it, but getting it right from the start with clear structures in place is fundamental and key.
Our message that we give out to our employees has to stand up, has to be robust and rigorous. Otherwise, we risk a big erosion of trust right from the get-go, which could be extremely challenging to unpick.
Naturally, I think employees are going to look at the numbers. They have internal right to information requests. They're going to see external pay ranges potentially. There's going to be external advertising. But very quickly, when they look at those numbers, they're going to have questions around things like fairness, logic, consistency.
And one of the things the EU directive does require is that we are transparent around how pay is set, progressed, and managed.
So it's important that we are clear in our communications, consistent in what we're saying to employees because transparency doesn't create inequity in itself, but it does make existing inequity very visible.
And so we've got to be clear about what that means for us and how we're addressing it.
Laura Wanlass
I like what you just said, Anthony, because it gives the principle of first impression, right? You want to put your best foot forward, even if you're not perfect, with the data that you have and be prepared.
And then I was going to say, also feel like we all have the memory of goldfish on a lot of things HR sends out, but not when it comes to pay, right?
So this is a very visible thing that most employees react very emotionally to.
So it's very impactful, which brings us to the next theme from the Pulse Survey, which is
the managers on the front line, right?
So managers are probably the make it or break it factor in the end of how impactful or effective your strategy on pay transparency might be.
The early Pulse Survey insights suggest that many organizations really underestimate, or maybe they're purposely not thinking about how critical this manager readiness is.
And Steve, from your perspective, why do you think this is so impactful?
Like why should they be focusing on the manager angle to this?
Steve Guyer
We can think about managers. They are that first line of contact for employees. So they are the folks that employees go to with any question or any complaint that for that matter.
What's interesting is you could have the best philosophies and programs in the world, but then this goes across, not just managers, but overall within an organization. But managers tend to be that frontline as I said. You get the best programs in the world, but they can't be explained in a way that employees understand them. You start to lose credibility, but you start to lose really the value of the programs that you have. So that manager truly is that, that I believe the most critical point within the organization. What's interesting with the, we think about the broad survey, our broad Pulse Survey, we see that the, that managers are maybe less ready than, than we would expect at this point from the pay transparency perspective from a North America, just general paid transparency perspective.
But when we dove into the regional cuts of the data, you'll see that manager readiness is moderate to high. Moderate meaning that it's in progress, that folks are going through training and we're creating FAQs, that consistent experience for employees to high and that they're mostly ready.
To me, that was a bit surprising, to be honest with you, working with clients on this topic for a number of years now, it always seemed to be clients were working, organizations were working through getting all the data ready and looking at pay equity and seeing how the readiness assessment, so to speak, and the employee piece was coming towards the end.
But the Pulse Survey responses were actually pretty surprising to me in saying that there's probably more positive, there's a positive lean in North America from being moderately to highly ready at the manager level.
Laura Wanlass
Certainly good news. But that is a good nugget versus some of the fear that we've heard in the market about is most of our most companies unprepared to address.
So it sounds like they've taken the steps. There's been some actions with managers to actually learn how to communicate these things. And as more requirements come through, maybe they're well-positioned in North America.
Anthony, with that, how do you view the leading organizations in terms of how they're addressing this topic?
Anthony Poole
Yeah, thanks, Laura. I mentioned earlier the 10 or 12 things that organizations might need to do in terms of compliance and manager training is absolutely one for everyone. It's something, that if you ask me, as you did about leading organizations, they're very much putting this at the core, at the forefront of their pay transparency journey, making sure that we have clear education to our line managers. They're able to answer the right questions. They have the right materials. They understand escalation points. As Steve said, they are the first line of defence and we don't want that to be an afterthought because we've already talked about the information employees are going to have that's going to be new, there's going to be more of it, they're going to have questions and those line managers are likely to be the people who are going to field the first questions.
So much of when we talk about pay transparency is about having a single answer to how pay is determined. If we talk to organisations currently, ask five different people within the organisation, you get five different answers. We have to be getting to that one single answer and that means upskilling our line managers to answer those questions and address some of those challenges.
We're also seeing, I would describe it as an operational impact as well, where pay transparency doesn't create a single conversation, there could be many. There's going to be multiple layers to people's questions. The survey itself reinforced that transparency doesn't just change what gets disclosed, it's anticipated as well to change the volume and density of requests we're getting from our employees.
And again, that's going to be a factor of they've got new information at the fingertips they haven't seen before. They want clarifications. They want to understand it more clearly. We see HR teams and HR managers often dealing with a higher volume of pay-related questions, many of them highly individualized.
So organizations really need to plan for that and be thinking about how they're going to cope with that volume of requests and what the escalation points are, who's answering what questions, because we want to be clear with our line managers on the answers that they're providing and the consistency that they give.
Steve Guyer
And to add to Anthony's point, I think the right to information in Europe, I think that's a really key piece, especially from a manager perspective. It's not just about the response to the request. It's actually understanding the process of how an employee goes about requesting information and what's the right process, the right escalation points and all that. How do we go about actually conducting the request and then responding to the request, whether it's service level agreements or turnaround times, because that may vary by country. It goes beyond just having FAQs, it truly is working through the process, your systems, contact points, and to make it an end-to-end experience for the employees and setting expectations of what that experience looks like.
Laura Wanlass
Those are really good points. In a way, it's like pay transparency is forcing some rigor and governance and allowing companies to be more strategic on their pay decisions. Everything you just mentioned is bringing it all together, creating some formality, really causing companies to prepare more than they have typically, I would say, in the past in terms of the why behind the decisions that are being made.
If you have to communicate something, employees can request it. It's forcing companies into a more efficient way of making pay decisions. That's pretty cool.
OK, let's transition a little bit and maybe highlight how transparency is more of a journey as opposed to an on-off switch.
I'm sure everybody would like these things to be on-off, but clearly this is a journey. So one of the things that stood out in the survey is how few organizations actually describe themselves as done. Now, Steve, what does that tell us?
Steve Guyer
Done is an interesting word. I don't think it'll ever be done, especially with transparency as organizations continue to evolve, the market evolves. It's not a one-time event. As we've talked about, organizations have to look at their foundations. So they're looking at their job architectures, their policies, the tie to pay and career progression and the different analyses, the equity analyses. I think part of it is for organizations, think one thing that I know Anthony and I spoke with organizations about is: What can you do now? What's going to get you to compliance now? But what's the next step? What's the roadmap beyond that?
So there's always going to be a next thing where it can be going back and you should be assessing your architectures on a regular basis. Organizations are evolving, should be assessing your policies, your practices, and obviously looking at your gender gap analysis, your pay equity analysis. So I think it's short answer is it isn't a one-time event. It is evolutionary and the organization should continue to build upon. Build out their strategy, enhance, assess their strategy going forward. Again, as the market changes, as their talent strategies change, just tying their talent strategies back to the organization goal and the market.
Laura Wanlass (
Yeah. Yep. That makes a lot of sense. And Anthony, can you build on that from your perspective?
Anthony Poole
Yeah, absolutely. Everything Steve said is spot on. But I think that shift is absolutely critical. And as I've said already on this podcast, it's organizational change we’re dealing with, right, which is huge fundamental shifts. We talk a lot in Europe about the EU directive, but that, for example, doesn't cover countries like the UK, not in the EU. So we're to have evolving landscapes as well, changing requirements in different countries that are going to mean that organizations need to continue to evolve and adapt.
We've also got timeline challenges around the EU Directive itself with different countries transposing at different rates. So there's going to be an evolutionary part to some of the requirements as well.
That's the legal aspects or the regulatory aspects, if you like. Also, we've got the social challenges, right? Employee expectations are evolving very quickly. And in many cases, they're moving quicker than policy. What starts out as a request for ranges is going to become questions around understanding progression, fairness, future opportunities within the organization.
And pay transparency expectations continue to evolve on both those fronts. Organizations that build flexible frameworks rather than just minimum viable solutions are going to be far better positioned to cope with change and challenges in the future as well.
Laura Wanlass (19:59)
Yeah, that makes a lot of sense. I think with all of the insights you've both highlighted here, there's a lot of great actionable insights you've provided for companies. But let's get even more tactical here as we think about when you look at the results of the Pulse Survey, where should leaders be focusing right now?
So based on what you're seeing both historically and right now and what those responses show. Steve, let's start with you. What would you advise companies to do right now?
Steve Guyer
Right now, it's really focused on your foundations. We're in different states, so the transposition of the EU pay directive is forcing some organizations to really put together a minimum viable solution, as Anthony said, and get to compliance.
But if you have the ability to think about strategy in a broader sense, look at your foundations, look at your architectures, your policies, your connections to reward the career strategy, and then also, again, good practice. Your equity, your pay, actually pay practices and your equity assessments. So be proactive in looking at your employee population as related to rewards.
So again, not everyone has the ability at this point to go back to the beginning, but for North America-headquartered organizations that are multinationals and have presence in the EU, really think about what you need to get to get to good now and compliant. And then provide yourself the time to go back and make refinements. So get to good, go back and get to great, or go to great is what I recommend.
Laura Wanlass
Yeah, that makes lot of sense. It's that pursuit of excellence. You're going to keep refining around the edges, keep improving it as you go, especially with it being visible. Anthony, what would you add to this as your key takeaways for leaders trying to navigate this topic?
Anthony Poole
Yeah, Steve's absolutely right with the foundational pieces that's for everyone, but building on that, I would think really about being clear around the narrative and what we're hearing from organizations, what we're seeing from organizations — a lot of work is firing up lately around communications as a major workstream for organizations. Employees don't expect everything to be perfect, but they expect honesty and some clarity. And they don't necessarily understand these requirements that are coming through and what they're entitled to. So we want to be clear with them on what this means for us in our organization. I would say organizations that communicate intent, acknowledge the gaps, explain how they're evolving, are going to be able to hopefully maintain trust, even when the answers are imperfect.
So, getting that narrative right, being clear on what it means for us, I think is fundamental on top of those foundations.
Laura Wanlass
Yeah, if you don't set the narrative, someone else will. We don't want people, their minds to wander into something that isn't true. So that's really great advice.
So with all of that, this went by really fast. Thanks to both of you for your insights. And to close here, if there's one thing the Pulse Survey makes clear, at least to me, it's that the pay transparency has moved from a compliance question to a capability test for companies. So with that, Steve and Anthony, thank you for joining us and thank you to everybody else for listening to On Aon.
We'll continue to share insights from Anne's Pay Transparency Pulse Survey as the data evolves. Until next time.
Outro
Thanks for tuning into the latest episode of On Aon. If you enjoyed this episode, don’t forget to subscribe wherever you get your podcasts and be sure to visit Aon.com to learn more about Aon.
We’ll be back next week with another episode — our Industry Insight — where we’ll be discussing the Risk Capital and Human Capital issues facing the construction industry.