Management Consulting

The 2025 Global Pay Transparency Study conducted by Aon revealed significant challenges faced by UK employers regarding pay transparency. The study, which surveyed 123 organizations across various sectors employing over two million people, found that only 10 percent of these organizations felt fully prepared for the upcoming EU Pay Transparency Directive. A staggering 66 percent were still in the process of preparing, while 24 percent reported being unprepared altogether. This indicates a reactive approach to compliance, with many organizations implementing transparency measures only where legally required, rather than integrating these practices into their overall people strategy. In terms of pay equity, the findings were equally concerning. Only 18 percent of UK organizations had conducted an independent pay equity analysis in the past 12 to 18 months, significantly lower than the global average of 26 percent. Despite recognizing pay equity gaps, 71 percent of respondents who identified such disparities had taken corrective actions, such as year-end reviews or recruitment checks. However, the study emphasized the need for organizations to understand the underlying factors contributing to wage inequalities to develop comprehensive strategies that prevent future disparities. Communication emerged as a critical component of the pay transparency process. The study indicated that only 23 percent of UK organizations had developed a communication strategy for pay transparency. Among those with a strategy, 89 percent included training for line managers, and 68 percent had an organization-wide plan to explain pay transparency to employees. Nonetheless, 77 percent lacked a formal communication strategy, and 59 percent had not developed a compliance calendar or internal reporting plan. The study highlighted that effective communication is essential for building trust and ensuring employees understand pay decisions, especially as the EU Pay Transparency Directive mandates gender pay gap reporting starting in 2027. This underscores the urgency for UK employers, particularly those with EU operations, to establish robust, data-driven frameworks to navigate the evolving landscape of pay transparency.