The talent landscape is being reshaped in real time. Evolving legislation internationally and in the United States, increased focus on equity and rising employee expectations are redefining hiring strategies as we advance through the year. A key element of this shift is the increased focus on pay transparency. While pay transparency may be another element of compliance, this rethinking of attraction, retention and hiring can shift pay transparency to a strategic advantage.
Pay transparency can elevate your brand and attract top-tier talent. Organizations that prioritize transparency demonstrate trust, fairness and purpose — fundamental components of a strong employee value proposition (EVP). In this article, we’ll explore the shifting talent landscape, practical strategies to implement pay transparency and ways it can strengthen your recruiting efforts.
What is Pay Transparency?
Pay transparency is proactively disclosing salary ranges in job postings to potential applicants or to current employees for a promotion or internal employment opportunity. There are levels to pay transparency:
Level 1
Basic range posting.
Level 2
Contextual ranges, featuring details on experience, location, skills, etc.
Level 3
Framework transparency, or how an organization determines pay.
Level 4
Individual pay communication, or an employee’s pay and rationale.
Why is Pay Transparency Important Now?
There are several reasons why pay transparency is at the center of the talent landscape shift. From a hiring perspective, by openly sharing pay ranges, organizations foster a more transparent and efficient recruitment process. This clarity helps set realistic expectations for both candidates and employers, reducing misunderstandings and negotiation breakdowns. As a result, applicants who move forward are more likely to align with the role's compensation structure and overall organizational values. This not only streamlines hiring but contributes to stronger long-term matches and increased employee satisfaction.
Legislation – both international and domestic – has increased compliance requirements but also amplified the overall cultural shift to employee visibility and empowerment.
The EU Pay Transparency Directive, adopted in 2023, and set to go into effect next year, is a landmark law that applies to EU-based companies with 100 or more employees. It aims to ensure that workers of all genders receive equal pay for work of equal value and focuses on pay transparency and pay equity. There’s also been legislation passed domestically, with pay transparency laws varying significantly by state. However, there are some common themes including pay range disclosure in job postings, request rights meaning candidates can ask for those pay ranges, salary history bans and an overall emphasis on the spirit of transparency, rather than the letter of the laws themselves.
The labor market remains highly competitive, a trend that has persisted since 2021. This dynamic, combined with increased legislation and greater access to compensation data – 83% of employees research salaries prior to applying for positions – has significantly heightened the focus on pay transparency1.
A Gap of Opportunity
With this shift in the talent landscape, surely organizations would be on top of pay transparency — but according to data from Aon’s 2025 Global Pay Transparency Study, there’s still a big gap between where the market is and where employers are. Organizations have taken note that there is a need to change their pay transparency strategy, whether it’s for compliance or to enhance recruiting and retention efforts. However, the majority of companies don’t feel they are ready for total pay transparency. Out of the 763 North American organizations surveyed, only 25% considered themselves ready for pay transparency; 26% said that their state of readiness has not improved over the past twelve months (Aon).
Additionally, on a global scale, 64% of responders stated that they do not have a communication strategy for pay transparency — the 36% who do, have features such as education, trainings and organization-wide plans.
Our United Kingdom team (NFP People and Talent) reports that the UK is starting to see some tangible shift toward greater transparency with increasing employer readiness to share pay ranges, potentially influenced by market expectations and the ripple effects of the EU’s directive. Backed both by growing employer willingness and overwhelming worker support, government proposals and consultations suggest this trend may soon be embedded in UK law.
Employers who proactively adapt to today’s talent landscape have an opportunity to distinguish themselves in the job market, enhance employee perceptions and organizational culture, while ensuring compliance and mitigating the risk of costly penalties.
Building a Scalable Framework
To implement a pay transparency strategy, it’s important that organizations focus on four areas of a solid framework:
Job Architecture
Clear role levels and progression.
Market Data
Regular benchmarking and analysis.
Pay Bands
Structured ranges with clear rationale.
Review Process
Regular updates and equity audits.
For more information about building a scalable pay transparency framework, check out this on-demand webinar from NFP’s Human Capital Solutions team: Pay Transparency 2025: From Compliance Mandate to Talent Magnet.
Recruiting: Setting Yourself up for Success
Partnering recruiting and compensation initiatives allows organizations to develop market-aligned job offers, ensure consistency in candidate experience and tell a compelling total rewards story. Additionally, there’s data to support that organizations emphasizing transparency beyond mere regulatory compliance derive additional value. On a positive note, according to Indeed, 92.5% of HR leaders say that pay transparency has positively impacted their brand as an employer. Conversely, 67% of applicants avoid non-transparent employers when looking for a job. Being pay-transparent offers a level of trust and employee morale — and transparent pay practices rank second in job seekers’ trust indicators2, contributing to the overall value proposition of your organization.
Looking to align your pay practices with your recruiting strategy? NFP's Human Capital Solutions team helps bridge the gap between compensation and talent acquisition with market insights and hiring expertise. As organizations navigate the evolving landscape of pay transparency, those who act with intention and clarity will be best positioned to attract top talent, foster trust and drive meaningful change. Now is the time to turn compliance requirements into a competitive advantage.
Connect with our experts today to explore how we can help you implement a strategy that will propel your organization forward. Whether you need to benchmark pay, craft a strong EVP or build a transparent recruiting strategy, our Human Capital Solutions team can help.
