Summary: With 84 per cent of OECD countries expected to mandate pay gap reporting by the end of 2026, the question for HR leaders is no longer whether to engage with transparency, but how seriously.
For the past several years, I have argued that pay transparency was never just a piece of EU legislation waiting to be transposed into national law.
It was, and remains, a much deeper cultural shift. One driven by changes in social attitudes about fairness, openness and equality at work.
The EU Pay Transparency Directive has often been framed as a regulatory burden placed on employers by Brussels. But the latest evidence suggests something far more fundamental is happening.
The law is catching up with society
The OECD’s 2026 report, Pay Transparency in Progress: Valuing Jobs, Closing Gender Pay Gaps, confirms what many of us working in this field have observed for years. Pay transparency is not being imposed by lawmakers alone.
It is emerging organically across societies as expectations of employers change. Legislation, in this context, is not the cause of pay transparency, but its consequence.
The law is catching up with society, not the other way around. And that’s a critically important definition.
The persistence of the gender pay gap explains why this shift matters. Across the OECD, full-time working women are still paid around 11 per cent less than men.
Despite decades of policy interventions, the gap has closed by only eight percentage points since the mid-1990s. At the current pace, it will take decades more to achieve parity.
The law is catching up with society, not the other way around
An expensive business
The economic and social costs of this slow progress are well documented: lower lifetime earnings for women, reduced pension security and entrenched inequality that compounds across the life course.
Against that backdrop, the OECD shows that pay transparency has become one of the most widely embraced tools to accelerate change.
By the end of 2026, 84 per cent of OECD countries are expected to mandate gender pay gap reporting for private-sector employers, up from just over half today.
Although this expansion is closely aligned with the EU Pay Transparency Directive, it is hardly confined to Europe. Non-EU countries (including the UK) are also strengthening reporting, auditing and disclosure systems. This reflects a shared understanding that secrecy around pay is no longer socially acceptable.
Transparency is evolving
Importantly for HR and payroll leaders, the report highlights that transparency is evolving beyond headline pay gap figures. Many countries now require gender-neutral job evaluation, using objective criteria such as skills, effort, responsibility and working conditions to assess the value of work.
This matters because equal pay is not just about men and women doing the same job, but about ensuring jobs of equal value are rewarded fairly, something that historically female-dominated roles have rarely enjoyed.
Around 40 per cent of OECD countries already require such evaluations in the private sector. Convergence is accelerating as new frameworks are implemented.
The new OECD evidence also reinforces another important point. Transparency works best when it is visible, credible and acted upon.
Countries with public disclosure, digital reporting tools and third-party oversight are more likely to see pay gaps narrow.
Where employers simply report data without accountability or follow-up, transparency risks becoming a compliance exercise rather than a catalyst for change. In other words, culture and implementation matter as much as legislation.
Transparency is evolving beyond headline pay gap figures
The central role of HR
This is where HR and payroll functions become central to societal change, which is something I’ve advocated for, for over a decade. Pay transparency is forcing organisations to examine how they value work, how pay structures are designed and how decisions are explained to employees.
It shifts conversations from individual negotiation to collective fairness, from opacity to evidence. Payroll data, once treated as administrative, now plays a strategic role in rebuilding trust between employers and their people.
Crucially, the OECD makes clear why this movement exists in the first place. Pay transparency laws were not created to satisfy regulators, but to address enduring inequality.
Women continue to be underpaid across the world, even in advanced economies with long-standing equality legislation. Transparency alone will not solve this, but without it, inequality remains hidden and unchallenged.
A societal reset is underway
The direction of travel is now unmistakable. Pay transparency reflects changing social values about fairness, dignity and accountability at work.
The OECD has now put robust evidence behind what many of us have long believed. This is not a passing compliance trend, but a societal reset.
For employers willing to engage with it seriously, pay transparency offers something powerful: the opportunity to close gaps that should never have existed, and to build workplaces that are fairer, more credible and more sustainable for everyone.
Pay transparency reflects changing social values about fairness, dignity and accountability at work
Actionable insights
1. Stop treating pay gap reporting as an annual exercise: Reporting without follow-up is just a compliance tick box. Build in structured accountability so the data actually drives change.
2. Check whether your job grading is really neutral: Before legislation reaches you, ask whether historically female-dominated roles in your organisation are valued fairly against comparable ones.
3. Take payroll data seriously as a strategic asset: The data you hold on pay by gender, level, tenure and role type is no longer just administrative, it should be shaping reward strategy and workforce planning conversations at the most senior level.
4. Get ahead of where transparency is heading: Map what you currently report against where regulation is travelling and close that gap on your own terms rather than under pressure.
5. Build transparency inside the organisation: Communicate pay structures, progression criteria and what you’re doing to close gaps.
Read another article by Gethin Nadin: The ‘midlife money squeeze’ is affecting your best people
