Only half of global employers are prepared for future pay transparency regulations to come into force, according to research by Mercer.
Its Global pay transparency survey, which surveyed more than 1,600 multi-national organisations across 60 markets, also found that employer preparedness to meet pay transparency compliance requirements have increased from 32% in 2024.
Employers based in the Nordics, US and Canada are leading in readiness, while those in the UK, Asia and the Pacific are less prepared.
While 77% of respondents globally are developing, or have developed, pay transparency strategies and plans, only 14% have fully implemented their approach. Just 9% of those in Europe said their transparency strategy is fully in place.
Compliance with legislation remains the primary driver for providing pay transparency, with nearly 90% of respondents in the US, Canada, Europe and the UK citing it as a key motivator. More than half (56%) indicated employee engagement as an important factor influencing pay transparency, while 55% cited market competitiveness.
The disclosure of hiring pay ranges is expected to increase from 60% in 2024 to 94% by the end of 2026. In contrast, employers remain cautious about sharing sensitive information, such as pay gaps and adjusted pay equity results, with any pay gaps and equity reporting largely limited to required regulations.
Just 12% had established communication protocols to handle public enquiries on pay from external stakeholders, including candidates, media and investors.
Gordon Frost, global rewards solution leader at Mercer, said: “While many organisations are focusing on meeting legal requirements, a growing number are embracing pay transparency as a catalyst for meaningful change and a means to rethink pay design, build clearer pay structures and foster greater trust with employees and candidates. When employers invest in a trust-forward pay approach, they will see transformative outcomes, including reduced turnover, faster recruitment and productivity gains.
“As organisations navigate the evolving landscape of pay transparency, those making the most meaningful progress are not necessarily the ones with the largest budgets or most advanced technology. Instead, success comes from making deliberate, strategic choices about what transparency should achieve and aligning structures, behaviours and investments accordingly.”
