As the UK edges towards ethnicity and disability pay gap reporting, and with the EU Pay Transparency Directive setting a new global standard, hybrid and remote employers can’t afford to ignore the transparency shift, says Lorna Ferrie, legal and compliance director at Mauve Group.
In the UK, momentum around pay equity is building. PwC’s 2025 Gender Pay Gap Report shows one of the UK’s sharpest gender pay gap declines since mandatory reporting began in 2017. The report records a gap decrease of 0.5 percent (from 9.1 percent to 8.6 percent) for median hourly pay, with the mean gap narrowing 0.6 percent (from 11.8 percent to 11.2 percent).
The progress being made in the UK is encouraging. However, alongside the push for more transparency a new wave of regulatory complexity is coming. Proposals like the Equality (Race and Disability) Bill, which will introduce mandatory ethnicity and disability pay gap reporting, are placing increased scrutiny on how employers’ structure, track, and report pay.
This intensifying spotlight on equity coincides with women and individuals with disabilities now comprising a large proportion of remote and hybrid roles. From 2016 to 2022 there was a 306 percent increase in women working from home, compared to a 114 percent increase for men, while nearly one fifth of remote workers in the UK have disabilities. This means that organisations with distributed teams face added pressure to get pay right, not just in terms of compliance but to uphold internal equity and retain top talent.
To address these challenges and support equitable pay structures, salary benchmarking is becoming a crucial, though often underestimated, tool.
Dispersed teams
Pay transparency is vital to foster an equitable, secure and supportive work environment for hybrid and remote teams. One in five UK workers (6.64 million) work primarily from home, and analysis shows that 1.16 million have a disability. A survey of more than 1,200 workers with disabilities found that 80 percent saw working from home as beneficial to managing their health. However, USDAW reports that workers with disabilities earn on average 17.2 percent less than non-disabled workers.
Research from Scope and People Like Us shows 73 percent of workers want tougher legal requirements to compel employers to publish pay information and to take corrective action when gaps emerge. Nearly eight in ten (78 percent) believe employers should be required to compare and match the pay of employees performing work of equal value.
Benchmarking ensures equitable compensation across all regions where your business operates and helps you to offer attractive, equitable compensation, in line with local expectations. It also allows you to promote pay transparency within your organisations, ensuring that your dispersed workers feel supported and valued, thus increasing retention rates.
Compliance watch
The EU Pay Transparency Directive, and the UK Equality Bill are two pieces of legislation that should be on every UK employer’s radar.
While the EU Directive won’t directly impact UK organisations operating solely in the UK, those planning to scale or operating overseas will need to follow the rules.
The UK government is also aligning with some aspects of the EU Pay Transparency laws. At present, UK employers with over 250 employees must only report their gender pay gap annually. The UK Equality Bill is a forthcoming piece of legislation, requiring organisations to also report on ethnicity and disability pay gaps.
Again, salary benchmarking is a valuable tool for UK employers hiring overseas, allowing them to make strategic decisions, backed by in-country equity, transparency, and cultural data.
Benefits are integral to compliance and employee satisfaction, so must be included. According to recent research, only 35 percent of employers with global workers are benchmarking their benefits to ensure local compliance. Salary benchmarking services will highlight all mandatory and optional in-country benefits to guarantee compliance.
Consistency across regions
Managing recruitment approaches across global and remote offices can create a significant operational burden. As the EU Directive comes into force, some businesses may decide to align their hiring practices with the directive’s standards across all regions, including the UK, to simplify processes and reduce risk.
This move also positions them well for compliance in other regions with similar legislation, such as several US states, supporting smoother global expansion.
Salary benchmarking is not just useful for deciding on pay. It provides crucial legal context for the location in which you wish to hire. Consistently benchmarking your salaries means you remain up to date with any and all relevant legislation and ensure constant compliance.
For UK-based companies competing with EU employers for top-tier talent, falling short on transparency could be a disadvantage. The new rules require salary details to be disclosed early in the recruitment process, and organisations that fail to match this level of openness may lose out to competitors who do.
UK employers should use this as an opportunity to audit their own pay structures and address equity gaps. Clear salary frameworks and fair progression policies not only improve internal equity but also enhance recruitment and retention.
Today’s jobseekers are increasingly drawn to organisations that are open about pay and show a clear commitment to fairness. By proactively embracing pay transparency and benchmarking, UK employers can not only meet regulatory demands but also build inclusive, resilient teams that thrive in a global landscape.
