The vast majority of UK employers are unprepared for forthcoming pay transparency demands, according a study by Aon.
While the UK is not part of the European Union, UK-based companies with EU operations will still be affected by the incoming EU Pay Transparency Directive.
The finding was revealed in the firm’s 2025 Global Pay Transparency Study, which looked at 123 organisations across multiple sectors, representing more than two million employees. In March 2025, researchers assessed readiness across key areas including pay transparency strategy, pay equity analysis, and communication and governance. Results showed significant gaps in preparedness, approach and communication.
Just 10 percent of UK organisations reported being fully ready for pay transparency, with 66 percent still preparing and 24 percent not ready at all.
Anthony Poole, partner, Talent Solutions at Aon in the UK, said: “Half of UK respondents admitted they are taking a geographically targeted approach, implementing transparency measures only where they are legally required. This suggests that many employers are reacting to compliance pressures rather than proactively embedding transparency into their broader people strategy.
“This is pragmatic in the current environment, but organisations should be prepared for further developments across locations in the future as non-EU locations, including the UK, are likely to look at evolving their requirements at some stage.”
Pay equity gaps
The study found only 18 percent of UK organisations had undertaken an independent pay equity analysis in the past 12-18 months, compared to 26 percent globally. But a further 18 percent had never conducted one.
However, among UK employers that identified pay equity gaps, researchers found that 71 percent said they were taking corrective action, such as year-end reviews or recruitment checks.
Poole said: “To address pay disparities effectively, organisations will need to identify the underlying factors contributing to wage inequalities. This understanding will enable them to develop and implement comprehensive strategies that prevent such disparities from re-emerging throughout their workforce.”
He said it is also important to recognise that addressing or closing the gap is only one part of the challenge.
“EU requirements mean organisations need a robust and analytical framework for determining and justifying their calculated outcome, and robust ongoing governance to ensure these frameworks remain fit for purpose,” he said
Communication shortfalls
Communication is critical in preparing workforces for increased pay transparency, but only 23 percent of UK organisations have a communication strategy. Of these employers, 89 percent cover training for line managers, and 68 percent plan to explain policies organisation-wide. However, 77 percent have no formal strategy and 59 percent lack a compliance calendar or reporting plan.
Poole warned: “Pay transparency is a major change for organisations, so communicating it clearly is a key element of the process. While regulatory compliance is the top driver for UK organisations, there is a clear opportunity to align pay transparency with talent attraction, retention and organisational values.”
He emphasised that communication is essential to build trust and ensure employees understand how pay decisions are made. “Without it, even well-intentioned transparency efforts may fall short,” he said.
“With the EU Pay Transparency Directive requiring gender pay gap reporting from 2027, UK employers, especially those with EU operations, will need to act now to build robust, data-driven frameworks.”
