Are your employees ready to learn what their colleagues make? The pay transparency movement is gaining a firmer foothold in corporate America, and it’s not just the result of regulatory pressures.
That’s the upshot of a recent survey conducted by British insurance brokerage Willis Towers Watson. In a survey of 388 firms in the U.S., 82% of respondents said they’re “either communicating, planning or considering communicating individual pay ranges with employees.” About three-quarters said they’re doing the same for external job candidates.
The survey found that 39% of respondents are currently communicating individual pay ranges with employees, while 13% plan to do so.
That comes as at least a dozen states and Washington, D.C., have passed laws mandating companies disclose pay or pay ranges. Overseas, the European Union has passed similar legislation. In WTW’s survey, 72% of respondents cited “growing regulatory requirements” among their reasons for changing how they talk about pay. Yet 44% said they’re making changes due to “company values and culture,” and 41% said it’s due to employee expectations.
For WTW researchers, the diversity of reasons for disclosing pay points to a “broader cultural shift,” said Lindsay Wiggins, the firm’s North America pay equity co-leader, in a news release.
“Companies recognize that increased pay transparency is becoming a new reality that can support their employer brand and build competitive advantage in the talent market,” she said. “To prepare for this, there are some essential fundamentals that companies need to get right, including robust job and rewards structures, and objective HR policies and processes to ensure the delivery of equal pay.”
As part of a wider international survey, WTW also queried a total of 1,900 businesses around the globe. Notably, the share of total respondents who said they were communicating, planning or considering sharing pay was just 67%.
That’s not to say American companies have embraced all aspects of pay transparency. WTW’s research showed that less than half of respondents “share how individual base pay is determined and progresses.” Fewer still (39%) share how pay ranges are designed and managed.
Respondents in the survey also seemed to understand the potential unintended consequences of pay transparency moves. Seventy percent believe sharing pay ranges with employees will result in “significant questions about compensation from managers,” and 68% said they expect the same from employees. Just about half (53%) expect more pay negotiations.
In an email to CFO.com, Wiggins acknowledged that disclosing pay can cause tension among employees. “However, organizations with well-designed, consistently executed and clearly communicated pay programs are better positioned to mitigate these concerns,” she said. “Issues often arise when pay governance is weak — for example, when employees are paid below the minimum of their pay range or when new hires receive higher compensation than long-tenured employees in similar roles.”
The pay transparency debate underscores the importance of collaboration between finance teams and HR teams. “Maintaining transparent pay structures requires robust processes, data management and clear communication strategies,” wrote Kenton Bell, managing consultant USA at HireIQ, in an op-ed earlier this year. “CFOs must work closely with HR teams to ensure accurate and consistent salary disclosures.”
The European Union’s upcoming Pay Transparency Directive, which will become effective across all member states beginning June 2026, is another area where HR teams and finance teams will need to work closely together, primarily for American businesses with global operations. The legislation “significantly expands the definition of pay, requiring employers to report not only base salary but also all forms of compensation — including variable pay, bonuses, pensions, insurance and other benefits,” Wiggins said in her email.
The EU’s law will also require employers to take corrective action to fix gender pay gaps of 5% or more within six months of being identified. “This short timeframe places pressure on organizations to act swiftly, making it essential for CFOs and HR leaders to allocate budget and resources in advance to address potential pay disparities,” Wiggins added.
Though WTW’s survey suggested many American businesses are either already disclosing pay or quickly moving to do so, similar studies have shown conflicting conclusions. In another June survey of 1,400 businesses around the globe, Aon found just 19% of respondents were ready for pay transparency. Among North American respondents, 25% said they were ready, while 16% said they’re not ready.
