3R Strategy’s latest Global Salary Planning Report provides valuable insights into salary trends and pay practices across 40+ countries and 20+ industries. As organisations navigate evolving regulations like the EU Pay Transparency Directive, the report’s findings highlight both progress and areas for improvement in pay transparency and equity.
Pay Increases for 2025
It was interesting to see that most countries reported pay increases either less than or equal to those awarded in 2024.
In 2023, UK inflation fell to 6.3%, while the median pay increase budget remained at 5%. This year’s survey reports a median pay budget of 3.5% for 2025.
With UK inflation at 2.2% (August 2024), this means many employees are set to see their pay rise at a higher rate than inflation for the first time since the pandemic.
Publishing Salary Ranges
Our survey also revealed that despite 68% of participating organisations having salary ranges, only 26% publish them for employees in at least some countries.
The EU Pay Transparency Directive, which will be enforced by June 2026, requires organisations in member states to provide pay information to employees and job seekers. Employers must share information on how pay is set, and managed and how it progresses in the organisation. But, our finding suggests that over 74% of organisations are not yet prepared for this level of transparency.
However, there is some improvement in this number when it comes to hiring practices as 66% do display pay ranges on job adverts.
This practice aligns with the Directive, which aims to ensure fair and equal pay. Although, nearly a third of organisations still do not comply, potentially missing out on attracting a wider pool of candidates.
Job Evaluation Processes
We found that 39% of organisations don’t have a job evaluation scheme in place—demonstrating a significant gap in meeting EU requirements.
The EU Pay Transparency Directive emphasises the importance of objective, gender-neutral job evaluation criteria. However, having a job evaluation scheme offers many benefits beyond compliance. It provides a foundation for fair and transparent pay practices, aids in identifying and addressing pay equity issues, and supports strategic workforce planning.
Transparent Recruitment
Unfortunately, our Global Salary Planning Report shows that 51% of organisations still ask for candidates’ current salaries during the recruitment process in at least some countries.
Not only can this maintain or widen existing pay gaps, but the EU Pay Transparency Directive explicitly prohibits employers from asking job applicants about their pay history.
This provision aims to break the cycle of pay discrimination:
- Past salaries may reflect discriminatory practices or undervaluation of certain roles in other organisations.
- Some candidates may be more confident than others, meaning their pay is determined by their ability to negotiate, rather than their capabilities, skills or experience.
Gender Pay Gap Reporting
A relatively small percentage (28%) of organisations are calculating and reporting gender pay gaps by job level or grade.
The EU Pay Transparency Directive requires organisations with at least 250 employees to publish information on the pay gap between female and male workers. This reporting must be done annually and include a breakdown by worker category.
Doing so can surface potentially concerning trends that might be hidden in organisation-wide figures. And remember, while it may be mandatory for larger organisations in member states, voluntary reporting provides many benefits for SMEs and organisations in non-EU countries too.
Takeaways From the Global Salary Planning Report
These findings highlight significant gaps between current approaches, best practices and the requirements of the EU Pay Transparency Directive. With this in mind, organisations should begin by:
- Developing clear pay structures and communicating them to employees.
- Implementing gender-neutral job evaluation schemes.
- Revising recruitment practices to focus on the value of the role rather than candidates’ salary history.
- Improving pay gap reporting capabilities and considering voluntary reporting where it is not a legal requirement.
By addressing these areas, organisations can not only ensure compliance but also foster a more equitable and engaged workforce.
If you’d like to talk to someone from our reward team about any of the topics covered by the report, you can get in touch via our website.