Skip to content 
Article by Evi Gkini – LPEA.
On April 29th, the Luxembourg Private Equity & Venture Capital Association (LPEA), in collaboration with its HR, PE4W, and ESG working groups, hosted a roundtable on the EU Pay Transparency Directive. The event brought together HR leaders, legal experts, and industry professionals to explore the real-world implications of the directive through six parallel discussions—each examining a different dimension of this evolving landscape.
The directive, set to take effect in 2026, is already prompting organisations to rethink pay structures, communication strategies, and cultural expectations. A clear message emerged from the day: this is not just about compliance—it’s about transformation.
Below you can find the conclusions of each of the roundtables:
Pay transparency: one message, a thousand interpretations
This discussion highlighted that pay transparency is as much about communication as it is about compliance. Participants explored how to share pay-related information in a way that is fair, consistent, and tailored to different audiences—from employees to leadership.
There was a shared concern that disclosing salary ranges might lead candidates to focus on the highest numbers, making it important to link pay to clear job architecture. Some firms have introduced grading systems, though their application remains uneven. Internal disparities between long-serving employees and recent hires further complicate the picture and call for careful, transparent communication.
Many organisations have started preparing by mapping roles and collecting data, though most have not yet moved toward full disclosure. In some markets, where confidentiality is still the norm, the shift to transparency is particularly delicate.
Participants noted that the lack of legal clarity around implementation timelines adds complexity, especially for companies operating across multiple jurisdictions. At the same time, macro trends—such as AI, offshoring, and a competitive labor market—are putting added pressure on compensation strategies.
Despite these challenges, organisations are taking early steps to align internally, raise awareness, and prepare leaders for a more transparent future. The process may be gradual, but the shift is clearly underway.
From compliance to impact: a constraint or an opportunity?
This roundtable explored how transparency can move beyond a legal obligation to become a strategic advantage. Participants identified multiple opportunities: strengthening employer branding, appealing to younger generations, reducing early-career turnover, and boosting internal trust. The directive was also seen as a chance to modernise compensation, promotion, and performance frameworks.
However, several challenges were raised. Legal uncertainty is slowing progress, with some companies hesitant to launch initiatives before national transposition is complete. Others expressed concern about investing in systems or data analysis that may later need to be revised. In some environments, the directive still feels distant—especially where pay discrimination is not widely perceived.
The group discussed the importance of readiness. Initial steps include mapping employee categories, running internal pay gap analyses, clarifying performance criteria, and documenting how gaps are addressed. Companies should also prepare their communication strategies in advance to avoid confusion or mistrust once data becomes public.
Cultural mindset, cost-benefit analysis, and peer pressure were also part of the discussion. Some companies are debating whether to take a reactive or proactive approach—responding only when asked, or sharing data openly. Participants acknowledged that once competitors begin disclosing, others may follow suit to protect their reputation.
Ultimately, the message was that the directive’s impact will reach well beyond pay reporting. It will affect the full employee lifecycle—from recruitment to performance reviews—and requires buy-in and preparation across the business.
The algorithm of pay gaps: when data reveals more than expected
This group discussed how the new reporting obligations might reveal more than anticipated—highlighting unconscious bias, systemic imbalances, and hidden inconsistencies in pay structures. Participants noted that gender and racial disparities can emerge not only in salary but also in bonuses, promotions, and job classifications.
Biases may also show up in how experience and performance are evaluated. Some roles may be historically undervalued, and assessments may still rely on subjective criteria. A lack of oversight during interviews—such as inappropriate questions about previous salaries or family plans—can introduce bias at the hiring stage.
Participants found value in examples like the UK practice of showing salary ranges, which may reduce negotiation inequalities and support fairer hiring processes. They also discussed the importance of looking beyond salary alone. Flexibility, professional development, and non-salary benefits are increasingly important, especially for younger generations—though, as noted, “money still matters.”
The group raised concerns about the accuracy of public data from platforms like Glassdoor and stressed the need for companies to build their own job classifications and pay structures internally. Particular challenges were identified around bonus systems that favor male-dominated roles, and how to align salaries post-maternity leave. Promoting equal parental leave was seen as one way to support gender equity.
Differences across sectors and company sizes also came up. Larger companies and those governed by collective agreements are often better prepared for transparency. In contrast, fast-moving industries like tech may face added difficulty due to varied and evolving role structures.
The ethics of transparency: does too much information kill performance?
This discussion focused on how far companies should go with transparency and where to draw the line between openness and privacy. Participants agreed that trust increases when pay decisions are based on clearly communicated criteria—like experience, responsibility, and contribution. When transparency lacks context, it can harm morale and team cohesion.
The importance of explaining why differences in pay exist—not just what the numbers are—was emphasized. Companies are encouraged to focus on transparency about process rather than full disclosure of figures. Setting clear performance expectations, offering regular feedback, and implementing structured review systems were seen as crucial.
Psychological and cultural factors also influence how pay fairness is perceived. Employees’ views are shaped by their relationships with managers, personal confidence, and visibility in the organisation. Tools like 360-degree feedback and anonymous surveys were recommended to improve consistency and reduce bias in evaluations.
Smaller companies, or those without external benchmarks, were recognised as having unique challenges. But even in such cases, participants stressed the importance of setting internal reference points and communicating transparently about what drives pay decisions.
The domino effect on competitiveness: between transparency and the talent war
This table discussed how pay transparency intersects with competitiveness and talent strategy. Participants pointed out that while the directive may help modernise pay systems and attract talent, it also introduces complexities—especially for SMEs.
Areas of legal ambiguity such as reporting on discretionary bonuses, freelance compensation, or historical data were seen as barriers to early implementation. Companies with limited HR capacity may struggle to balance compliance with other strategic needs.
Despite this, the group agreed that transparency can support a stronger employer brand, reduce internal politics, and better align with the values of younger generations. Embedding transparency into a company’s EVP (Employee Value Proposition) can help retain employees—provided that communication is well managed.
Participants emphasised the need to move from tenure-based pay to performance- and skills-based models. While this shift may take time, it is essential to avoid new perceptions of unfairness under increased scrutiny.
Concerns were raised about how transparency might affect internal equity, particularly for long-tenured employees with indexed pay. Addressing these concerns will require recalibrating job architecture and building consistent evaluation frameworks.
When pay equity disrupts corporate culture: how far to go?
The final discussion looked at how pay transparency might disrupt existing workplace cultures. In sectors where discretion is a long-standing norm, transparency may be met with resistance or confusion. Participants noted that transparency could reduce internal competition, especially when advancement appears to be tied to fixed categories rather than individual contribution.
Recruitment dynamics could also shift. With salary data more visible, negotiations may become more intense, especially when trying to align perceived value with actual experience. Questions were raised about how to compare local and international experience and how to define “fair” in a global context.
The group discussed whether employers might start redesigning roles or adjusting hiring practices to manage internal equity without broad salary increases. They also noted the importance of developing clear salary policies that include benefits and incentives—allowing room to recognise and reward high performers.
Participants emphasised that the transition requires strong leadership and early communication. HR cannot manage the change alone—legal, finance, and leadership must be involved. While cultural differences will affect how transparency is welcomed, ongoing dialogue and consistent messaging were seen as key.
Conclusion
The LPEA roundtables came to a clear conclusion: the EU Pay Transparency Directive is not just about compliance—it’s about redefining how companies approach fairness, equity, and talent management. The process may be complex, but those who begin early and communicate transparently will be better positioned for success.
To continue this important conversation, LPEA plans to reconvene in one year—bringing the community together again to reflect on progress and how the landscape has evolved.
We warmly thank all participants for their trust and openness during the discussions. Special thanks to our moderators and note takers:
Sonja Becker – Zortify, Galaxy Mayani – Carne, Sandrine Muller – Deloitte, Marie-Cecile Legrand – Deloitte, Laura Zahren – KPMG, Sabrina Bonnet –KPMG, Manon Aubry – RSM, Marie Bodson – Marliere & Partners, Lilia Amico – Deloitte, Oana Butnariu – Marliere & Partners, Sophia Karlsson – Zortify, Annie Burton – LHH Recruitment, and Gilles Dall’Agnol – A&O Shearman, who opened the event with a clear overview of the directive.
