Across Europe, the conversation around pay equity is accelerating. With the EU Pay Transparency Directive approaching and expectations rising among candidates and employees, companies are realizing that compliance alone is not enough.
True fair pay requires structure, strategy, leadership, and culture — and this is where the combination of technology and advisory becomes essential.
The Power of Software and Advisory Combined
By Pihr & The Reward Firm
In this joint perspective, Pihr and The Reward Firm outline how organisations can move beyond compliance and build fair, sustainable pay practices.
The landscape is shifting — fast
The European talent market is changing quickly. Jobseekers now expect salary ranges, compensation details, and a clear pay philosophy already at the application stage.
“Salary secrecy is becoming a thing of the past,” says Morten Broekner from The Reward Firm. “Candidates know it’s unethical to ask for their current salary. Clear expectations on both sides are what matter.”
This shift increases pressure on employers to define how they structure, communicate, and justify pay decisions.
Morten Broekner, Executive Reward Advisor at The Reward Firm
The biggest challenge: making transparency a business advantage
Many organisations understand the legislation — but fewer know how to turn transparency into a competitive advantage. Common challenges include:
- Defining a credible Pay Promise that balances fairness and competitiveness.
- Maintaining a sustainable cost base by reallocating pay fairly without increasing spend.
- Leadership readiness, as leaders make most pay decisions.
- Linking pay to performance, which is often the weakest part of the reward process.
- Cultural transformation, including unlearning outdated assumptions about pay.
“Fair pay is deeply cultural,” says Morten Broekner. “If leaders don’t understand the new philosophy and how pay should evolve, transparency efforts fall apart”, Morten continues.
Fair pay goes further than equal pay
Equal pay is the baseline — fair pay is broader and directly tied to trust.
"Fair pay builds trust", says Morten Broekner. “Applying the right pay-setting principles, and being open about what employees can expect, is what creates long-term credibility.”
Organisations that aim only for compliance risk missing the true value: stronger employer reputation, better engagement, and increased retention.
Why data is not enough — structure is everything
Many HR teams technically have the necessary data but still struggle to use it effectively. The Reward Firm highlights three root causes:
- Poor data quality — outdated job architectures or inconsistent performance evaluations.
- Low data availability — fragmented systems and manual processes.
- Limited analytical capability — difficulty combining job structure, performance, and pay in a meaningful way.
Even with full datasets, many organisations lack sufficient comparable employees across job level, job family, location, and performance levels to run robust analytics.
How technology turns complexity into clarity
Technology is critical for achieving consistency and structure in pay equity work.
“Rule-based equal pay analysis helps organisations identify practical, person-level pay inconsistencies — both below and above salary ranges,” says Morten Broekner. “Fairness must start with each individual employee.”
Pihr’s platform is designed to support this structure.
“For companies to truly move beyond compliance, technology and advisory have to work hand in hand,” says Yalda Zohrehnejad, Head of Partnerships at Pihr.
“Software delivers the structure and consistency that legislation demands, while advisory ensures context and long-term change. That combination enables sustainable fair pay.”
Automation, data quality checks and clear pay structures give organisations a strong foundation, but the transformation requires more.
Yalda Zohrehnejad, Head of Partnerships at Pihr
Where advisory support makes the difference
Software cannot replace the strategic and cultural work needed for real fairness. Advisory support is especially valuable in:
- Defining a modern, credible Reward Philosophy
- Translating it into governance and guidelines
- Training leaders to apply fair Pay decisions
- Embedding fairness into performance evaluation, hiring, and promotion
This is where companies make the leap from compliance to long-term culture change.
Building fair pay into leadership and culture
Since leaders make nearly all pay decisions, equipping them is essential. The Reward Firm emphasises:
- Leaders must understand why reward philosophy is changing
- They need structure for setting pay at hiring and over time
- Transparent, fair performance evaluation must be in place
- HR must support leaders through communication and training
Without this, fair pay remains an HR initiative instead of an organisational transformation.
What defines the leaders of tomorrow?
Organisations that achieve real fairness — not just compliance — will be those that:
- Treat fair pay as a cultural commitment, not a reporting task
- Replace outdated pay norms with consistent, transparent principles
- Maintain alignment and consistency across leaders
- Combine structured technology with expert advisory
“Exceptions are poison to cultural change,” says Morten Broekner. Consistency builds trust in a transparent labour market.
The way forward
Fair pay is becoming a defining marker of employer credibility and long-term business success.
Together, Pihr and The Reward Firm help organisations combine rule-based technology with advisory expertise — empowering them to meet compliance demands today while building a culture of fairness that lasts.
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