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Forbes
a day ago
- Business
- Forbes
What The EU Pay Transparency Directive Really Means For Day-To-Day Work
Hayley Bakker is the Head of Customer Journey & Digital Enablement at beqom, which supports pay equity with data-driven software. The EU Pay Transparency Directive, formally adopted in 2023, is a landmark law aiming to ensure that workers of all genders receive equal pay for work of equal value. It applies to EU-based companies with 100 or more employees and focuses on two key areas: pay transparency and pay equity. But this is more than a regulatory shift. It's a cultural one. Provisions like the right to know salary ranges, mandatory gender pay gap reporting and bans on asking about previous salaries are meant to close the gender pay gap. But beyond compliance, what does this mean for day-to-day work, employee-manager conversations and internal pay systems? Here's how these changes impact every level of an organization. 1. Employees Gain Visibility And Empowerment For employees, the most noticeable change is access to information. The directive gives them the right to request average pay levels for their job category, broken down by gender. Employers must publish salary ranges in job postings and be clear about pay progression criteria. This transparency shifts the balance of power and changes how employees approach hiring, promotions and salary discussions. Take Anna, a marketing manager who's spent five years at a tech firm in Madrid. She sees that her company's posted a replacement position, similar to her role. The posting includes a salary range, and when comparing this to her own pay, Anna realizes she's being significantly underpaid. When her next one-on-one with her manager arrives, she confidently raises the issue. This type of conversation might not have happened before. Transparency empowers employees to ask informed questions and expect informed answers. 2. Managers Have A New Level Of Accountability Managers must be ready to address tougher, more-informed compensation questions. Pay conversations can't be vague or take place once a year. Under the directive, managers are now accountable for fairness in pay decisions and must justify compensation using objective factors like role scope, performance and internal bands. Managers must become fluent in pay principles. For example, when Anna asks Daniel, her manager, why her salary is below the midpoint of the posted range, he can't give a generic answer. He needs to have a clear, policy-aligned explanation. Responses like 'That's just what we offered' are no longer sufficient. Companies must train managers to speak factually and consistently about compensation—or risk losing trust and talent. 3. HR Business Partners Are Coaches For Fair Pay HR business partners (HRBPs) play a vital role in turning pay policies into fair, everyday decisions. Part of their responsibility is coaching managers before pay reviews, guiding them through pay policies and helping identify bias in decisions. HRBPs also run pre-review checks to flag pay decisions that don't align with policy. For instance, at the tech firm where Anna and Daniel work, John is the HRBP who conducts department-wide compensation audits ahead of a pay cycle. He works to identify employee pay outliers that need justification or adjustment, and he helps managers like Daniel either explain or correct discrepancies. It's not just about fixing problems. It's about promoting intentional, defendable decision-making and embedding fairness in daily practices. 4. Compensation And Pay Equity Teams Drive Data-Backed Action The directive requires companies with more than 100 employees to report gender pay gaps. If gaps exceed 5%, then companies must conduct joint pay assessments. So, compensation and pay equity teams will be playing a much more visible role in the future. These professionals must develop grading systems, track analytics and guide corrective actions. For example, Lisa is a pay equity lead at the tech firm. She's created dashboards to show unexplained pay differences by gender and job. It's a tool that helps HRBPs and managers quickly spot and resolve inconsistencies. When a manager proposes a raise, they can see how it fits within internal pay equity models, ensuring fairness in real time. In a world where employees can ask, 'Why am I paid this?' having credible, data-backed answers is essential. 5. Leaders Set The Tone For Championing Transparency Executive leadership must actively model transparency and equity. That means setting clear pay equity goals, investing in tools and training across departments and speaking openly about pay structures and criteria. Some companies are already publishing pay equity goals and hosting internal Q&As where leaders explain pay philosophy and criteria. Others are working with consultants to understand their gaps and improve systems. When leaders are visible in these efforts, pay transparency becomes a shared value—not just a legal obligation. Compliance Is Just The Start The EU Pay Transparency Directive takes full effect in June 2026. But the opportunity lies in using it to lead a cultural transformation. Successful organizations won't just post salary ranges. They'll train managers, empower employees and build systems that support fair, consistent and data-driven pay decisions. Transparency isn't about revealing decisions. It's about standing behind them. Is your organization ready? Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?
Forbes
25-06-2025
- Business
- Forbes
EEO-1 Compliance And The Future Of Equity At Work
Hayley Bakker is the Head of Customer Journey & Digital Enablement at beqom, which supports pay equity with data-driven software. As the political winds shift, so too do the compliance and operational landscapes for U.S. employers. The new administration has initiated an extensive rollback of DEI initiatives across federal agencies and institutions that receive federal funding. Similar efforts are underway in many states, with laws banning certain types of DEI training, affirmative action in hiring and even demographic tracking beyond what is federally mandated. This has created a challenge for organizations to remain in compliance with the Equal Employment Opportunity Commission (EEOC)'s EEO-1 reporting requirement. A Refresher On The EEO-1 Report The EEOC mandates that private employers with 100 or more employees, as well as certain federal contractors with more than 50 employees, must submit annual demographic workforce data categorized by race/ethnicity, gender and job category. With this information, the EEOC can better enforce Title VII of the Civil Rights Act by identifying systemic discrimination and promoting equal employment opportunity. Because of this requirement, many employers bolstered their internal DEI programs as both a strategic and a compliance-focused initiative. Efforts often included more rigorous data collection practices, internal audits, the creation of employee resource groups (ERGs), pay equity analyses and cultural competency training. Initiatives like these helped organizations comply with reporting requirements and proactively address gaps before they became liabilities. In essence, DEI wasn't just about optics; it was a risk mitigation tool. While the EEO-1 report remains a legal requirement, the infrastructure that many organizations built to support it is now in a precarious position. HR and compliance leaders face a dilemma as pressure increases to scale back or eliminate DEI teams. The question they're forced to ask themselves is whether they can uphold the spirit of antidiscrimination laws and adhere to federal reporting requirements in an environment that's increasingly hostile to the very practices that make it possible. 5 Strategies For Walking This Tightrope To maintain commitment to equitable practices while navigating legislative shifts, HR leaders can adopt these strategies. One of the most effective strategies for minimizing pushback on internal DEI work is framing it as a function of risk management, not a statement of ideological alignment. Emphasize that demographic reporting, internal audits and equitable pay structures are core elements of compliance, governance and fiduciary responsibility. A common objection to the concept of diversity comes from the assumption that it's a way to privilege one group over another. Replacing common DEI terminology with things like 'workforce analytics,' 'fair employment practices' or 'inclusive leadership' can reduce scrutiny of your efforts to maintain fair practices. In communications, focus on the intended outcomes, like broadening talent pools and more structured criteria for performance evaluation and compensation. While DEI departments may shrink, the need for informed leadership is greater than ever. Brief boards and executive teams on the legal mandates that remain in place, the risks of noncompliance and the expectations of employees and the market they operate in. Leadership can then share the mandate to related teams to continue the equity- and compliance-related components. Even amid shifting federal policies, transparency expectations from employees, investors and customers remain high. It's a key aspect of building and retaining trust. Implementing robust internal systems that track demographic and compensation data will ensure continuity in reporting, whether it's for EEO-1, ESG disclosures or shareholder requirements. Finally, the most effective approach to demonstrate antidiscrimination is having well-documented and enforced hiring, performance, promotion and firing practices in place. Design them to accommodate auditable decision-making and to demonstrate that due process was followed, based on objective factors. Looking Ahead Though the political climate may be hostile to DEI initiatives, the legal, business and reputational imperatives for equity and transparency aren't going away. In fact, with the launch of new pay transparency regulations and renewed scrutiny on corporate practices, the role of workforce analytics and equitable HR processes may grow in importance. As HR leaders, the task isn't to abandon the principles of equity and inclusion but to adapt how you frame and operationalize them. The path forward will require legal savvy, data literacy and a steady commitment to building a fair workplace. We must always ask ourselves, "What kind of workplaces do we want to build?" and remember that having the right processes and systems is foundational for achieving our goals. Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?
Forbes
19-05-2025
- Business
- Forbes
19 Ways Companies Can Adopt Genuinely Meaningful DEI Practices
Getty Diversity, equity and inclusion (DEI) efforts are under increasing scrutiny—especially when they appear superficial or insincere. To build lasting trust and drive real impact, companies must ensure that DEI initiatives are thoughtfully integrated into their culture and operations. Authenticity, transparency and measurable actions are key to moving beyond tokenism. To help you achieve this, Forbes Human Resources Council members share practical strategies for ensuring your organization's DEI efforts are genuine, effective and sustainable. Companies can avoid DEI initiatives being perceived as tokenistic by ensuring they are not. DEI should have measurable business goals and systemic policies and processes across its value chain. Without embedding DEI—or a concrete action plan to do so—in hiring, performance, promotion, compensation, customer services and supplier engagement, they should not engage in public DEI initiatives. - Hayley Bakker , beqom To ensure DEI initiatives are genuine rather than performative, companies must commit to meaningful, long-term efforts that reflect their core values and objectives. DEI should not be a check-the-box exercise—instead, it must be deeply embedded in the organization's culture and practices, shaping policies, leadership decisions and everyday interactions. - Thalia Rodriguez , Tase Creative Solutions Creating a diverse and inclusive workplace that works for everyone should never be placed into the separate "initiatives" box—it is a fundamental contributor to organizations delivering on their business outcomes. In my view, DEI practices are enablers for driving value for colleagues and consumers. To sidestep performative action, consider how DEI-related actions drive better business outcomes. - Charlotte Sweeney OBE , Charlotte Sweeney Associates (CSA) 4. Focus On DEI's Impact And Profitability Organizations should focus on measurable impact and profitability to move beyond superficial DEI efforts. DEI must be integrated across all business functions, not in a separate initiative. Leadership should promote transparency and open communication about goals and track progress rigorously. This approach will ensure all employees feel valued and respected. - Kevin Walters , Top DEI Consulting 5. Focus On Making New Hires Feel Welcome Stop relying on artificial metrics and overthought processes that feel robotic and focus on what would make a new hire actually feel welcome. For example, implement a policy that says two people doing the same job will always be paid within 10% of each other. DEI does not have to be complicated or feel unnatural. The test is that your people feel supported, respected and included. Listen to them to improve. - Jason Elkin , EQUALS TRUE Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify? 6. Transition DEI From HR To The C-Suite DEI must transition from an HR initiative to a business priority led by the COO, CFO or CIO. Its success must be directly measured and rewarded, integrating it with leadership engagement, compensation and the ESG framework. We must shift our focus from visible representation to improving recruitment, retention and advancement policies and processes, preventing employee isolation. - Chandran Fernando , Matrix360 Inc. 7. Make DEI Part Of The Company's DNA DEI needs to be part of the company's DNA and a value. If it is a strategy only, it is easy to shift focus to other, more important strategies and initiatives, cut budgets or reallocate resources. If it is a value and woven into how the company operates, then it is part of how decisions are made. Diversity of thought and experience becomes part of the DNA. - Oksana Lukash , People, Culture, You 8. Create An Inclusive Culture DEI shouldn't be an initiative. Having an inclusive culture where everyone feels valued and that they belong should be foundational to your organization's mission, vision and values. There's lots of data that supports that DEI as a way of being and working drives business performance. It must be owned, championed and clarified by senior leadership to take root and thrive. - Meg Wheaton , Heidrick & Struggles 9. Commit To The Purpose Companies must commit to the purpose of DEI and the ethical, cultural and business drivers that identified a very real need. Companies need all of their employees to be engaged, unafraid and fully participate in the company's goals. Start with a discussion about the company's goals and its talent philosophy to ensure that the system is built to support those goals. - Sonia Vora , Brytr Inc. 10. Don't Sideline DEI Into Workshops DEI isn't a PR play—it's a performance driver. When it's sidelined into workshops and pledges, it feels tokenistic. When it shapes who gets hired, promoted and heard, it builds cultures where talent thrives. Inclusion isn't charity—it's strategy. Ditch the optics. Embed the outcomes. That's what an authentic culture and people who thrive in it expect. - Prithvi Singh Shergill , Tomorrow @entomo 11. Incorporate DEI Into Your Overall Strategy The key is embedding DEI into business strategy, not side projects. Tie goals to measurable outcomes, involve leadership visibly and amplify diverse voices in decision-making. Authentic DEI is lived daily, not launched in campaigns. Transparency, accountability and action are what shift DEI from performative to powerful. - Ankita Singh , Relevance Lab 12. Rely On Your Mission Statement And Values With the evolution of DEI that is taking place, organizations must approach their communications (both internal and external) thoughtfully. Return to mission statements and values as a guiding North Star. - Caitlin MacGregor , Plum 13. Embed DEI Organically Throughout The Employee Lifecycle One factor that contributed to the backlash was that some initiatives came across as performative or tokenistic, such as DEI quotas. Focus instead on building sustainable infrastructure that supports diverse, inclusive experiences across the employee lifecycle—embedded organically in hiring, onboarding and throughout the entire employee lifecycle. - Shiran Danoch , Informed Decisions 14. Foster Unity, Respect And Understanding DEI was never meant to be performative or tokenistic—many organizations utilized their programs as a way to infuse inclusion and collaboration as we returned to the new normal after Covid and several divisive events in the world. The idea is to have unity, respect and understanding for each other—irrespective of our differences. - Nakisha Dixon , Helios HR LLC 15. Make DEI Part Of Daily Operations To avoid performative DEI, companies must embed equity into daily operations—hiring, leadership, pay and culture. Transparency, measurable goals and authentic storytelling from diverse voices build trust. DEI isn't a campaign—it's a commitment demonstrated through consistent, accountable actions. - CJ Eason , 16. Conduct External Audits Conduct and publish frequent external audits. Make sure no country hires local nationals beyond a majority of their workforce. All the overseas international candidates should be asked to give feedback on their hiring process. Train all key leaders on DEI, what it means in today's world and its impact in various global scenarios. - Ashutosh Labroo , SuccessionIQ 17. Guide The Right Expertise To The Right Work You don't need to lead with labels to effectively serve all talent communities. When organizations focus on guiding the right expertise to the right bodies of work—and ensure that all individuals, regardless of background, have access to opportunity—they naturally create more equitable and inclusive environments. - Britton Bloch , Navy Federal 18. Weave Inclusion Into Everything You Do Want to avoid performative DEI? Do what you should've been doing all along: bake systemic inclusion into everything you do. Hiring, promotions, team norms and product design—make it part of the fabric of your company, not a press release. Real change doesn't need a spotlight. It just needs consistency. - Tracy Cote , Slickdeals 19. Avoid Superficial Actions And Standalone Efforts To make DEI initiatives meaningful, companies must embed them into core business strategies, not treat them as standalone efforts. Avoid superficial actions like a one-off training or symbolic gestures and focus on systemic change. Transparent, authentic communication about efforts, challenges and progress builds trust, ensuring DEI isn't performative but a true commitment to inclusivity. - Stephanie Manzelli , Employ Inc.
