Pay transparency! About time.

2026 is the year of Pay Transparency, and 94% of companies say they're not ready.

Pay transparency: It turns out that pay gaps are stubborn things, and expecting companies to the right thing without regulatory encouragement will mean a long wait. Left to our own devices, we are more likely introduce pay discrimination on Mars before we solve it on Earth. To those that belittle this as woke nonsense, you can f$$k right off.

Around the world, regulators are gradually passing laws to enforce something that so obviously promotes fairness that one can only wonder what took them so long.

To give it its full name, The EU Directive on Equal Pay and Pay Transparency! If you are looking for an example of slow regulatory progress, this directive is an excellent use case, and many of national implementations have moved at geological pace, but it will start to bite this year. The regulations differ slightly across Europe, thanks to the joys of directive implementation politics, but they essentially require you to report your pay gaps and explain why they exist, and articulate what you are doing to fix those gaps that are discriminatory.

So this is a lot more than just a pay by grade and gender report out of the payroll.

A few years ago we invested in a company in France called Figures, initially providing real time compensation benchmarking. The founder, Virgile Raingeard has immersed himself into the topic of pay equity and has built and his team have built the most comprehensive solution I know to help organizations meet their EU regulatory obligations and do the right thing. The product moves out of beta today and his joy meant I gladly spent my delayed train-ride to Munich writing this post.

He explains more here:

“Mandatory reporting, Rights to information management, Pay Equity audits & remediation scenarios, Salary Bands management: everything needed for companies to be ready, compliant, and equitable...”

To put this in context, have a look at this blog post.

• Most companies exceed compliance thresholds: Analysis of customer data shows 82% of companies have gender pay gaps exceeding the 5% threshold that will trigger mandatory EU action in 2026.

• Regression analysis separates discrimination from legitimate differences: Multiple regression analysis controls for factors like experience, location, and performance to isolate gender’s true impact on pay.

• Manual statistical analysis creates more problems than it solves: Traditional approaches using Excel or custom coding take weeks to complete, require statistical expertise most HR teams lack, and become outdated before results reach leadership.

Solving for this requires a nifty mix of integrations, data wrangling, good old statistics, machine learning and more sophisticated causality statistics. Get me some of that Mann-Whitney U test and median-split analysis. Gen AI helps a bit with turning the stats into something meaningful for managers and HR.

Niche or suite and excel.

Now I’m biased here, (as an investor in Figures and Compa) but today you are very unlikely to be able to effectively comply with the Directive just by relying on the reporting from your core HR system and payroll. You could spend a fortune on consultants with bespoke excel wizardry, but I’d rather you didn’t. HR leaders, check out the work Anita Lettink has done on pay equity, and get a demo from Virgile. It is high time we solved this problem.

To end things, we need a song of course.

It’s 10 years since David Bowie died, so for the next few posts, I’ll be dipping into his magnificent body of work. I’ll start with Life on Mars.