As pay transparency regulations come into force globally only half of employers say they are prepared according to Mercer
NEW YORK, February 16, 2026 ─ Mercer, a business of Marsh (NYSE: MRSH) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, today released the results of its Global Pay Transparency Survey, which gathers insights from over 1,600 multinational organizations across 60 markets, highlighting emerging trends, challenges, and opportunities shaping the future of pay transparency worldwide.
Employer preparedness to meet pay transparency compliance requirements increased to nearly 50% in 2025 from 32% in 2024. But while 77% of organizations globally are developing or have developed pay transparency strategies and plans, only 14% have fully implemented their approach throughout their organizations.
Significant regional disparities exist. Employers based in the Nordics, US and Canada are leading in readiness, while employers in the UK, Asia and the Pacific are less prepared. Only 9% of employers based in Europe say their transparency strategy is fully in place, even as the deadline for member states to enact the EU Pay Transparency Directive remains June of this year.
Compliance with laws remains the primary driver for providing pay transparency, with nearly 90% of organizations in the US and Canada, Europe and the UK citing it as a key motivator. Only a little over half of respondents indicated employee engagement (56%) and market competitiveness (55%) as important factors influencing pay transparency.
“While many organizations are focusing on meeting legal requirements, a growing number are embracing pay transparency as a catalyst for meaningful change—as a means to rethink pay design, build clearer pay structures and foster greater trust with employees and candidates,” said Gordon Frost, Mercer’s Global Rewards Solution Leader. “Our models show that when employers invest in a trust-forward pay approach they will see transformative outcomes including reduced turnover, faster recruitment and productivity gains.”
Employees expect fairness and clarity
Employee and candidate expectations for pay transparency are evolving. Mercer’s Inside Employees’ Minds report reveals that employees who perceive their pay as fair are 85% more engaged and 60% more committed. As a result, employers face pressure not only to ensure pay is fair and consistent but also to clearly explain how pay is set, grows, and links to performance and progression.
One area where employers are fully committed to providing pay transparency is in job postings. The disclosure of hiring pay ranges is expected to increase from 60% in 2024 to 94% by the end of 2026. In contrast, companies remain cautious about sharing more sensitive information, such as pay gaps and adjusted pay equity results. Any reporting on pay gaps and equity is largely limited to what regulations require.
Pay transparency is now tied to reputation
Pay transparency is increasingly a critical reputational issue, driven by the ease with which compensation practices can now be compared across employers, locations and sectors through official disclosures, third-party platforms and employee forums. Additionally, regulations like the EU Corporate Sustainability Reporting Directive (CSRD) are bringing pay equity metrics into mainstream corporate reporting.
These pressures make it clear that pay transparency should no longer be treated solely as a compliance matter. Despite this, only 12% of organizations reported that they had established communication protocols to handle public inquiries on pay from external stakeholders, including candidates, media and investors. Organizations that adopt a coherent, enterprise-wide communications approach stand to benefit, while those with inconsistent practices may risk reputational harm.
Stakeholder engagement is critical to building organizational trust
Most companies designate a lead for providing and organizing pay transparency, typically within HR leadership, compensation or specialist reward teams, and often align it with broader HR transformation initiatives. However, broader stakeholder engagement remains limited. While 79% involve HR leadership actively, only 35% engage business leaders, 38% focus on educating managers, and fewer still (13%) conduct employee research.
To build greater trust, organizations must broaden engagement, involving leaders, managers and employees in both the design and communication of pay transparency initiatives.
“As organizations navigate the evolving landscape of pay transparency, those making the most meaningful progress are not necessarily the ones with the largest budgets or most advanced technology,” said Mr. Frost. “Instead, success comes from making deliberate, strategic choices about what transparency should achieve and aligning structures, behaviors and investments accordingly.”
“Leading employers approach pay transparency as a long-term capability, building strong foundations, equipping leaders, leveraging technology thoughtfully, and continuously refining their strategies to build trust and confidence among employees, candidates, regulators, and investors,” he continued.
For organizations ready to advance their pay transparency journey, Mercer offers tailored support—from readiness assessment, roadmap creation and strategy design, to analytics implementation and communication strategies—helping clients turn regulatory requirements into a powerful driver of trust and equity.