How to Prepare for Pay Equity Conversations with Employees & Leadership

When it comes to compensation, and specifically conversations surrounding pay equity and pay transparency, the stakes and emotions are high for everyone involved. CFOs and employee breadwinners alike must weigh their income against expenses, stick to their budgets, and make financial plans for the present and future. But compared to C-level executives, it’s employees who are usually on the receiving end of compensation decisions without much insight or influence into how those decisions are being made.

“Am I being paid fairly?” is an important question that becomes more pressing when times are tough, and HR is tasked with answering it properly. Ideally, this includes coordinating with leadership on pay equity initiatives, then training managers to help the organization convey the right information in the best way possible. When successful, HR’s efforts bridge the communication divide between the boardroom and employees’ kitchen tables, effectively aligning everyone’s expectations and protecting the company’s investment in talent.

That responsibility is a stressful one for HR, but you don’t have to go it alone. We’re here to help you confidently and capably discuss pay equity and pay transparency with everyone at your company, from executives and managers to entry-level employees. Keep reading to learn more about the three essential first steps to pay equity conversations:

• Understanding how your employees currently feel about compensation
• Laying out a solid compensation plan you can lean on going forward
• Plugging into expert-led conversations that are already happening

Uncover how your employees really feel

Organizationally, the biggest hurdles to pay equity and pay transparency are a lack of understanding and communication. When you understand how your employees feel about compensation, you can build a plan that’s tailored to their needs—and your company’s.

Your route for finding these answers can include engagement surveys, HR data and reporting, and one-on-ones with individual employees, but it’s also useful to keep an eye on overall industry and market trends.

In our 2025 compensation trends report, we discovered that a significant percentage of employees are dissatisfied with their earnings, and most would at least consider quitting if they found a better-paying job.

• The majority (77%) of employees would consider leaving their current job for a higher salary, an increase from 2024.
• 39% of women harbor negative feelings about their financial remuneration, compared to 27% of men.
• For the second year in a row, two in five salaried workers haven't received a salary increase in the past 12 months.

Lead with a solid compensation strategy

Even amid growing backlash to diversity, equity, and inclusion (DEI) efforts, employees still expect pay to feel fair, understandable, and rooted in trust. At the same time, pay transparency legislation continues to expand—raising the stakes for organizations to get compensation right, not just legally, but culturally.

Considering many employees would leave for higher pay (77%), and more than half (60%) of job seekers rule out employers who aren’t transparent about salary, having a solid compensation strategy is a critical part of attracting and retaining top talent.

A well-crafted compensation plan should also reflect your company mission, values, and strategic objectives; HR and other leaders must be transparent about all the elements of the plan to gain employees' trust and commitment.

Just as important, compensation is one of the clearest ways company values show up in day-to-day employee experience, and by extension, in your employer brand. When your mission, vision, and values are clearly defined, using that same language to explain how and why you pay people the way you do builds alignment across leadership, HR, and employees alike. Done well, compensation strategy becomes more than an HR initiative—it becomes a trust-building tool that reinforces culture, engagement, and long-term retention.

Understand the relevant laws and regulation

As pay transparency laws rapidly evolve, it’s important for HR and business leaders to familiarize themselves with their legal responsibilities surrounding pay transparency. This can range from bans on asking candidates about salary history to requirements to include pay ranges on job postings. Whatever laws immediately affect your business, it’s a good idea to keep tabs on what’s happening across the nation—and outside of it.

Starting in June 2026, the EU Pay Transparency Directive will reshape how employers share compensation information with candidates. Under this legislation, organizations are expected to introduce pay transparency earlier in the hiring process, giving candidates a clear picture of potential earnings from the start. Every job posting—whether external, internal, or posted on a third-party platform—will need to include a defined pay range so expectations are set upfront.

And like similar compliance-related legislation (like GDPR) the EU Pay Transparency Directive extends well beyond EU-based employers. Any company with employees located in the EU or employment contracts governed by EU law falls under its scope. That means HR teams everywhere may need to rethink how they structure compensation and approach hiring to remain compliant and consistent as transparency standards continue to rise.

When you stay informed and incorporate the intent of pay transparency legislation into a proactive compensation strategy—to improve pay equity for all workers—you can feel confident your bases will be covered now and in the future. You can lean on your plan, lead with it, and return to it as a source of truth for all your future pay conversations.

Find your internal and external support systems

As you work to align with leadership and forge partnerships with other departments to advance your pay equity initiatives, frame your talking points around established organizational objectives, such as culture, retention, and recruiting goals. Adopting a mindset of prioritizing pay equity as a culture keystone will help you build a foundation on common ground with your colleagues.

However overwhelming it may feel to lead the charge on pay equity at your organization, you do have the power to make a difference, and you’re not alone. We’ve created communities and discussion series to drive this message home, and we’d encourage you to prepare for future compensation conversations with the employees and leaders at your company by taking part in expert-led conversations that are already happening.