Managers aren't ready for the new era of pay transparency

• Key Insight: Discover how pay transparency transforms managerial roles and exposes structural compensation gaps.
• What's at Stake: Inadequate manager readiness risks retention, trust erosion and increased regulatory exposure.
• Forward Look: EU rules and forthcoming U.S. laws will intensify transparency enforcement and reporting demands.
  Source: Bullets generated by AI with editorial review

As more states and municipalities adopt pay transparency laws, most managers remain unequipped to have conversations about compensation.

That was one of the main takeaways from a new survey by global professional services firm Aon, which found that only 8% of managers are "highly ready" for pay transparency conversations. Over half (51%) report low or no readiness. 

Managers already have a lot of pressures and responsibilities, from overseeing day-to-day operations to rolling out new policies, said Steve Guyer, head of rewards and career advisory, North America talent solutions, at Aon.

"They're getting another responsibility added to their plate, and I think that's part of it," he said. 

Aon's 2026 Pay Transparency Pulse Survey, which polled more than 1,000 companies, also asked respondents to identify their biggest risks and concerns about increasing pay transparency. Eighty-four percent pointed to manager readiness, followed by employee dissatisfaction (63%) and cost to implement and remediate gaps (41%). 

Other factors included revealing pay inequities (38%), legal exposure (31%), and data quality issues (31%).

Just over half of respondents publish salary ranges (54%), yet only 42% have formal manager training in place. Another 63% plan to close this gap within the next two years, but until they do, organizations are operating in a window of elevated risk, according to the report. 

"Organizations are in various states of readiness," Guyer said. "Some are still waiting, and others have made some progress on those foundational elements, but they're not quite all the way there to feeling comfortable … and others are ready to go." 

"It's not time to panic," Guyer emphasized. "It's time to have a plan."

An expectation of transparency

More than a dozen states and Washington, D.C., have enacted pay transparency legislation with more expected in the coming year. The trend has also spread to the European Union, where starting in June companies with 100 or more employees will be required to report on gender pay gaps and take action to address them.

Regulation is the main driver behind companies' pay transparency initiatives, with 75% of companies citing legal/regulatory requirements, according to the study. Other factors included talent attraction and retention (13%), employer brand and trust (8%), employee expectations (3%) and executive mandate (1%). 

"A lot of the talent pools now expect some level of transparency from their organization," Guyer said. 

Read more: As pay transparency rules expand, companies scramble to keep up

Despite growing adoption of pay transparency policies, many organizations are still operating without the underlying infrastructure needed to support them. 

According to the survey, 53% of companies have not redesigned their pay structures specifically for transparency, while 42% cite inconsistent job or role data as a primary challenge. These foundational gaps suggest that many organizations are exposing compensation information through systems that were not built to support consistent or comparable pay decisions. 

Additional barriers reinforce the structural strain. Roughly 38% of organizations express concern about revealing pay inequities, 32% report difficulty linking pay with performance and progression, and 31% flag data quality issues as a material risk.

"Let's face it — compensation was a bit of a black box for a lot of organizations," Guyer said. 

However, some proactive companies are turning a compliance requirement into a strategic conversation about salary transparency and how it can build employee trust, Guyer said. "They're using it as yet another retention vehicle for today's workforce," he added.

Guyer encouraged benefit leaders to think more holistically when strategizing about total rewards. 

"Compensation might be the driver in a lot of cases, but the benefits are equally as important in the grand scheme of things," he said. "Benefits are a critical piece to the bigger picture in which we need to be thinking about rewards holistically."