Half of employees do not support salary transparency

Why is pay transparency needed?

According to data from Eurostat, in 2023 the gender pay gap in the EU was on average 12%, and in Hungary it was 17.8%. This is one of the reasons why the EU directive on addressing the gender pay gap and ensuring pay transparency was introduced, which EU member states must transpose into national law by June 7, 2026 (this has not yet been done in Hungary). The main goal of the directive is to ensure that women and men receive the same pay for the same or equivalent work, and that companies must justify any differences based on objective criteria.

Although the directive is a tool focused on reducing gender-based wage discrimination, it has a significant impact on the entire labor market, since in order for companies to meet their aforementioned obligations, they must formulate the job expectations and skills for each position and level, as well as determine the wages and wage bands in a comprehensive wage structure.

Support for wage transparency in the domestic labor market is low

A comprehensive research by Profession.hu and PwC Hungary revealed that 15.5% of companies have not heard of the wage transparency directive at all, and only one in ten is aware of its details. Yet everyone will soon need this, as companies will also be required to report on the gender pay gap; In the first round – by June 7, 2027 – companies employing at least 150 people must declare their wage differences within the company, which must also take into account the data from 2026.

“75% of companies said they would not support wage transparency: eight out of ten employers cited the emerging tension as the primary reason for this, 45% fear the flexibility of wage setting, and 38% believe that the publicity of wage data could pose a competitive disadvantage in retaining their employees. Surprisingly, support is not clear among employees either: 51% oppose the publicity of wages. They primarily view salaries as a private matter, and they are most afraid of malicious gossip in the corridors and a deteriorating workplace atmosphere with the introduction of transparency”

– said Blanka Dencső, a market research and product development expert at Profession.hu.

We will still not know each other’s individual salaries

Companies must also take into account their obligations towards employees: in addition to informing them of the additional rights they have acquired with the directive, they must also ensure that they receive information and understandable information about their individual salary level and the average salary level of those performing the same or equivalent work, broken down by gender.

“One of the biggest misconceptions and fears is also related to this: from now on, everyone will know how much they earn. However, the directive does not require individual salaries, but an objective, transparent salary structure. Wage transparency and the obligation to provide information do not mean that salaries must be published by name. It encourages the development of a transparent system that in which decision-makers can compare and thus arrange positions in a hierarchy based on objective, gender-neutral factors (e.g. responsibility, expertise, working conditions), so that employees can also see what expectations are attached to each job level. Regarding wages, employees will have the right to find out where their wages stand in comparison to the average wages of women and men doing work of equal value to them, so they will not see individual wages, but only aggregated averages, but this will already be a big step forward compared to the current situation.”

– said Gönczi Gyöngyi, Head of HR and Organization at PwC Head of Development Consulting Team.

Indicating salary ranges can bring in up to 50% more applicants

The recruitment and selection process will also be transformed along the Pay Transparency Directive, as companies can no longer ask about candidates’ current or previous salaries, but according to the directive’s provisions, they will be obliged to inform job applicants about the salaries or salary ranges available for the given position before the job interview (or, if that is not possible, before concluding the employment contract), in order to ensure a well-founded and transparent negotiation about remuneration.

The importance of salary indication is also supported by the fact that in the case of advertisements indicating the expected salary range, more than 75% of employees decide to send an application based on the salary information indicated in the advertisements, however, 57% of companies still never provided salaries in their advertisements, and only 12% said they do so regularly.

“It is noticeable that the domestic practice is not yet mature, but more and more employers are recognizing the benefits of providing salary information. While 3-4 years ago the percentage of salaries appearing in advertisements was close to zero, today in the blue-collar segment we are talking about a ratio of about 40 percent, and on average we find salary information in about 20 percent of job advertisements. According to our experience, indicating salaries can bring in 20-25% more applicants on average, but there are sectors where this can reach even 50-60%”

– highlighted Imre Tüzes, Commercial Director of Profession.hu.

Education remains key to retention

The survey found that many companies fear that making salary data public will lead to turnover (37%) and job hunting (34%), as employees can more easily compare salaries and assume they are paid better elsewhere in the market.

However, this process can be prevented with proper employee education and communication, as employee uncertainty often stems from a lack of information: one in ten employees said that the salary system was complex for them and that they did not receive enough information to interpret it. If companies make these structures transparent, employee tension and the frequency of misunderstandings can also be reduced.