What Pay Transparency Means for Global Industrial Leaders
Understand the challenges facing global industrial and manufacturing companies when it comes to pay transparency, plus Korn Ferry's guide to address them.
Until recently, a large industrial firm might have been considered an outlier for including salary ranges in job postings or disclosing compensation gaps. Not anymore.
“As regulations evolve and employee expectations rise, we’re seeing a clear shift across the global industrial sector,” says Dave Rossi, president of Korn Ferry’s Global Industrial Market.
Pay transparency has shifted from being a strategy that industrial organizations considered optional to one they’re increasingly expected, and sometimes required, to deliver.
However, implementing pay transparency in large industrial firms, such as manufacturing, aerospace, and automotive, can be challenging.
“You’re often dealing with unionized plant employees as well as salaried professionals like specialized engineers and corporate leadership, all under one roof,” says Rossi. Because of the different types of pay structures, a “one-size-fits-all" pay transparency model doesn't work for these types of organizations.
Industrial and manufacturing leaders must typically navigate:
- Operating environments that are unionized and highly regulated, and have distinct wage floors and labor agreements
- Layered pay structures that include shift premiums, safety‑linked bonuses, and plant‑profit‑sharing mechanisms
- Compensation variability across sites, driven by local operating conditions
at a glance
These levels of complexity make standardizing salary bands or ranges across regions and countries complex for global industrial organizations.
In fact, 57 percent of industrial and manufacturing leaders told us in a recent survey they weren’t highly confident that pay decisions are consistent and equitable in their organizations. That means a majority are exposed to pay equity gaps, putting firms at risk of losing key talent.
“Job grading is really important in this sector because if you're going to be transparent about it, you have to understand which jobs are different but equivalent,” says Rossi.
That's why job architecture is the baseline for pay transparency, whether it's for compliance or other reasons.
So where should large industrial organizations start with pay transparency? Read our full guide below.
What Is Pay Transparency?
Pay transparency is the practice of making employee compensation information accessible to employees, candidates, the government, or even the public.
How that’s interpreted varies widely. For example, a company might:
- Include salary ranges in job postings
- Share pay bands and how raises are determined
- Allow employees to know what others in similar roles earn
- Publish the salaries of senior leaders
- Provide pay information for all staff to regulatory authorities
Why Is Pay Transparency Important?
The goal is to improve pay equity, which is broadly defined as equal pay for equal types of work.
But 57 percent of executives in a recent Korn Ferry survey admitted that they aren't sure that their pay decisions are equitable across similar roles.
Pay equity is vital to building a culture of trust and fairness. And today, more employees, shareholders, and governments are demanding pay equity and pay transparency implementation.
Pay transparency laws are now being rolled out around the world to enforce the issue. That’s because, despite decades-old equal pay legislation in many countries, significant pay disparities still exist.
For example, the US Equal Pay Act of 1963 was meant to ensure that men and women performing equal work received equal pay. Yet, more than 60 years later, gender pay gap data shows that women working in salaried, full-time roles in the US were paid only 82.7 percent as much as men.
What Are the New Pay Transparency Laws?
To try to address the gender pay gap, dozens of governments across the world have brought in or are developing a mix of pay equity (equal pay) and pay transparency (disclosure/reporting) laws, often bundled together or evolving in stages.
In some cases, the laws extend beyond gender reporting into other factors, such as ethnicity, disability, and sexuality. Below are some key regions with pay transparency laws.
What Are the Risks and Benefits of Pay Transparency?
Whether you’re legally required to enact pay transparency or not, the reality is that doing so can give you a strategic advantage. But there are notable pay transparency risks to consider.
While the benefits of pay transparency are significant, implementation sometimes can be a bumpy ride. Leaders and managers have valid concerns about pay transparency that need to be addressed before proceeding.
So what are the pros and cons of pay transparency? And how does pay transparency work in practice?
Benefits of Pay Transparency
Improves brand reputation
When candidates and employees can see how pay decisions are made, they’re less likely to perceive disparities as discriminatory. This helps with your brand reputation, improving your ability to attract and retain top talent.
Helps ensure fairness
Providing visibility into how compensation is determined, such as pay scales or compensation frameworks, can be a powerful way to show that your organization values fairness. This is particularly true if you have a clear plan to address any identifiable pay inequities.
Builds employee trust and productivity
When employees can see that their compensation is based on objective criteria, they’re more likely to trust their employers. This positively impacts productivity.
Attracts and retains talent with transparent compensation
Organizations that embrace pay transparency are viewed as more attractive, particularly by younger generations who prioritize openness and social responsibility.
Employees who feel that their compensation is competitive and equitable will stay with the organization longer.
How Pay Transparency Supports Talent Strategy
A Guide to Fair Pay: Attract Top Talent with Pay Transparency
Explore our pay transparency guide to learn how to implement fair pay, build trust, and attract top talent through fair compensation practices.
Pay Transparency Risks and How to Manage Them
Pay transparency can strengthen trust and fairness at work—but rolling it out without a clear strategy can create unintended challenges. Here are some common risks and how to manage them.
How to Implement Pay Transparency
Putting pay transparency into action isn’t a quick job. Here’s a step-by-step roadmap.
Steps to Implement Pay Transparency in Your Organization
- Audit Your Current Pay Practices
- A pay equity audit involves evaluating your existing reward strategy, structure, and processes to uncover hidden disparities and inconsistencies.
- Assess job sizing, grading, leveling, and pay policy so you can address issues prior to formal reporting or communications.
- Align Salary Transparency with Company Values
- Ensure transparency efforts reflect your company's core values and principles.
- Help leaders define what fair and transparent pay looks like in practice so there’s a shared understanding before decisions are made.
- Leverage Pay Tools and Resources
- Use analytic pay tools and leverage external benchmarking data to inform workforce planning, job architecture, and pay structures.
- Create clear and consistent compensation opportunities across the organization.
- Build a Transparency-Ready Job Architecture
- To develop a transparent job architecture, standardize roles, titles, and levels across the organization to ensure consistency and comparability.
- Link roles, skills, and progression to pay so decisions are clear, consistent, and easy to explain.
- Develop a Transparent Communication Strategy
- To foster a culture of trust and openness, inform employees about new frameworks and practices, as well as the reasoning behind them.
- Remember that clarity and consistency are key.
- Enable Managers to Have Compensation Discussions
- Give managers pay insights to help them understand the big picture, including how and why pay frameworks have been developed.
- Train managers how to have confident, open, and respectful pay and performance discussions with their teams.
- Create Employee Compensation Feedback Channels
- Establish channels for upward feedback and ongoing employee input, questions, and concerns regarding compensation.
- Encourage an environment of open dialogue, promptly address any issues raised, and be willing to refine practices accordingly.
- Monitor and Adapt
- Develop a clear pay transparency checklist to be sure your strategy is progressing as planned.
- Continuously assess and refine your pay transparency initiatives as needed.
The Path to Pay Transparency
Need more clarity? Our all-in-one guide to implementing pay transparency sets out a clear process to implementation.
And our expert-led webinar, It Pays to Plan: A Strategic Roadmap for Pay Transparency, discusses how transparent compensation practices can drive fairness, trust, and organizational success.
Implementing pay transparency isn’t just about compliance. It’s a powerful strategic tool to enhance employee engagement, improve brand reputation, and attract and retain talent.
As the movement toward transparency reshapes the workplace landscape, now is the time to act.
Why Korn Ferry for Industrial?
No one understands industrial talent like we do. Our expertise spans advanced manufacturing, energy, infrastructure, supply chain, and logistics.
We go beyond hiring to help industrial organizations build high-performing teams—from plant leadership and operations to engineering, digital, and supply chain roles. Our work is informed by real-time market data, reflecting the realities of automation, decarbonization, and global supply chain transformation.
That’s why leading industrial companies trust Korn Ferry to drive performance and sustainable growth.
Turning Pay Transparency into a Strategic Advantage
Evolving regulations may have sparked the pay transparency conversation for many global industrial firms, but it is fast becoming more than a compliance issue.
In many union-represented environments, pay is already structured and governed by collective agreement. Now there’s increasing pressure on organizations to extend and explain transparency across non-union and salaried roles as well.
At the same time, workforce mobility across plants and regions is raising expectations as industrial company employees carry pay transparency norms between markets.
Now is the time to act. By meshing transparency with your talent strategy, you can meet rising global industrial sector expectations, explain pay more effectively across complex workforces, and strengthen trust and engagement.
Get in Touch
Find out how Korn Ferry’s Industrial and Manufacturing teams can help you with pay transparency.
