Organizational Transformation
7 Reasons Companies Still Hesitate on Pay Transparency
Many organizations support pay transparency in principle but delay action. Common barriers reveal what true readiness for openness requires.
November 24, 2025
Pay Transparency: Why Some Companies Are Lagging Behind
Across industries and around the world, pay transparency is becoming mainstream. What began as a compliance requirement in multiple countries and U.S. states has become a global movement, driven by employee expectations, evolving workforce dynamics, and the pursuit of equity.
Yet many organizations still hesitate. They recognize that transparency is coming, but they haven’t operationalized it.
“When we ask them why, a lot of them say they support transparency in principle—just not yet,” says Tom McMullen, who leads Korn Ferry’s U.S. pay equity practice.
Their reasons can look like resistance but tend to point to the same challenge: readiness. Even leaders who believe in pay transparency may not feel fully prepared to act.
Here are some of the most common reasons organizations hesitate on pay transparency, and what those reasons reveal about what readiness work still lies ahead.
1 Fear of Exposure
Many organizations know they have inconsistencies in pay, and transparency makes inequities visible, says McMullen.
Companies are concerned that sharing pay ranges or making pay more visible could trigger some uncomfortable questions, like “Why is my role paid less than that one?” or “How can two people with similar responsibilities at the same workplace be on different pay ranges?”
"They're questions that can only be answered confidently when the underlying systems are clear and defensible,” says McMullen. “Until then, many organizations delay transparency rather than risk exposing flaws.”
But Korn Ferry’s client experience shows that the longer inequities stay hidden, the more they erode trust. The employers that thrive with transparency confront the gaps, fix what needs fixing, and communicate their improvement journey openly.
2 Weak Foundations and Poor Data
Many organizations still rely on a fragmented or outdated pay infrastructure—things like inconsistent job architectures, obsolete pay ranges, and incomplete benchmarking data.
Without reliable data and clearly defined role structures, transparency can backfire. Disclosing ranges that don’t reflect reality confuses employees and undermines the organization’s credibility.
“It also invites unnecessary scrutiny,” says McMullen. “Business leaders know this, and it’s holding some of them back.”
A critical step in moving towards transparency is cleaning up your foundation. What does that look like?
- Refreshing your market data
- Clarifying your job levels
- Tightening up your compensation administration practices
- Reviewing internal equity
In other words, make sure your house is in order before opening the front door.
3 Cultural Resistance
For decades, pay has been treated as a sensitive topic discussed behind closed doors.
“A lot of today’s leaders built their careers in cultures where discretion equaled professionalism,” says McMullen. “That history doesn’t change overnight.” Transparency can challenge deeply held beliefs about hierarchy, privacy, and control.
In organizations where openness is not yet part of the culture, pay transparency can feel risky. Leaders may worry it will create tension or conflict instead of trust.
But what we see at Korn Ferry is that employees tend to equate clarity with fairness. When people understand how decisions are made, they’re more likely to accept outcomes—even if those outcomes aren’t what they hoped for.
This isn’t resistance—it’s a readiness issue rooted in culture. Organizations that turn transparency into an advantage are those that build openness into everyday practices.
“They treat it as a foundation for engagement and trust rather than a threat to management control,” says McMullen.
4 Unprepared Managers
Even when data and systems are sound, some organizations hold back because they know their managers aren’t ready for pay transparency.
“Pay conversations demand a different level of confidence and clarity than most managers have been trained for,” says McMullen. “Leaders know that if managers stumble in those discussions, it can do more harm than good.”
Until managers feel comfortable explaining how pay is determined and how employees can grow their pay, transparency can feel risky. For many organizations, that’s reason enough to wait.
5 Leadership Misalignment
Picture it: the leadership team gathers to discuss pay transparency, and everyone agrees that it matters.
But as the details surface, the conversation evolves:
- Finance worries about cost implications.
- Legal focuses on compliance risks.
- Business leaders fear employee reactions.
- HR pushes for progress but struggles to gain consensus.
With competing priorities and mixed risk tolerance, leadership teams often hesitate to move forward. “When there isn’t shared ownership, decisions stall, and transparency efforts tend to lose momentum,” says McMullen.
Organizations that turn transparency into an advantage start by aligning their leaders, anchoring around a shared belief that openness strengthens trust and credibility. They communicate with one voice, framing transparency as a business imperative, not an HR experiment.
6 Fear of Competitive Disadvantage
“I don’t want our competitors to know our salary ranges.”
This is a concern many leaders raise around pay transparency, and it isn't unfounded. Making pay data more visible feels like it's giving the competition a glimpse into your structure, and some may indeed try to use it to target talent.
Yet in practice, few organizations lose their edge because of transparency. Competitors may see the numbers, but that doesn't mean they can replicate how your rewards connect to culture, performance, or growth opportunities.
7 Change Fatigue and Competing Priorities
Even organizations that believe in transparency can struggle to make it a priority. With competing pressures—digital transformation, hybrid work, DE&I initiatives, cost control—leaders sometimes decide there’s simply no bandwidth left for another major initiative.
It's often not disagreement that slows progress but exhaustion. HR teams may acknowledge the need yet lack the capacity or attention to move it forward. As a result, transparency often stays on the “important but not urgent” list until a compliance deadline forces action.
Moving Forward with Pay Transparency
The hesitation is real—but so is the opportunity. For organizations ready to move ahead, progress starts with an honest assessment.
- Is our pay data accurate and defensible?
- Are our leaders aligned on the purpose of transparency?
- Are our managers equipped to communicate confidently?
- Do our culture and systems support open dialogue?
The goal is to approach transparency thoughtfully and build the foundations that make it sustainable. When organizations take the time to do that, transparency becomes a trust builder, not a risk.
Learn more in our on-demand webinar, Pay Transparency: From Transparency to Trust.
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