Did you know (as a business leader) that the EU Pay Transparency Directive (palkka-avoimuusdirektiivi) will change the European labour market in 2026?
It won’t be just another HR regulation. It’s a societal turning point designed to increase fairness, close the gender pay gap, and bring pay out of the shadows.
It will also impact your company’s attractiveness as a potential employer. The sooner you take advantage of this transparency and trust builder, the more competitive advantage it can create for your business.
The EU Pay Transparency Directive In Short
At its core, the directive (Directive (EU) 2023/970) ensures that every employee and jobseeker within the EU has a right to understand how salaries are determined.
It also obliges employers to be open about salary levels, ban salary-history questions, and report pay gaps that exceed a 5% threshold — explaining and correcting them when necessary.
Finland is preparing to implement the directive in May 2026, using the national income register (Tulorekisteri) to support reporting and reduce administrative burden. Non-compliance could lead to fines of up to €80,000, but the real risk is reputational.
From Compliance to Competitive Advantage
According to a report put together by a company called Benifex, only half of employers say they’re ready for the directive, while another 44% have a plan but haven’t yet acted. Yet younger generations already expect pay transparency, even without legal pressure. Some candidates simply won’t apply if a job advert doesn’t include a salary range.
So, waiting for 2026 isn’t just risky. It’s old-fashioned.
Companies that move early to embrace transparency gain more than compliance. They gain trust. And trust is the foundation of any strong employer brand.
When an organisation shows that it treats employees fairly, communicates openly, and takes accountability for its pay structures, it sends a powerful signal: we live our values. That’s a far more magnetic message than “we comply with regulation.”
Why Transparency Builds Employer Brand Trust
Trust and transparency have always been two sides of the same employer branding coin. Candidates want to know if they can rely on your promises. Employees want to feel safe speaking up, asking questions, and building their careers in your organisation.
When you communicate pay ranges, explain how pay is determined, and remove secrecy from your processes, you:
- Signal fairness – your actions show equality, not just your policies.
- Strengthen engagement – people are more committed when they believe they’re treated justly.
- Attract modern talent – younger professionals equate transparency with modern leadership and authentic culture.
According to global studies such as Adobe’s Future Workforce Report and Mercer’s Global Pay Transparency Report, pay transparency directly increases engagement, loyalty, and employer trust. Employees who believe they are paid fairly are 85% more engaged and 60% more loyal.
Finland’s Approach to Palkka-avoimuusdirektiivi: What to Expect
Finland will adopt the directive’s minimum requirements and add a local twist:
- Employers must include salary ranges or a starting salary in all recruitment processes.
- Questions about candidates’ previous pay are prohibited.
- Employees have the right to request gender-segregated pay data for equivalent roles once a year.
- Companies with 100 or more employees must report pay gaps and act if unjustified differences exceed 5%.
All employers, regardless of size, must clearly communicate how pay is set and how progression works. This means every Finnish company needs to define its pay philosophy, document it, and share it with employees.
Listen to this Lähtijät-podcast episode on: ”Palkka-avoimuus tulee, oletko valmis?”
How Early Adopters Win With The EU Pay Transparency Directive
While others scramble to meet legal deadlines, forward-thinking companies are already integrating pay transparency into their employer branding narratives.
Here’s what that looks like in practice:
- Proactive communication: Explaining your pay philosophy in career pages, internal portals, and social content demonstrates confidence and credibility.
- Modern recruitment messaging: Listing salary ranges signals respect for candidates’ time and expectations.
- Storytelling with purpose: Sharing your journey towards pay equality showcases leadership and cultural maturity.
- Culture reinforcement: When your people understand how pay is decided, internal trust grows and gossip declines.
Every employer brand is built on perception.
By acting early, you’re shaping that perception before your competitors even start.
In a world where transparency equals modernity, the brands that lead will shine brighter and attract the kind of talent that expects nothing less.
A Moment for Modern Leadership
As EU Parliamentarian Kira Marie Peter-Hansen, one of the key negotiators behind the directive, said:
“If we are against this, what are we really protecting? Probably our pay gaps and thus the injustices they represent.”
That sentiment captures the heart of modern employer branding. The most magnetic organisations don’t protect old systems; they transform them.
By preparing now for the Palkka-avoimuusdirektiivi, your organisation demonstrates courage, transparency, and equality; the very qualities today’s workforce wants from its leaders.
The EU Pay Transparency Directive isn’t just a regulatory milestone; it’s an employer branding revolution.
By embedding transparency into your communication, storytelling, and HR processes today, you:
- Strengthen trust internally and externally.
- Increase your attractiveness to top talent.
- Future-proof your employer brand before the competition.
Transparency has always been the language of trust. Now it’s also the law, and the smartest brands are already fluent.
Download Benifex’s guide to using fair pay as a strategic advantage here >
Contact Susanna to get a plan on how to turn this directive into a competitive advantage >
