Defining Work of Equal Value: Why Job Titles Are Not Enough

We’re not afraid to admit it: we’re slightly obsessed with the EU Pay Transparency Directive. And for good reason: this piece of legislation will fundamentally change the way employers across Europe handle compensation. 

You can read about the specific requirements the directive will introduce in our full guide, but they’re ultimately all focused on one goal: ensuring equal pay for work of equal value. 

Here’s the million-dollar question, though: what does this actually mean? For example, do employers need to make sure that all employees with the title ‘engineer’ receive the same pay? 

Clearly, this would be crazy. After all, one job title can encompass a range of different roles, each with their own skill level, responsibilities, working conditions and more. And the opposite is also true: some employees perform effectively the same role, even though their title is different. 

In this article, we’ll discuss why relying on job titles alone is not enough to comply with the directive — and what employers should do instead. 

What is work of equal value?

Under the Pay Transparency Directive, each employer will be responsible for defining what ‘work of equal value’ means to them — and they must be able to justify their decisions. The directive suggests taking into account things like: 

• Skills: The experience, knowledge and qualifications required for the role 
• Effort: The mental or physical exertion needed to perform the role
• Responsibility: The level of accountability and decision-making involved
• Working conditions: The physical risks associated with the position

Clearly, it’s not just about job titles. Once the directive is in effect, employers will need reliable methods of evaluating and classifying jobs to understand which roles are of equal value to their organisation. 

Why relying on job titles alone is a bad idea 

When it comes to defining work of equal value, it’s tempting to use job titles as a shortcut. After all, they provide a quick, easily understandable way to categorise roles. 

And at first glance, it seems like a fair assumption that two people with the same title are probably doing the same job. Job titles are also already documented in your org chart and HR systems and accepted by the entire organisation. 

But job titles can also be misleading — and relying on them alone for equal pay classifications can lead to big problems for an organisation. Here are three of the biggest problems with using job titles to define work of equal value. 

1. Job titles are often inconsistent 

While job titles may seem like a convenient basis for pay comparisons, they’re often applied inconsistently across an organisation. This can be broken down into two main scenarios: 

• Same job, different title: For example, a ‘marketing specialist’ in one department might have very similar duties to a ‘marketing coordinator’ in another. Even though these two employees have different titles, their roles are clearly of equal value — and your compensation structure should reflect this.
• Same title, different job: Some employers use generalised titles like ‘engineer’ or even ‘director’ without fully defining what these terms mean. Often, these titles are used very differently across different departments. And, since they fail to capture the varying requirements and responsibility levels attached to each role, they’re not very useful for internal comparisons. 

Standardising job titles across departments can help make them more consistent. However, they’re still probably not enough to fully define which roles are truly comparable. 

2. Job titles may be outdated

Job titles often stem from historical decisions, departmental conventions or negotiations during the hiring process. But they rarely provide an accurate picture of a role’s complexity, responsibility level and specialised skill requirements. 

It’s also very common for roles to change over time, with employees picking up extra responsibilities and shifting priorities without a change in job title. That means that an employee’s job title may not necessarily be reflective of their current role. Using titles alone for pay comparisons with other employees is therefore not a very effective approach. 

3. Job titles won’t stand up in court

The Pay Transparency Directive includes a shift of the burden of proof in pay discrimination cases from the employee to the employer. Simply put, employers will need to be able to show that any pay discrepancies are not due to discriminatory practices, but backed up by a clear decision-making process.

Companies are free to use whatever criteria they choose to make pay decisions, as long as they’re fair, objective and consistent. However, paying one employee differently from another simply because their job title is different — even though their actual role is substantially similar — is unlikely to hold up in court. 

What to do instead: how to evaluate jobs fairly

Job titles serve important organisational and career development purposes — there’s no need to do away with them altogether. However, we’d recommend taking them out of the equation when it comes to evaluating jobs for the purpose of defining work of equal value. 

This allows you to be more objective as you consider what each role actually looks like, taking into account things like the level of responsibility, impact on organisational objectives and the skills and qualifications required for the role. 

You’re also free to consider other factors that are relevant to your business — the key is to focus on the substance of the work being performed, not arbitrary and potentially outdated factors like job titles. 

Specific job evaluation methods to consider 

Having a formal job evaluation system in place — and applying it consistently across the organisation — can help companies to meet the demands of the EU Pay Transparency Directive. While employers are free to design their own job evaluation systems, there are several established methodologies that could make things easier. 

For example, here are a few existing frameworks you might want to consider:

• Point-factor method: This is a common approach to job evaluation that involves assigning points to different job characteristics such as skills, responsibilities, effort and working conditions. At the end of the process, each role is given an overall score, which is used to determine its value and compare it to other positions. 
• Ranking method: The ranking method (also known as paired comparison) involves taking pairs of roles and determining which one is the most impactful. This creates an overall ranking of different jobs based on their importance and seniority. It’s worth noting that this method is likely too simplistic for larger businesses. 
• Job classification: Job classification involves ranking jobs based on a predetermined system that takes into account things like the scope of responsibility, skill level and seniority of each role. A simple example of an organisation using this method is the army, which has ranks like private, corporal and general. In a business, ranks might include C-Suite, VP, director, manager and coordinator. 
• Market pricing method: This method involves assigning each role a value based on market rates for comparable positions. It typically involves benchmarking salaries against a salary survey (or using a tool like Figures for real-time market comparisons). This approach ensures compensation is externally competitive, but doesn’t necessarily reflect each job’s impact on the organisation. That means it may be too simplistic for large or complex companies.

All of these methods have their pros and cons, and what’s right for one organisation may not necessarily work for another. What’s important is to find a system that works for your business — and then apply it consistently across the organisation. 

How fair job evaluation helps pay transparency

These days, more and more companies are taking a more transparent approach to pay. And that’s not just because of new laws like the Pay Transparency Directive, but also because it’s what today’s employees want. 

Increasing transparency around pay shows employees that you care about paying them fairly, which helps to build trust and good will. Over time, this can lead to improved morale and even increased employee satisfaction and retention. 

But pay transparency isn’t just about sharing numbers — it’s also about ensuring each employee understands the reasoning behind their pay. Having a clear job architecture (and applying it consistently) helps employees see how their role fits in with the rest of the organisation and understand the different factors impacting their compensation. 

How to prepare for the Pay Transparency Directive

Like it or not, the Pay Transparency Directive is quickly approaching — and employers need to be prepared. To help you get ready for the upcoming changes, we’ve put together a comprehensive pay transparency checklist. 

The checklist is based on insights from our conversations with numerous compensation experts and labour law specialists, and newly updated for 2025. In short, it provides you with everything your company needs to ensure you’re ready to face the Pay Transparency Directive head on. 

Want to learn more? Download your free copy of our pay transparency checklist today.