5 Hiring Practices to Banish in 2025 (If You Care About Pay Equity)

Your hiring process directly impacts who you bring on board, what roles they fill and how much you pay them. If you haven’t given it enough attention, it might be causing all sorts of problems related to diversity, equity and inclusion (DEI). 

In this article, we’re breaking down how certain hiring practices can worsen pay equity within an organisation. Read on for five unfair hiring practices to leave behind in the fight for fair and ethical compensation. 

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Why pay equity matters in 2025

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Pay equity is the concept of paying employees equally for the same or similar work. When an organisation’s pay practices are equitable, each employee’s pay is only influenced by objective factors related to their job — and not characteristics like their race or gender. 

Striving for equitable pay is not just the right thing to do — it’s crucial to avoid fines, penalties, and other unpleasant legal consequences. By June 2026, the EU Pay Transparency Directive will be in effect across all 27 EU member states, and employers will be bound by even stricter pay equity requirements. 

Now more than ever, employers need to be sure that their pay decisions are justifiable and based on fair, consistent and gender-neutral criteria. Rethinking your hiring processes is a great place to start.

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5 hiring practices to avoid to improve pay equity 

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Your hiring processes can have a big impact on the overall state of pay equity within your organisation. Rethinking them should be one of your first moves in your quest for pay equity. To help you get started, here are five unfair hiring practices to banish in 2025. 

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1. Asking candidates about their salary history 

According to a 2021 survey, 47% of working adults have been asked about their current or past salary during a job interview. But, while this was once common practice, it’s long been falling out of fashion. 

When employers ask this question, they tend to give lower offers to candidates who have previously been undervalued. This makes it almost impossible for these people to catch up to their peers. And the people who are most likely to be underpaid? Women, people of colour, and candidates from other marginalised groups. 

An alternative is to ask candidates about their salary expectations instead — but employers should be wary of this approach. That’s because employees tend to base their expectations on their current rate of compensation — which means the same problem can occur. The tech giant Apple is currently facing a potential class-action lawsuit in California because of this very practice. 

Here’s what to do instead: 

• Develop competitive compensation packages based on industry benchmarks and your compensation philosophy. 
• Avoid asking candidates about their salary history (reminder: this will soon be illegal in Europe anyway). 
• Tread carefully when asking about salary ‘expectations’ since this can also perpetuate existing pay gaps. 

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2. Hiring employees based on strong ‘potential’

If you’ve ever sat on a hiring committee, you might have heard a colleague say something like, ‘No, they don’t have the experience we wanted… but I think they have potential.’

At first glance, taking a chance on a relatively inexperienced candidate might not seem like a bad thing. But the problem is, defining who does or doesn’t have ‘potential’ isn’t easy. In fact, these judgements are often based on nothing more than bias.

Simply put, candidates are more likely to be hired on ‘potential’ when they look, sound, and present like someone who would excel in the role — while others are expected to prove themselves first. It doesn’t take an expert to see that this is not a good outcome from a DEI perspective. 

Here’s what to do instead: 

• Develop clear, standardised criteria for every role. 
• Use skills-based hiring to identify candidates who may be suitable, even if their experience is limited.  
• Implement blind recruitment techniques to reduce the impact of bias. 

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3. Giving too much weight to ‘culture fit’

Considering whether a candidate will fit in well, work harmoniously with colleagues and contribute to the organisation’s vision is a legitimate part of the hiring process. But employers should avoid focusing too heavily on this over more concrete, measurable factors like the person’s skills and experience.

Often, asking whether or not a candidate is a good ‘cultural fit’ is just another way of asking whether they resemble other people within the organisation. This can actively harm the chances of employees from marginalised groups — especially for higher-level roles. 

Here’s what to do instead: 

• Keep the focus on the candidate’s skills, qualifications and experience. 
• Assemble diverse hiring panels to ensure different points of view are represented. 
• Develop structured interview questions to ensure all candidates are evaluated fairly. 

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4. Keeping pay ranges secret 

It’s an age-old question: should you mention a salary range in the job ad, or is it enough to say you offer ‘competitive salaries’? The reasons for keeping salary under wraps are fairly simple: revealing this information too early could put off qualified candidates and even cause resentment among existing employees. 

But not including this information in your job descriptions can cause a lot of harm, too. Most importantly for our purposes, it gives employers an unfair advantage when it comes to salary negotiations. Certain candidates may undervalue themselves simply because they don’t know what the company is willing to pay for a role — and end up underpaid compared to their colleagues. 

Of course, it’s worth mentioning that employers in Europe will soon have no choice in this matter. Once the EU Pay Transparency Directive is in effect, sharing salary information with candidates before the interview stage will be a legal requirement. 

Here’s what to do instead: 

• Share a pay range with candidates as early as possible (e.g. in the job description). 
• Ensure pay ranges are accurate and narrow enough to be meaningful. 
• Develop set criteria for placing candidates within pay ranges. 

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5. Leaving room for salary negotiations

There’s also an argument that allowing for salary negotiations at all is an unfair hiring practice. These days, the evidence on whether women really do negotiate less than men is somewhat mixed, and a recent study even suggested that the opposite is true. 

However, previous studies have shown that when women do negotiate, they’re both likely to ask for less and less likely to get what they want than their male counterparts. Yet another study found that, while women and men negotiate at the same rate, this is only the case if candidates are explicitly told that negotiation is possible. 

All of that aside, though, it’s important to ask ourselves what purpose salary negotiations actually serve. After all, your job offers should be based on a set of predetermined, concrete and objective criteria, which are applied consistently across your organisation. When you’ve gone to all that work, why muddy the waters by allowing candidates to negotiate? 

Here’s what to do instead: 

• Develop consistent, objective criteria for pay decisions. 
• Be transparent about your compensation packages and pay criteria so candidates know what to expect.
• If you do allow negotiation, tell candidates explicitly that your offer is negotiable. 

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Eliminating unconscious bias in the hiring process

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Let’s be clear: most companies with pay equity problems are not deliberately discriminating against certain employees. But there is still a significant gender pay gap across the EU. And, while it’s less widely studied, there’s also evidence that many countries are battling ethnicity pay gaps, too. 

A lot of this comes down to unconscious bias — which is a notoriously tricky problem to solve. While training may help, it can’t solve the problem on its own. And there’s even evidence that it could make things worse, especially if companies see it as a simple box-ticking exercise. 

The truth is, there’s no one right way to solve unconscious bias in the workplace. But rethinking your hiring processes from a pay equity standpoint is a good place to start. The trick isn’t to eliminate unconscious bias (which would be impossible) but to set up systems and processes in such a way that it doesn’t have an impact on your pay practices. 

For example, that might mean: 

• Setting strict, clear and objective criteria for hiring and pay decisions. 
• Building diverse hiring panels to ensure a range of viewpoints is represented. 
• Being transparent about pay and the criteria that go into pay decisions. 
• Using blind hiring techniques to reduce the impact of bias. 

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The EU Pay Transparency Directive’s impact on hiring processes

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The EU Pay Transparency Directive will soon be in effect across Europe. Once it is, some of the hiring practices on this list will be banned outright. For example, employers will no longer be able to ask candidates about their salary history or keep them in the dark about the starting pay range for a role. 

Others will still be allowed — but employers should still reconsider their hiring practices in light of the directive. That’s because the new rules will require employers to be 100% certain that pay decisions are objective, gender-neutral and justifiable. Basing them on a candidate’s ‘culture fit’, potential, or negotiating skills is unlikely to meet that standard. 

Want to learn more about the pay transparency directive and how it will impact your business? We have plenty more content to explore on this blog. 

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