Do your employees understand your salary bands — or are they shrouded in mystery? These days, more and more companies are adopting open salary bands: pay structures that are partially or fully accessible to employees.
And there’s a good reason for this trend: greater pay transparency can build trust across your workforce, boosting engagement and motivation. It can also help you stay ahead of upcoming legislation like the EU Pay Transparency Directive.
In this article, we’ll explore the practicalities of implementing open salary bands, from the different levels of transparency you could opt for to the benefits of opening up about your salary structure. We’ll also share our top tips to help you navigate the process of introducing open salary bands — which is a big transformation for many organisations.
Choosing the right level of transparency for your organisation
First up, pay transparency doesn’t have to be all or nothing. Some employers might choose to publish every individual employee’s salary for the world to see — while others keep their teams totally in the dark about their pay and the factors behind it.
For most organisations, the sweet spot is somewhere in the middle. Read on for a few different options to help you determine the right level of pay transparency for your organisation.
Option #1: Salary bands are only visible to managers
At this level, only managers have access to the salary structure. Depending on your organisation, they might see just the bands for their own team, or have access to the entire company-wide grid.
Managers should also have a clear understanding of their organisation’s compensation philosophy and processes, since this enables them to confidently answer employee questions about pay and progression. If this is the level of pay transparency you opt for, it’s important to clarify what information they can and can’t share with their teams.
Option #2: Employees can see their own salary band
At this level, employees have visibility into their own salary band and where their current pay sits within it. They also understand the factors that influence pay decisions, such as job level, skills, performance and the outcomes of compensation reviews.
In our view, this level of transparency should be considered the minimum standard for modern organisations. After all, employees may become disengaged if they have reason to believe that their pay is unfair (even if it isn’t). And, as we’ll discuss below, it will soon be necessary to comply with new European legislation.
Option #3: Employees have access to their salary band and the one above
Some employers take things a step further by giving employees visibility into their own salary band, plus the one directly above it. This added transparency helps employees to understand what they need to do to progress within the company. That means it can be a useful strategy for improving retention — particularly when coupled with education and training on your organisation’s compensation philosophy and policies.
Option #4: All salary bands are accessible to every employee
At this level, all employees have a clear understanding of every salary band within the organisation, including the parameters and criteria that apply to each one. An important note: this doesn’t necessarily mean disclosing individual salaries (though some particularly radical companies choose to do so).
This level of transparency should be accompanied by comprehensive training and resources on the company’s compensation philosophy, pay policies and criteria, helping employees to fully understand the context behind their pay packet. While this is the gold standard for open salary bands, it’s important to remember that reaching this level may take time — and may not be feasible at all for some organisations.
The importance of open salary bands in 2025
There’s no denying it: implementing open salary bands is a big risk for an organisation. The goal is to bring any inequities and inconsistencies in your salary structure out into the open — and that can feel very uncomfortable for employers.
Increasing pay transparency also represents a significant cultural shift for the entire organisation, requiring education, training and careful management to navigate the transition. That said, the benefits of pay transparency are substantial — here are a few reasons why so many companies are considering introducing open salary bands in 2025.
Uncovering inequities and inconsistencies
Open salary bands help you stamp out unfair pay practices and fix inequities and inconsistencies that have historically been overlooked. Not only is this the right thing to do in 2025, it can also help you to attract and retain talent — who increasingly want to work for fair, ethical and transparent employers.
Compliance with upcoming legislation
The EU Pay Transparency Directive is fast approaching. And, while it doesn’t require fully open salary bands, it does call for far greater transparency around pay. Once the directive is in effect, employers will have to meet several new obligations, including:
- Disclosing pay ranges in job adverts
- Conducting regular gender pay gap reporting
- Performing pay audits where significant gaps exist
- Providing specific pay info to employees on request
In short, companies will need to get comfortable sharing their compensation philosophy and pay criteria — which must be fair and objective. A transparent, consistent salary band system will make this much easier.
Improved employee motivation and retention
Open salary bands help employees understand the progression paths available to them — and what’s expected at each level. This can boost motivation by giving employees a clear sense of how they can grow within the organisation.
Ultimately, this can strengthen retention and improve motivation and performance, since employees are more likely to be invested in their work if they see a future with your company. For managers, transparent salary bands provide a helpful framework for guiding discussions around performance and development.
Enhanced employer branding and reputation
Today’s employees want to work for companies that are fair and ethical in the way they treat their teams — and open salary bands are a clear way to demonstrate that commitment.
By showcasing your consistent, transparent pay practices, you can strengthen your employer brand and stand out from the competition — making it easier to attract top talent. Over time, this can also lead to greater employee loyalty and advocacy, helping to build a strong, values-driven culture.
So, what’s the catch?
As discussed, there are a lot of advantages to open salary bands — but there are some downsides too. Here are some of the key challenges employers should be aware of:
- Discomfort and resistance: Open salary bands can lead to awkward conversations and emotional reactions, especially if employees discover they're underpaid compared to peers.
- Loss of negotiation leverage: More pay transparency limits flexibility in making competitive offers to top talent who might expect above-band salaries.
- Increased scrutiny: When salaries are transparent, every pay decision is more visible. While this is ultimately a good thing, it does require extra documentation and justification from managers and HR.
- Potential for misinterpretation: Without the right education or resources, employees may assume they should be earning the top of their band, regardless of their experience, performance or tenure.
How to implement open salary bands: our top tips
Implementing open salary bands requires careful planning. Here are some key tips to help you navigate the process.
Get your structure and processes in line
Opening up your salary bands will inevitably bring inequities and inconsistencies into the open — that’s the whole point, after all. However, most companies aren’t ready to simply unveil their existing structures without first ensuring they’re fair and consistent.
Before sharing your pay structure, take time to conduct pay equity audits, refine your compensation philosophy and policies and reassess your job categorisation systems. You can read more about the process of getting ready for pay transparency in our Pay Transparency Checklist (updated for 2025).
Start small and iterate from there
Introducing pay transparency is a significant cultural shift for both employers and employees. And going from totally secret pay structures to 100% transparency overnight usually isn’t possible.
Instead, start small. For example, you could begin by giving each employee access to their own salary band and providing an opportunity to discuss it with their manager. This phased approach allows you to ease into the transition while giving everyone time to adjust.
Explain the context first
Before overwhelming your teams with information, it’s important to provide them with the context behind the numbers they’ll eventually see. For example, consider running training sessions on your company’s compensation philosophy, policies, processes and pay criteria to ensure everyone understands the bigger picture.
Self-service resources explaining key concepts such as salary bands, salary ranges and compensation reviews can help employees feel more informed. Additionally, offering training on the EU Pay Transparency Directive itself will help employees to understand what it is, why it exists and how it will impact your organisation.
Deliver thorough training to managers
When employees have questions about their pay or the company’s compensation philosophy, they’re more likely to approach their manager than go straight to HR. That’s why manager training is crucial to the success of your open salary bands.
In addition to your overall compensation philosophy and policies, managers should have a clear understanding of the level of pay transparency your organisation has chosen, including what they can and can’t share with employees. They should also understand how your organisation’s responsibilities will change under the EU Pay Transparency Directive.
Create your salary bands with Figures
Before you can share your salary bands with anyone, you need to know they’re in top shape. Building salary bands used to be a long, manual process. But tools like Figures make it easy to create scalable, customised bands in a matter of minutes — then tailor them to your exact needs and preferences.
Want to learn more? Explore Figures’ salary band tool or sign up for a free demo to see it in action.
