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Pay transparency is moving rapidly up the agenda for reward leaders. Alongside growing regulatory pressure, organisations are asking practical questions: how prepared are we, what will be required, and how do we equip managers to handle more open conversations about pay?

These themes were explored in a recent masterclass, where Gethin Nadin, Chief Innovation Officer at Benifex, spoke with Konstantinos Karavidas, Global Head of Reward at Ingka Group (IKEA). The discussion offered a grounded look at how IKEA is approaching pay transparency in practice.

Rather than treating transparency as a compliance burden, IKEA’s experience shows how it can be introduced progressively: by strengthening foundations, improving communication, and building confidence across the organisation.

Crucially, the focus goes beyond regulation. When implemented well, pay transparency can strengthen trust, support career development, and foster a more open culture around reward.

Understanding the regulatory landscape

The , introduced in 2023, will come into force across Member States by June 2026. While it does not directly apply in the UK, its influence is already being felt.

Each country is implementing the Directive differently, creating a complex and evolving compliance picture for multinational organisations. As a result, many UK employers are proactively reviewing their approach, anticipating that similar expectations may emerge domestically.

Seven practical lessons from IKEA

1. Benefits are often where inconsistencies sit

One of IKEA’s early observations was that benefits—while highly valued—were the least consistent part of their reward offering. Managed locally rather than centrally, they were harder to compare across markets and often poorly understood by employees.

By bringing benefits into a broader total reward framework, IKEA is working to create greater consistency and visibility.

2. Managers play a critical role in pay transparency

IKEA placed managers at the centre of pay conversations, recognising that they are the primary point of contact for employees.

This meant investing in manager capability: helping them understand pay decisions, interpret data, and communicate clearly and confidently.

3. Simplicity strengthens understanding

Rather than relying on complex frameworks, IKEA focuses on two core factors:

• Competence
• Performance

This clarity makes it easier for employees to understand how pay decisions are made and reduces the risk of confusion.

4. Transparency requires context, not just visibility

Making pay visible is only part of the story. Employees also need to understand:

• The full value of their total reward
• Why decisions have been made
• How they can influence future outcomes

Without this context, transparency can create more questions than it answers.

5. Fairness is shaped by explanation

Greater transparency inevitably highlights differences in pay. What matters is whether those differences are clearly explained.

By linking pay to factors such as experience, capability and role scope, IKEA focuses on helping employees understand both the rationale and the pathway for progression.

6. This is about more than compliance

For IKEA, pay transparency is not simply about meeting regulatory requirements. It’s part of a broader ambition to improve fairness and employee experience.

Compliance sets the baseline but the real value lies in building trust and strengthening culture.

7. Progress matters more than perfection

Achieving full alignment across data, structures and markets is rarely realistic at the outset. IKEA’s approach acknowledges this.

Rather than waiting for perfect conditions, the focus has been on improving clarity and understanding over time, taking practical steps forward while continuing to evolve.

A practical path forward

Pay transparency can feel complex, particularly for UK organisations balancing EU-driven change with shifting local expectations. But IKEA’s experience highlights that much of the work builds on existing reward practices.

Clarifying pay philosophy, strengthening manager capability, and communicating total reward more effectively are all familiar priorities. The difference is the level of visibility and accountability required.

In this sense, pay transparency is less a transformation and more an evolution—one that, when approached thoughtfully, can deliver meaningful benefits for both employees and organisations.