Pay equality in Finland: Why is taking action right now more important than ever?
We Finns experience and have also been pioneers in many social topics. Challenges today – slowing economic growth, migratory tensions, war in Europe, structural changes in society and difficulties in the labour market – demand more of us than ever. How will Finland and Finnish companies stand out from their competitors? In this context, the EU Pay Transparency Directive on equal pay offers us the opportunity to look to the future.
The content of the directive is already known. We have a maximum of two years to prepare – external and internal reporting of salaries, bonuses and their differences will take place based on the data of 2026 at the latest. As the first EU country, Sweden has already outlined how the directive will be implemented in local legislation. Time passes quickly, and many Finnish companies still have a lot of work to do before they are ready for the required transparency.
Why the Pay Transparency Directive has been adopted?
The EU Pay Transparency Directive follows the same development that has started earlier in countries such as the United States, Canada and the United Kingdom. The EU directive is the most comprehensive of these initiatives and will fundamentally change the labour market.
The fundamental reason for the directive is equal pay between men and women in general but especially within companies. The average gender pay gap in EU countries is 13% (the average pension gap is 26%). In Finland, the pay gap is larger than the EU average, at 15.5%. Moreover, the pay gap has not decreased significantly in recent years. At the current rate, the gender pay gap in Finland will be reduced to zero in 26 years.
There are, of course, many structural reasons for the gender pay gap, such as the low number of women in senior positions, the distribution of family leaves, but also possible unequal practices, such as salary determination in recruiting.
Why do companies need to start now?
The directive has already been adopted:
The directive will be transposed into local legislation in all EU countries latest in June 2026. External and internal reporting will take place based on salaries for 2026 at the latest. It is also possible that some member countries will implement the directive more quickly (e.g. many elections in EU countries 2024-2025) or more extensively than the directive obliges. As a result, companies no longer have the opportunity to wait – the change is big and implementation must begin immediately.
The Directive applies to all companies in the EU:
The reporting requirement of the Directive varies according to the size of the company, but in other respects the directive applies to all companies.
Preparation within companies takes time:
Compliance with the Directive requires significant changes in practices, processes and communication in many companies. Reforming pay transparency and the necessary structures is a complex and time-consuming task that needs to start now in order to achieve the changes in time. How have remuneration practices been defined, for example, after acquisitions?
Cultural change:
New ways of working also require a cultural change in many organizations. Employees and managers need to adopt new ways of thinking and acting, which requires training and communication. The process takes time and requires consistent ownership and effort.
Reputational risk and competitive advantage:
By starting early, you can manage reputational risk and build your employer image. Already now, pioneering companies publish the salary range for the position in the job advertisement.
What should companies do now?
1. Conduct a readiness assessment:
Conduct a comprehensive assessment of the extent to which current practices and processes comply with the requirements of the Directive. Do you know how equal your company’s current salary structure is? Are the differences justified? An objective pay equality analysis of salaries and incentives helps to identify shortcomings, find unexplained differences in pay and plan the necessary changes.
2. Develop and implement a roadmap:
Establish a phased plan to implement changes. The plan may include conducting salary analyses, introducing gender-neutral assessment methods and improving the transparency of pay structures.
3. Educate and inform:
Start by sharing information about the directive and its implications as well as benefits with your organisation’s management and HR professionals. It is important that everyone, especially line managers, understand what requirements are coming, why they are important and how the change will benefit the business.
By complying with the directive, we are not only complying with the law; We also lay the foundation for companies to build a more sustainable and inclusive working environment – and Finland at the same time. Fairness and equality are not only values but also strategic initiatives that enable companies to strengthen both their own competitive position as well as social impact.
Rewardia – in collaboration with Pihr – is committed to helping organizations achieve the goals set by the directive. We provide concrete tools and strong experience and partnership to implement pay equality, helping to create workplaces where everyone can succeed. Promoting equal pay is not only a legal obligation – it is also an opportunity to lead the way towards a more equal society.
