Consider a manager who has, by most measures, been doing this well. Her team respects her. Her one-to-ones are consistent, her feedback is direct, and when someone is struggling she notices early. She is, in most organisations, the kind of manager People Directors quietly rely on.
Then, in a routine catch-up, her direct report asks a question she has never quite been asked before. The team has seen the company updating its job postings with pay ranges - a compliance change, internal communications said, related to new legislation. She has done a little reading. And she wants to know: is she paid fairly, compared to colleagues doing comparable work?
The manager takes a breath. She knows this person well. She trusts her. She wants to give her a good answer. The honest answer (the one that stays with her after the conversation ends) is that she does not know. She knows the approximate salary band for the role. She does not know how it was set, whether it was last reviewed before or after the latest market survey, how it compares to the equivalent function in another team, or what criteria determine where within the band any particular person lands. She knows the story she was told when she hired this person. She does not know whether that story is consistent with the rest of the organisation.
She says something reassuring. She follows up with HR. The employee leaves the meeting with a feeling she cannot quite name: not deceived, exactly, but aware that an answer was given in place of information.
This diagnosis is wrong, and acting on it by putting managers through a briefing session and calling it preparation produces the same outcome on a slightly longer timeline.
The problem is not the manager. The problem is that the manager was handed a compensation system she was never taught to explain, in an organisation where explaining it was never required. She applied it. She made hiring recommendations within it. She delivered pay reviews using it. And it worked, in the sense that nothing catastrophic happened, because the system was never asked to account for itself.
Pay transparency ends that arrangement. When employees have the right to request information about how their pay compares to colleagues doing equivalent work, a right the EU Pay Transparency Directive now establishes for employers across the European Union1, the system must be capable of explanation. And the person they will ask, most of the time, is their manager.
The conversations that managers will face are not complicated in their surface form. Why am I paid what I am paid? Why is my pay range set this way? What would it take to earn more? These are questions a manager should be able to answer. Under a well-designed system, with proper preparation, they can.
What makes them hard is not the questions themselves but the infrastructure required to answer them honestly. To explain why someone is at a particular point in a pay range, a manager needs to understand how the range was set, what the progression criteria for the role are, and where this person sits against them. To respond to a question about comparable roles, she needs to understand how the job architecture works, which functions are comparable at which levels, and why. To answer a question about what earning more would require, she needs documented progression criteria, not a vague sense of what the next level looks like.
Most managers have none of this. Not because they are incurious. Because the organisation never gave it to them.
Preparing managers for pay transparency conversations is not the same as briefing them on what the legislation requires. The legislation is the context. The preparation is giving managers the material to do the job.
That means, at minimum, three things.
Answers to the questions they will actually be asked. Before transparency obligations take effect, managers should know: how pay ranges in their team were set, where individuals sit within those ranges and why, what the progression criteria for their roles look like, and what the process is for an employee who wants to request a formal comparison. These are not difficult answers to document. They are simply answers that most organisations have never been required to provide to managers before.
Language for the honest conversation. Some pay situations are complicated. A person may be at the lower end of their range for reasons that include history, negotiation, and market timing — reasons that are real but not flattering when stated directly. Managers need language for this that is honest without being destructive. Here is where you are. Here is the range. Here is what progression looks like. That conversation is better than a reassurance that leaves the employee with no new information.
Escalation paths. Not every question will have an answer the manager can give. Some will need to go to the People team, or involve a formal right-to-request process. Managers should know where that boundary is and how to hand it over without making the employee feel that the question was unwelcome.
Pay transparency does not only test whether an organisation has the data. It tests whether the relationship between the organisation, its managers, and its employees can hold under scrutiny.
The managers who handle these conversations well are those who can answer directly, acknowledge complexity without deflecting, and treat the question as a reasonable thing to ask. These managers will build something durable. Trust established in a difficult conversation compounds. Employees who leave those meetings understanding something they did not understand before are more likely to stay, more likely to engage, and significantly less likely to assume the worst.
The managers who cannot, through no fault of their own, will erode something that is harder to rebuild. Not because the employee concludes anything dramatic, but because vagueness, at scale and over time, reads as avoidance.
The preparation problem is, in this sense, also a leadership development problem. It is an opportunity for organisations to give their managers the foundations they needed a long time ago, and to discover, in doing so, what kind of conversations their culture is actually capable of having.
1 Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 on strengthening the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms. Article 7 establishes the right of workers to request information about their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value. Member states were required to transpose the Directive into national law by 7 June 2026.