By June, you’ll have to tell candidates the salary. Most FS firms aren’t ready.

A senior risk hire I spoke with last month was looking at two roles.

Same firm. Same level. Same reporting line. One based in Madrid. One based in London.

The Madrid posting included a salary band. The London posting didn't.

She had asked the recruiter why.

"He told me they'd 'figure it out at offer stage,'" she said. "I'd already worked out what that meant."

She took the Madrid role.

By 7 June, that asymmetry will be against the law across most of Europe.

The EU Pay Transparency Directive, adopted in 2023, becomes binding on member states in just over a month.

UK financial services has spent eighteen months telling itself this doesn't apply.

Most of that is wrong.

What the directive actually does

Four things matter.

It requires employers to publish pay levels in job ads, or share them on request before interview.

It bans asking candidates what they currently earn.

It gives existing employees the right to know average pay, by sex, for equivalent work.

And where a gender pay gap exceeds 5% without objective justification, employers are forced into a joint pay assessment with worker representatives.

The detail matters less than the direction.

After June, in the EU, salary becomes a fact. Not a negotiation.

Why UK FS thinks it's exempt, and why it isn't

The UK isn't in the EU. The directive doesn't bind UK law. That's where most firms have stopped reading.

What they've missed is that the directive applies to any employer hiring within an EU member state. Almost every meaningful UK financial services firm now has substantial EU operations.

Frankfurt. Dublin. Paris. Amsterdam. Luxembourg. Madrid.

Those operations are in scope. Those job postings are in scope. Their pay practices are in scope.

Then there's the practical question, which is the one most firms haven't started thinking about.

When the Madrid vacancy lists a band and the London vacancy for the same role doesn't, candidates notice. Recruiters notice. Internal employees notice.

Good luck to the HRD who has to explain to a Director in London why her counterpart in Frankfurt is allowed to know what the role pays before applying, and she isn't.

What transparency actually reveals

The part nobody at board level wants to say out loud.

The reason most firms are slow on this isn't that the regulatory mechanics are hard. They aren't. Mercer, WTW, Korn Ferry and PwC have all published readiness frameworks. The European Commission has issued guidance running to dozens of pages.

The reason firms are slow is what transparency actually surfaces.

Two people doing the same work for materially different money. Recent hires earning more than longer-tenured employees. Gender and ethnicity gaps that don't survive contact with a 5% threshold. Job titles inflated to justify comp rather than to describe work.

A reward director at a UK bank put it to me last quarter:

"We're not really preparing for transparency. We're preparing for the questions transparency will let people ask."

That's the honest version of where this sits.

The major reward consultancies have all surveyed European employer readiness in the last year. The pattern is consistent. Most employers describe themselves as partially, not fully, prepared. Financial services consistently lags professional services and tech.

It isn't a technical readiness gap.

It's an internal will gap.

The firms doing this properly

The firms getting ready properly aren't running a compliance project. They're running a comp review.

A City employment partner who advises three of the UK's largest banks described it to me this way:

"The work isn't the disclosure. The work is everything that has to be true before disclosure becomes safe."

What that looks like in practice is a six-to-twelve-month exercise.

Audit current pay across every role band.

Identify the gaps that won't survive transparency.

Close them, or build a defensible justification in writing.

The firms that started early are slightly poorer in 2026 and dramatically less exposed in 2027.

The firms that haven't started will spend the next eighteen months managing the consequences of decisions they could have made on their own terms.

What this means for hiring

Two things.

The candidate experience is about to become more honest. Salary won't be extracted through three rounds of negotiation. It will be a fact at the top of the page.

That removes friction. It also removes the ways firms have managed exceptions. The "we'll find a way to make it work for the right candidate" conversation becomes much harder when everyone else can see the band.

The second thing is harder to talk about.

When salary becomes visible, it stops being the thing that does the recruiting work. Which means everything else has to do more of the lifting.

The work itself. The team. The manager. The flexibility. The trajectory.

Firms that have been buying their way out of weak propositions are about to find out how weak the proposition actually was.

The quiet truth

The EU Pay Transparency Directive isn't really about pay.

It's about whether what you've been telling people about how decisions get made matches the way decisions actually get made.

That's been a culture question for as long as there have been firms.

It's now becoming a documented one.

Transparency doesn't create pay problems. It just makes the existing ones impossible to ignore.