Preparing for the EU Pay Transparency Directive with KPMG’s Job Evaluation Approach
With the EU Pay Transparency Directive due to be transposed into Member State law by June 2026, organisations operating within the EU must prepare for new and significant obligations. Aimed at addressing gender-based pay disparities, the Directive mandates greater transparency in pay practices, recruitment, and internal reporting.
A key requirement obliges companies to identify and address unjustified gender pay gaps exceeding 5% within categories of workers performing equal work or work of equal value. To meet this standard, organisations will need to establish robust, objective job categorisation methodology.
Without clear and consistent job categorisation, organisations will struggle to comply with the core elements of the Directive, such as gender pay gap reporting, employee access to pay comparison data, joint pay assessments, and pay transparency in recruitment.
Job Categorisation: The Core Lever
The EU Pay Transparency Directive requires that pay gap analysis and reporting be performed within categories of workers performing equal work or work of equal value. These categories are not simply job titles, they must be objectively defined based on criteria such as skills, effort, responsibility, and working conditions.
Establishing such categories is complex. Relying on legacy job titles or managerial intuition risks inconsistency, bias, and non-compliance. This is why organisations need a systematic, evidence-based method to define and group roles of comparable value. Job evaluation offers the most robust and defensible approach.
KPMG sKale Job Evaluation Methodology
The KPMG sKale Job Evaluation methodology provides a structured and objective framework for evaluating roles across six critical dimensions:
Knowledge
Complexity
Impact
Human Contacts
Work Environment
Management
These six dimensions directly reflect the criteria set out in the Directive: skills, effort, responsibility, and working conditions. This alignment helps ensure that compliance is built into the evaluation process.
The KPMG sKale Job Evaluation Methodology also offers customisable weighting, allowing organisations to tailor the framework to their strategic priorities. This ensures that business-critical capabilities are accurately recognised, while maintaining consistency across functions and geographies. A structured approach also reduces the risk of subjective judgments and inconsistencies.
Linking Job Evaluation to EU Pay Transparency Directive Requirements
An effective job evaluation system not only supports fair and transparent pay structures but also enables organisations to:
- Define categories of comparable roles to support accurate gender pay gap reporting.
- Provide a validated, objective basis for joint pay assessments where pay gaps exceed 5%.
- Enhance pay transparency in recruitment by linking pay ranges to job grades and ensuring gender-neutral job descriptions.
- Equip HR, managers, and leaders to respond confidently to employee requests for pay comparison data using objective job criteria.
- Support broader talent management priorities, such as career development and succession planning, through a clear framework of roles and progression pathways aligned with organisational needs.
By investing in structured role evaluation now, organisations can proactively position themselves for compliance with the Directive, reduce regulatory risks, and strengthen internal trust and external credibility around pay fairness.
Our Experience Across Sectors
KPMG has a proven track record of supporting organisations across industries build fair and transparent pay frameworks. We have delivered job evaluation solutions for organisations of varying sizes, from those with 50 employees to multinationals with more than 3,500 staff. Our experience spans banking, healthcare, education, manufacturing, FMCG, maritime, and aviation, covering nearly 400 distinct roles.
These engagements are designed not only to align pay with business strategy, but also to prepare organisations for regulatory scrutiny and pay transparency obligations. Our approach is tailored and evidence-based, delivering sustainable structures that support compliance, talent retention and cultural change.
Act Now
June 2026 may seem far off, but building objective job categorisation and compliant pay structures takes time. Organisations that begin early will be better positioned to meet the EU Pay Transparency Directive requirements. They will also demonstrate leadership in fair pay practices, a competitive edge when it comes to attracting and retaining talent. By contrast, delaying action raises the risk of non-compliance, regulatory penalties, reputational damage, and talent loss.
With Legal Notice 112 formally published on 27 June 2025 by the Maltese Government and its new transparency obligations taking effect on 27 August 2025, the compliance timeline is now real and pressing.
KPMG can support you at each stage, starting with job evaluation, to help ensure your organisation is compliant, fair, and well positioned for the future.
If you have any questions or are seeking personalised guidance for your organisation's success, please do reach out to us below or contact Claudine Borg Azzopardi directly at cborgazzopardi@kpmg.com.mt.
