Equal pay: the risk organisations can no longer ignore

High-profile cases in retail, healthcare and local government have brought the issue into sharp focus. Public awareness is rising, unions are becoming more strategic, and employees expect unprecedented levels of transparency and fairness.

At the same time, the nature of work has evolved faster than most pay frameworks can keep up with. Hybrid working, role evolution, and non-standard pay arrangements have introduced new layers of complexity that legacy systems were never designed to handle.

And yet, many organisations are still not equipped to respond.

A confidence gap hiding in plain sight

The HR Barometer reveals a striking disconnect between perceived compliance and actual readiness.

While most organisations believe they are broadly compliant, fewer than 30% feel very confident in their position.  The majority sit in the middle, signalling uncertainty, not assurance, which is a precarious place to be when potential liabilities can reach into the millions.

That uncertainty stems from systemic challenges:

• Concerns over pay data quality
• Outdated or incomplete job evaluation frameworks
• Long neglected legacy pay practices
• A lack of understanding in how equal pay risk accumulates over time

In many organisations, leaders simply do not have the evidence base to demonstrate compliance — and they know it.

The HR Barometer reveals a striking disconnect between perceived compliance and actual readiness.

While most organisations believe they are broadly compliant, fewer than 30% feel very confident in their position.  The majority sit in the middle, signalling uncertainty, not assurance, which is a precarious place to be when potential liabilities can reach into the millions.

That uncertainty stems from systemic challenges:

• Concerns over pay data quality
• Outdated or incomplete job evaluation frameworks
• Long neglected legacy pay practices
• A lack of understanding in how equal pay risk accumulates over time

In many organisations, leaders simply do not have the evidence base to demonstrate compliance - and they know it. 

How confident, if at all, are you in your organisation's compliance with equal pay legislation?

Equal pay issues are the norm, not the exception

One of the starkest findings from the survey is that more than two thirds of organisations across both public and private sectors are managing live equal pay issues right now.

In many cases, the root causes are embedded:

• Historic decisions baked into pay structures
• Inconsistent role evaluation across job families
• Gradual “role drift” without corresponding pay alignment

As a result, HR teams are often forced into reactive firefighting, addressing individual challenges rather than preventing them at source.

The prevalence of issues points to a deeper governance gap: equal pay risks have been allowed to build over time rather than being proactively monitored, surfaced and resolved. 

Do you have any live equal pay issues?

Frameworks that haven’t kept pace

The modern workforce has evolved rapidly. In many organisations, pay frameworks have not.

Common challenges include:

• Job evaluation frameworks that are outdated, poorly documented or inconsistently applied
• Job scoring that no longer reflects modern, hybrid roles
• Pay progression routes have become unclear or misaligned
• Evolving workforce models have moved beyond the assumptions underpinning legacy structures

As a result, existing evaluation outcomes can struggle to withstand internal challenge, let alone external scrutiny. When inconsistent market supplements, off cycle decisions or role drift are added to the mix, the conditions for equal pay issues to thrive become almost inevitable.

The structural factors that amplify risk

Certain organisational risk factors significantly heighten exposure:

• Complex role structures = harder to compare roles of equal value
• Gender-segregated job families = risk of historic under or over-valuation
• Multiple pay systems = inconsistent grading and reward outcomes
• Frequent organisational change = misaligned roles and pay decisions
• High levels of managerial discretion = increased risk for bias

Individually, these factors add complexity. Combined, they create systemic vulnerability.

The cost of getting it wrong

The consequences of poor equal pay management are tangible, visible and often expensive:

• Legal exposure through claims, settlements.
• Financial impacts, with back pay and legal fees running into millions
• Reputational damage, driven by media scrutiny and internal mistrust
• Cultural consequences erode employee confidence, weaken engagement and accelerate turnover
• DEI disruption undermines broader organisational commitments and exposes inconsistencies

Organisations face a pivotal choice: act early or pay later. In almost every case, the cost of inaction is higher. 

A shift in how organisations are responding

 Encouragingly, many organisations are taking action. 80% are implementing, or planning to implement, new job evaluation or pay‑and‑grading schemes within the next 12 months

But the most effective organisations are going further. They are:

• Treating equal pay as a strategic risk, not a technical HR issue
• Investing in modern, robust frameworks
• Embedding governance and accountability across the business
• Building data transparency and auditability
• Equipping decision makers beyond HR to manage risk effectively

Are you currently reviewing or implementing a new job evaluation or pay grading scheme?

From reactive to proactive: lessons in practice

We’ve already seen these differing approaches play out in recent equal pay disputes across local government.

For years, defending litigation was the default; a costly, slow and reactive path that often prolongs uncertainty for employees and employers alike. Sheffield City Council, one of the organisations Grant Thornton has supported, chose a fundamentally different route.

Rather than entrenching positions, the Council engaged proactively with Trade Unions from the outset, acknowledging issues early and working collaboratively toward a resolution. As a result, they reached an agreement on equal pay settlements within just two years of the first concerns being raised — a pace rarely seen in equal pay cases of this scale. The Council is now implementing a new job evaluation scheme and end‑to‑end process to address the structural weaknesses that contributed to their exposure.

The lesson is clear: organisations that confront equal pay issues early, openly and analytically can resolve them faster, with less disruption, and with a far stronger platform for long‑term workforce trust.

Five questions every organisation should be able to answer

 To understand your level of exposure, ask:

1. Do you have accurate, up-to-date and digitised job descriptions for all roles?
2. Are all pay elements (allowances, bonuses, supplements) clearly documented and justified?
3. Do all decision-makers understand equal pay requirements — not just HR?
4. Can you evidence that pay decisions are consistent, fair and bias-free?
5. Do you actively monitor and surface emerging risks through data and audits?

If the answer to any of these questions is not a confident “yes”, there is likely a level of unmanaged risk.

Moving forward with confidence

Equal pay is no longer a periodic compliance exercise. It is a continuous, organisation-wide discipline.

Organisations that act now - building clarity, consistency and transparency into their pay practices — will not only reduce risk, but strengthen trust, improve equity, and enhance their employer brand.

Those that don’t risk being forced into action later - at significantly higher cost.

If you need support, get in touch with our team.