Pay equity tools at a market overview – Human Resources

The EU Pay Transparency Directive makes pay equity mandatory, but the software market has become confusing. A structured overview of around 20 providers in six categories helps HR departments and management with orientation.

The EU Pay Transparency Directive must be implemented into national law by June 7, 2026. Even if the first draft law is only expected shortly in Germany, the direction is foreseeable: companies with more than 100 employees will in future have to regularly report on gender-specific pay differences. In addition, employees have a right to information that companies should be aware of. In addition, companies must ensure transparency when determining remuneration and remuneration development.

If the unadjusted gender pay gap in a company is five percent or more in the future and it cannot be justified by objective, gender-neutral criteria, the company must carry out a pay assessment together with employee representatives, for example a works council.

Various studies show that less than a third of companies in Germany currently feel prepared to meet these requirements. In addition, only a fraction of companies believe that they already fully meet the comprehensive requirements of the Pay Transparency Directive.

The countdown is running

For compensation managers, this specifically means: Manual job evaluation, maintenance of job architectures, market comparisons and analysis of complex compensation structures using spreadsheets is error-prone, time-consuming and simply no longer up-to-date.
At the same time, the global market for pay equity software has diversified significantly in recent years. More than 20 relevant providers are now competing for the favor of European companies – some with very different approaches, strengths and pricing models.

Six segments structure the market

To make it easier for companies to find their way, we divide the providers of pay equity tools into six categories.

1. Klassische Pay-Equity-Tools form the largest and most mature segment. Providers such as Pay Analytics (IS) from Beqom (CH), Pihr (SE), Syndio (US), Sysarb (SE) and Trusaic (US) have proven statistical methods and many years of experience in the Anglo-Saxon and Scandinavian markets. Many of these tools use multivariate regression analysis to determine adjusted gender pay gaps. The challenge for the German market is therefore: Not all tool providers have already fully adapted their methodology to the specific requirements of the EU Pay Transparency Directive, and German-language support is not available everywhere.

2. All-in-one solutions such as Gradar (DE; own name: gradar) integrate job evaluation, compensation structuring and pay equity analysis in one platform. The advantage of this: The analytical basis, i.e. the determination of the equivalence of work, is created in the same system that then carries out the pay comparisons. This integrated approach is particularly attractive for companies that need to redesign or modernize their job architecture anyway. The disadvantage, however, is that the pay equity functionalities of the system cannot be used in a provider-agnostic manner, so a switch from a legacy system would be necessary.

3. European challengers such as Competo (DE), Evenpay (FI), Figures (FR), Ines Analytics (DE), Pay Gap (DK), Ravio (UK) and Skills Trust (IE) follow different approaches. Some work similarly to classic pay equity tools, others rely on skill-based job architectures, and still others use market comparisons as a basis for analysis. You should ask yourself for your own purpose whether the use of a simple benchmark summary or the determination of equality of work based on the contribution group key is permissible. European providers could at least be closer to the regulatory requirements of the EU Pay Transparency Directive than providers who are not based in the EU. However, because they take very different approaches, it is difficult to compare the tools with each other.

4. Advice-supported hybrid models, such as those offered by compensation consultancies such as Lurse (DE) and the various American counterparts such as Mercer (US) are one option. The focus here is on consulting services, which are made possible through proprietary analysis tools or collaborations with classic pay equity tools, such as in the case of Aon (US) with Trusaic (US). This approach is particularly suitable for companies that require intensive support during the initial analysis or when interpreting complex results. However, dependence on external expertise can limit long-term scalability.

5. Law firm-focused tools for lawyers are sometimes used as part of legal advice. They often combine simple job evaluation approaches with software-based pay analysis, for example in “R”. However, comprehensive job architectures or suitability as a basis for salary comparisons cannot necessarily be assumed. It’s not for nothing that they say: Iudex non calculat – the judge doesn’t calculate.

6. HR platforms such as SAP Success Factors (DE), Workday (US) and Personio (DE) sometimes offer pay equity as a module within their broader HR solutions. The advantage lies in the broad database and the ability to analyze pay equity in the context of other HR metrics. However, the depth of the specific functionalities with regard to equal pay can lag behind specialized providers.

What to do now

Companies should actively use the remaining time until the EU Pay Transparency Directive is implemented into national law. Three steps are particularly important.

1. Inventory: Without a clean database and without a reliable system for evaluating jobs, any pay equity analysis is only as good as its weakest input variable.

2. Tool selection: This market overview shows that there is no one right solution. But a structured selection process with clear evaluation criteria saves time and money in the long term.

3. Integration into the HR landscape: Pay transparency and equal pay should by no means be a one-off project. The integration of pay equity monitoring into the regular compensation cycle, i.e. into salary rounds, budget planning and job evaluation processes, will become standard in the medium term. Automation and real-time monitoring are the key trends that will drive this development.

Conclusion

The pay equity software market is on the move. Companies that now systematically select a pay equity tool provider and implement the tool not only create regulatory compliance, but also build a transparent, fair compensation culture that pays off as a competitive advantage in the long term.