Advance pay equity with Oracle HCM and AI

Eva De Vries

Partner, Advisory, PwC Belgium

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Johannes Smits

Partner, People and Organisation, PwC Switzerland

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In most countries, gender equality remains at the top of the corporate agenda. Forward-thinking business leaders know that pay transparency is a powerful lever for addressing persistent inequalities in the workplace, particularly the gender pay gap. Despite decades of advocacy and incremental policy changes – and as PwC research indicates –, women across the European Union (EU) still earn, on average, significantly less than their male counterparts. This persistent disparity can be linked to undermining social cohesion, economic efficiency, and trust in institutions.

To affect systemic change, the EU enacted in June 2023 the Pay Transparency Directive (PTD), a landmark piece of legislation designed to promote equal pay for equal work and bring hidden pay inequities into the open. The directive’s provisions apply globally and impact almost all employers operating in the EU, including many US-based companies with operations in Europe, and its consequences will be reflected in the entire life cycle of an employee.

The directive’s reporting obligations are tiered based on the number of employees within each EU country:

Companies with 250 or more employees in an EU member state:
Required to publish gender pay gap information annually
Companies with 150 to 249 employees in an EU member state:
Required to report every three years
Companies with 100 to 149 employees in an EU member state:
Reporting obligations commence in 2031, with reports due every three years thereafter

It is important to note that, given the directive's broad scope, a significant number of U.S. multinational corporations with European operations will be subject to these requirements. For U.S. companies, compliance entails implementing systems to collect and analyse compensation data within their EU operations, enabling adherence to the directive's transparency and reporting standards. The thresholds do not apply to the company's total global workforce; therefore, U.S. companies with operations in the EU must assess their employee count in each member state to determine their specific reporting obligations under the PTD.

Failure to comply can result in penalties, making it imperative for affected companies to proactively prepare for these obligations.

Learn how your organisation can meet compliance whilst advancing its pay equity mission.

Landmark directive triggers opportunities

The PTD will significantly raise the bar for pay reporting, fairness in recruitment and promotion, and transparency in pay structures. For HR leaders, though, the directive represents a significant compliance challenge, and its impact cannot be underestimated: meeting all the requirements of the PTD means modifying many HR processes.

But it also represents an opportunity to embed accountability into the very foundation of their people strategies. As stewards of organisational culture, equity, and talent development, Chief human resource officers (CHROs) are uniquely positioned to champion pay transparency and help close the gender pay gap.

From ensuring data quality and cross-functional collaboration, to reshaping reward philosophies and aligning with broader diversity, equity and inclusion (DEI) and sustainability goals, HR will be at the forefront of navigating this transformative shift—and in doing so, can lead the way in building fairer, more transparent, and more resilient workplaces.

A regulatory milestone in the pursuit of workplace equality

The directive marks a transformative shift in how organisations across the EU must approach pay equity. It mandates greater visibility into pay structures and aims to empower workers with the information they need to challenge unjust disparities. For employers, it signals the beginning of a new era of accountability—where compensation practices are subject to heightened scrutiny, and compliance requires far more than periodic audits or isolated DEI initiatives. This article explores the key provisions of the PTD, its implications for employers, insights from PwC’s research, and the broader strategic opportunities it presents for closing the gender pay gap in a sustainable and transparent manner.

Under the PTD, employees are empowered to understand and assert their right to equal pay, bolstered by measures that make employer pay practices more visible. The directive includes provisions such as mandatory pay reporting, pay audits, and the right to information about pay levels, all designed to bring discriminatory pay structures to light. Member States are required to transpose the directive into national law by June 7, 2026, although they are permitted to implement stricter rules if they so choose.

The directive outlines minimum standard requirements across the EU but recognises that the gender pay gap is a complex, multifactorial issue. Factors contributing to the gap include occupational segregation, unequal sharing of care responsibilities, and unconscious bias in recruitment and promotion. As a result, the PTD goes beyond simple disclosure to impose a broad set of transparency obligations that influence not just how pay is set, but how roles are defined and compared, how candidates are recruited, and how performance is evaluated

Tech-enable pay transparency reporting and opportunity

According to PwC’s 2023 Women in Work Index, progress toward gender equality in the workplace remains slow, and the gender pay gap persists. PwC’s analysis highlights that greater transparency, stronger enforcement mechanisms and cultural shifts are essential to achieve meaningful change. In line with this, the PTD mandates that, if a pay gap of more than 5% is found and not justified by objective, gender-neutral factors, employers may be required to conduct a joint pay assessment in cooperation with employee representatives. The implications for employers are significant.

Companies must ensure that HR data is accurate, comprehensive and current, as all compliance and reporting efforts rely heavily on this information. It is therefore critical for HR, IT, and legal teams to collaborate closely, ensuring that systems can extract and process the necessary data efficiently while maintaining compliance with local data protection and privacy regulations, including the General Data Protection Regulation (GDPR).

Implementing the PTD requires more than technical compliance; companies must implement a cultural and operational shift. The road to closing the gender pay gap is complex and resource-intensive—but it is also an opportunity for organisations to build fairer and more resilient workplaces. By investing in the systems, policies, and cultural changes required, employers can not only meet their legal obligations but also lead the way in driving inclusive and sustainable business success.

Leveraging Oracle HCM to meet your company’s pay equity goals

Compliance with PTD requires robust systems capable of managing, analysing, and reporting compensation data effectively. Oracle Fusion Cloud Human Capital Management (HCM) offers a comprehensive suite of tools designed to assist organizations in meeting these requirements. Consider these sophisticated benefits offered by Oracle HCM:

Oracle Cloud HCM consolidates all HR processes onto a single platform, ensuring data consistency and accuracy. This unified approach facilitates comprehensive trackingOpens in a new window of employee compensation, performance, and progression, which is essential for identifying and addressing pay disparities. By maintaining a single source of truth, organizations can more easily monitor and report on pay equity, a core component of the PTD.

Compliance with the PTD necessitates detailed reporting on gender pay gaps and compensation structures. Oracle Cloud HCM's advanced analytics tools enable HR leaders to generate real-time reports and dashboards, providing insights into compensation trends and disparities. These tools support proactive identification of inequities and facilitate the development of targeted strategies to address them. Additionally, the system's robust reporting capabilities enable organizations to meet the directive's transparency and reporting obligations efficiently.

Incorporating skills as a metric in compensation decisions enhances transparency and fairness. Oracle Dynamic Skills allows organizations to assess and reward employees based on their verified skills and responsibilities, aligning with the PTD's emphasis on objective, gender-neutral pay structures. This approach not only supports compliance but also promotes a culture of meritocracy and continuous development within the organization.

Compliance readiness with tech-driven solutions

Implementing Oracle Cloud HCM to address the PTD's requirements can be complex. PwC's collaboration with Oracle provides organizations with the expertise needed to navigate this transition effectively. PwC offers tailored implementation strategies, enabling the HCM system to align with your organizational goals and comply with the new directive. This relationship with Oracle enables HR leaders to leverage Oracle's technology while benefiting from PwC's deep understanding of human capital management and compliance landscapes.

By adopting Oracle Fusion Cloud HCM, organizations can enhance their ability to comply with the EU Pay Transparency Directive, promote pay equity, and foster a more transparent and inclusive workplace culture.

CHROs and CEOs are seeking tech-powered solutions that not only help address immediate needs but also lay the groundwork for sustained adaptability to workforce challenges. In this context, Oracle is a valuable enabling resource for HR teams because it offers a flexible platform that spans various business areas.

Three-step PTD readiness process

PwC's Oracle team developed a three-step PTD readiness process to help CHROs meet compliance with the new directive. What practices can your organisation take now to address the upcoming disclosure deadline, meet compliance, and drive your pay equity and ESG mission? Based on our experience helping businesses worldwide, ESG success involves three elements: strategy, technology, and processes. Below are three important considerations:

Perform a PTD gap assessment: PwC can provide your company an analysis to help you identify your readiness to comply with the PTD requirements and understand which processes need to be addressed. It provides you with detailed recommendations that will enable you to meet compliance and avoid possible penalties. It can save you work by avoiding having to implement individual requirements separately.
Tech-enable your HR team to automate compensation data collection: One of the most common challenges in regulatory reporting is managing dispersed, unstandardized, and unprocessed data. This is a pervasive issue for organizations across industries, often creating bottlenecks in accurate and timely reporting. To help address this, PwC is launching an AI agent for Oracle Fusion Cloud HCM to help HR teams meet the PTD reporting requirements by automating the process of gathering and reporting relevant compensation data.
Embed equity into the fabric of your organization: Achieving today’s DEI goals and advancing pay equity requires more than just meeting compliance or investing in technology. True progress comes when equity is intentionally integrated into your organization's mission, values, and everyday operations—across business functions, departments, and roles. Assess where gaps exist in your policies, practices, and outcomes; then use those insights to inform strategic decisions, shape inclusive culture initiatives, and guide equitable compensation practices at every level.

We can help you assess your company’s readiness wherever you are on the DEI and PTD compliance journey. We orchestrate with Tax, Risk Assurance and Management Consulting teams to address complex challenges with a holistic approach. Our lifecycle assesses your operating model success and enables new digital capabilities and enhanced business outcomes.

Get in touch and learn more about how we can help your enterprise. Visit our website.