Pay equity readiness in SAP SuccessFactors starts with job architecture

The EU Pay Transparency Directive has moved pay equity from aspiration to obligation. Yet many organizations are still approaching it as a reporting problem.

It isn’t. Let’s dive in.

In our recent expert-led webinar on Pay Equity Readiness with Job Architecture in SAP SuccessFactors, one observation was consistent throughout: will not fail on analytics — they will fail on structure. This recap brings together the key insights for HR and HRIT leaders who now need to align strategy, data, and system design before reporting becomes mandatory.

Pay equity, equality, and transparency are not interchangeable

Pay fairness rests on three related but distinct principles.

• Pay equality sets the baseline: equal pay for equal work.

• Pay equity introduces justification: differences in pay must be objectively defensible.

• Pay transparency creates trust: employees can see how pay is structured and how progression works.

The directive requires all three. Crucially, it assumes organizations can explain why pay differences exist — not simply show what people earn. The burden of proof increasingly sits with the employer.

This is where many organizations underestimate the scope of change required.

Why compliance starts with structure, not reporting

A common misconception is that pay equity is solved by producing the right report at the right time. But in reality, reporting is the final step. The directive assumes that a job architecture already exists and requires employers to demonstrate that pay decisions are based on objective, gender-neutral criteria. It does not ask what you pay — it asks why.

Without a defensible job architecture, reporting does not reduce risk. It exposes it.

What “equal work” actually means in practice

Under the directive, equal pay applies when work is the same or different but of equal value. That assessment must be based on gender-neutral criteria such as skills, effort, responsibility, and working conditions.

The most important implication is this:

Pay equity analysis is job-based, not people-based.

Job titles are explicitly insufficient. The same title does not guarantee the same job value, and different titles do not automatically imply different value. What matters is how work is defined, evaluated, and compared — consistently, across functions and countries. This is where HR and HRIT must meet.

The structural gaps that create compliance risk

Across global organizations, the same patterns appear again and again. Local job catalogs evolve without global alignment. Leveling criteria drift across regions or functions. Job titles are used as substitutes for job evaluation. Personalized roles are created to retain individuals. Legacy pay decisions persist without documented rationale.

Under pay transparency, these gaps have real consequences: artificial pay gaps, exposure during employee information requests, regulatory scrutiny, and costly remediation. Strong reporting layered on top of weak structure does not protect you. It magnifies the risk.

Job architecture is now a compliance requirement

The relationship is linear and unavoidable. A clear job architecture enables consistent job categorization and defensible pay structures. Those, in turn, make compliance outcomes achievable and explainable. This is why job architecture has shifted from best practice to regulatory foundation.

Building job architecture in SAP SuccessFactors

In SAP SuccessFactors, job architecture is not a single feature. It is a framework that spans Job Profile Builder, Talent Intelligence Hub, and Employee Central. The critical design principle is not completeness on day one, but maintainability over time.

Organizations that succeed start with a clean foundation — families, roles, and classifications — and then build iteratively. Skills, competencies, and detailed profiles strengthen equity logic over time, but only if the underlying structure is sound. Designing the architecture with the system’s capabilities, rather than outside of them, is what keeps it defensible and scalable.

Skills and competencies: not mandatory, but increasingly decisive

While skills and competencies are not required on day one, they materially strengthen pay equity logic. They clarify role differentiation, make evaluation criteria concrete, support transparent progression, and improve reporting quality.

For many organizations, recruitment data is the most practical starting point — job descriptions already contain much of the necessary information. The key is to start small and expand deliberately.

Data accuracy is non-negotiable

Pay equity analysis goes far beyond salary averages. It requires accurate job data, compensation components beyond base pay, demographic context, and consistent definitions across countries.

The directive mandates adjusted pay gap reporting by worker category. Partial or inconsistent data is therefore not just a quality issue — it is a compliance risk. “Mostly accurate” is not sufficient when employees can request explanations. Start where you are, but start early.

Reporting and governance: from reporting to reasoning

Organizations typically combine SuccessFactors data with other sources using Story Reports, SAP Business Data Cloud, or external data platforms. The tooling matters less than the governance behind it. Clear ownership, defined request processes, and consistent interpretation are what turn reports into defensible decisions.

Where most organizations are today

In practice, organizations tend to fall into three patterns.

1. Some are structurally ready and need support accelerating reporting.

2. Others are partially but require alignment and cleanup.

3. Many are earlier in the journey, with hidden structural risk.

Understanding where you actually stand determines what to fix first — and what can wait.

Pay equity readiness is an operating-model decision

The EU Pay Transparency Directive is not just a compliance exercise. It forces organizations to confront how they define work, how consistently they apply structure across countries, and whether they can credibly explain pay decisions.

Organizations that treat this as a reporting task will scramble late.
Those that treat it as an operating-model upgrade will be ready — and trusted.

Why work with Effective People?

We have been implementing and advising on SAP SuccessFactors for over two decades. We are brought in when organizations need to move beyond configuration and make their structure, data, and decisions defensible.

That depth matters now because:

• The directive assumes job architecture already exists

• Reporting exposes structural shortcuts

• Weak design decisions compound across countries

Organizations trust us because we have seen how these decisions play out — not just in theory, but in production.

Where do you actually stand on pay equity readiness? We can help you assess pay equity readiness using your existing SuccessFactors data, identify structural risk before reporting becomes mandatory, and define a realistic, phased path to compliance — without over-engineering.