For years, hiring has started with the same awkward dance. Candidates wanted to know the salary. Employers preferred to discuss everything else first. So both sides spent weeks avoiding the question everyone knew would eventually come.
"What's the salary?"
That dance is now over.
Under the EU Pay Transparency Directive, employers are expected to share salary information before the first interview. Just as importantly, they can no longer ask candidates about their current or previous salary.
Many founders see this as another compliance requirement, but I see it differently. I believe salary transparency has the potential to make startup hiring better, not because publishing a salary range magically improves recruitment, but because it forces companies to focus on what actually matters.
Transparency removes friction
One of the biggest misconceptions is that salary transparency makes hiring harder. In reality, it removes one of the biggest sources of wasted time.
Imagine a startup refusing to reveal the price of its product until after three sales meetings. Most customers would simply walk away.
Yet that's how recruitment has worked for years. Candidates have gone through multiple interviews only to discover the salary was nowhere near their expectations. Hiring teams have invested weeks in people who were never realistically going to accept the offer.
Nobody wins.
Salary transparency doesn't raise expectations. It reveals them earlier. And that's a good thing.
Salary isn't what scares great candidates away
One concern I hear repeatedly is that publishing salary ranges will reduce applications. I don't buy it. In my experience, salary ranges rarely scare away strong candidates. Poor hiring processes do.
Slow communication, five interview rounds without a clear reason, weeks without feedback, interviewers who aren't aligned.
That's what candidates remember. That's what they tell their friends. A salary range won't fix a broken hiring process, but hiding it won't save one either.
Startups have never won by paying the most
Many startup founders worry they simply can't compete with big tech salaries. The truth is, they never could. And yet, great startups have always managed to attract exceptional people.
Not because they offered the biggest pay cheques, but because they offered something different: ownership, responsibility, learning, speed, equity and the chance to build something meaningful. Salary transparency actually strengthens that story.
When compensation is clear from the beginning, candidates make decisions based on the whole opportunity, not just the number. The people who still choose your startup despite knowing the salary are often exactly the people who will thrive there.
One of the best changes nobody talks about
For me, one of the most important parts of the new legislation isn't salary ranges. It's the fact that employers can no longer ask candidates about their previous salary.
For years, negotiations often started with the wrong question, "What are you earning today?" But your previous salary says surprisingly little about your market value today.
Maybe you accepted lower pay for equity, maybe you stayed with the same employer while the market changed dramatically or maybe you were simply underpaid. None of those reasons should determine what your next employer offers you.
Instead, companies should ask two much better questions:
What is this role worth?
What is this candidate worth to our business?
That's a healthier conversation for everyone. It also pushes companies to build real compensation philosophies instead of negotiating every offer from scratch.
Transparency doesn't create unfairness
Some leaders worry that salary transparency will create tension inside their organisations.
It probably will, but only where problems already exist. Transparency doesn't create unfairness. It exposes it.
If two people are doing similar work with similar responsibilities but earning significantly different salaries without a clear explanation, that problem existed long before salaries became more visible. Employees simply couldn't see it.
The companies that embrace transparency will inevitably build clearer salary frameworks, career levels and compensation principles. That's not just good for compliance. It's good leadership.
This isn't really about salary
If there's one mindset shift I'd encourage founders to make, it's this: Stop thinking this is about salary. It's about trust.
Candidates expect transparency far beyond compensation. They want to understand how hiring works, how decisions are made, what success looks like and why they should join your company.
Salary is simply the first thing that's now required.
The startups that will continue attracting the best people won't necessarily be the ones offering the highest salaries.
They'll be the ones that can confidently answer three simple questions:
Why this salary?
How was it determined?
Why is this company worth joining?
Those questions have always mattered, now they simply matter earlier.
The companies that will benefit most
Salary transparency won't suddenly make companies better at hiring. Poor communication will still lose candidates and weak employer brands won't become stronger overnight.
But transparency removes one of the biggest sources of unnecessary friction, for both candidates and employers.
The biggest cost in hiring isn't paying someone a little more. It's spending weeks on conversations that were never going to lead anywhere.
That's why I believe salary transparency isn't something startups should fear. It's an opportunity to build faster, fairer and more honest hiring processes.
And in a market where the best talent has more choice than ever, honesty is becoming one of the strongest competitive advantages a company can have.
Reet Kaurit is the co-founder of TalentHub and one of the first recruiters at Wise. Over the past decade, she has helped hundreds of startups and scaleups hire technical specialists, leaders and executives across Europe. She regularly shares practical insights on recruitment, leadership and the future of work.
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