What is ISCO, and why does it matter for pay transparency?

What is ISCO?

The International Standard Classification of Occupations, known as ISCO, is a system created by the International Labour Organization (ILO) that groups every job in the world into categories based on what people actually do at work.

Think of it as a universal filing system for occupations. Instead of every country, every company, and every HR team using their own labels, ISCO provides a shared structure. A “Software Developer” in Copenhagen and a “Software Developer” in Madrid can be mapped to the same code, making it possible to compare roles across borders, industries, and organisations.

The current version is called ISCO-08, published in 2008. It is still the global standard today.

How ISCO organises jobs

ISCO-08 sorts occupations using two simple ideas: how complex the work is (skill level) and what kind of work it is (skill specialisation).

Skill level: how complex is the job?

ISCO defines four skill levels. These are not about how talented someone is. They reflect the typical education, training, and experience needed to perform the job competently.

Skill Level 4

Professionals

University degree or higher

Skill Level 3

Technicians, associate professionals

Post-secondary education

Skill Level 2

Clerical, service, trades, machine operators

Secondary education

Skill Level 1

Elementary occupations

Primary education

Figure 1: Skill level pyramid

In practical terms: a warehouse assistant (Skill Level 1) does not need a university degree, while a data scientist (Skill Level 4) typically does. ISCO captures that difference without making a value judgement about the person doing the work.

Skill specialisation: what kind of work is it?

Within each skill level, ISCO separates jobs by what they involve: the field of knowledge, the tools used, the materials worked with, and the type of output produced. This is how ISCO distinguishes a nurse from an engineer, even though both may sit at Skill Level 4.

The 10 major groups

Every job in the world fits into one of these 10 groups:

Code	Major group	Skill level
1	Managers	3 + 4
2	Professionals	4
3	Technicians and associate professionals	3
4	Clerical support workers	2
5	Service and sales workers	2
6	Skilled agricultural, forestry and fishery workers	2
7	Craft and related trades workers	2
8	Plant and machine operators, and assemblers	2
9	Elementary occupations	1
0	Armed forces occupations	1, 2, 4

How the codes nest: a quick example

ISCO works like a set of nesting boxes. Each level adds more detail.

Classify roles

Group equal-value work

Calculate pay gaps

Report to regulators

Justify or fix

Figure 3: ISCO provides the foundation for Step 1

The directive requires organisations to:

ISCO works like a set of nesting boxes. Each level adds more detail.

Calculate and report pay gaps by categories of workers performing equal or equal-value work
Provide employees with information about average pay levels for their category
Conduct joint pay assessments if the gap exceeds 5% and cannot be objectively justified
Accept that the burden of proof shifts to the employer to demonstrate pay decisions are fair

Without a structured, objective way to group roles, none of this is possible. You cannot report pay gaps “by category” if you have not defined what those categories are, or how roles relate to each other across departments.

What the directive actually asks for

The directive specifies four factors for determining whether work is of “equal value”:

These four factors map closely to how ISCO already groups occupations. ISCO does not replace a full job evaluation, but it provides the structural logic and shared language that makes evaluation consistent.

According to legal analysis published by Lewis Silkin in November 2025, the directive “does not demand complexity, it demands clarity and consistency.” That means even a classification-based approach, grouping roles into clear levels with objective descriptors, can meet the requirements if it is well documented.

ISCO and ESCO: the EU connection

If ISCO is the global standard, ESCO is its European extension.

The European Commission developed ESCO (European Skills, Competences, Qualifications and Occupations) as a multilingual classification connecting occupations, skills, and qualifications across EU member states. ESCO is built directly on top of ISCO-08.

Major Group

Sub-Major Group

Minor Group

Unit Group

ESCO Level 5: Detailed European occupations

Figure 4: ESCO adds granular occupational detail on top of ISCO-08's universal structure

Every ESCO occupation maps to exactly one ISCO-08 code. If your organisation already uses ESCO for recruitment, workforce planning, or skills development, you are already working within the ISCO framework.

For employers preparing for pay transparency obligations, this matters. ISCO and ESCO together provide a consistent, cross-border vocabulary for describing what people do, and that vocabulary is exactly what regulators will expect.

National adaptations of ISCO

While ISCO-08 provides the global framework, many European countries maintain their own national occupation classification systems that build on it. These national adaptations extend ISCO with additional detail to capture local labour market realities, while preserving compatibility with the international standard.

Here are three examples:

Country	National code	Maintained by	Key detail
Denmark	DISCO-08	Statistics Denmark (DST)	6-digit, 5-level system with 563 groups (vs ISCO's 439). In use since 2010
Switzerland	CH-ISCO-19	Federal Statistical Office (FSO)	Adds a 5th level for Swiss-specific occupations. 5th level revised every 3 years
Spain	CNO-11	National Statistics Institute (INE)	Adds an intermediate level to ISCO-08. Established by Royal Decree 1591/2010

These are not isolated cases. Under EURES Regulation (EU) 2016/589, EU member states are required to either adopt ESCO directly or map their national classification to ESCO. More than 20 countries have submitted mapping tables, including Austria, Belgium, France, Germany, Italy, the Netherlands, Norway, Poland, Portugal, Romania, and Sweden. Each of these countries maintains its own national system, adapted from ISCO-08 to reflect local occupational structures.

For organisations operating across borders, this is significant. Even though each country may use a different code system internally, all of these systems trace back to ISCO-08 as their structural foundation. That shared backbone is what makes cross-border pay comparisons and reporting possible under the EU Pay Transparency Directive.

What this means for your organisation

If you are an HR leader reading this and thinking, “We have never classified our roles this way,” you are not starting from scratch. But you do need a plan.

Here is what to focus on:

1. Understand the framework

ISCO-08 groups occupations by skill level and specialisation. Knowing how it works helps your team speak the same language as regulators, statisticians, and EU institutions.

2. Map your roles consistently

Whether you use ISCO codes directly, ESCO, or a proprietary job evaluation system, the underlying logic should be consistent, objective, and documented. The directive requires categories that are gender-neutral and based on the work itself, not the person doing it.

3. Document everything

The burden of proof now sits with the employer. Every pay category, every job level, and every grouping decision needs a clear, auditable trail. If a regulator asks why two roles are in different categories, you need an answer that holds up.

4. Connect classification to pay analytics

Classification on its own is just labelling. The value comes when structured role data feeds directly into pay gap calculations, salary band visualisation, and compliance reporting. That is where classification becomes action.

This is exactly what Alon is built for

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Career Ladder

Define consistent job levels and criteria

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ISCO Mapping

Map job roles in the relevant ISCO (International/European/National)

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Pay Analytics

Analyse pay gaps and generate compliance reports

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People Profile

Centralise workforce data in one governed place

From structure → to analysis → to compliance, in one platform

The EU Pay Transparency Directive is not a suggestion. It is a law. Organisations with 250 or more employees will need to submit their first pay equity reports by June 2027. Dates can vary depending on each EU Member State’s national mandates.

Without a platform

📊 Scattered spreadsheets

📧 Email threads

📝 Manual reports

⚠️ High compliance risk

With Alon

→ Role classification

→ Pay analytics

→ Compliance reports

✓ Compliant & audit-ready

Figure 5: From classification to compliance

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