What the EU’s Procurement shift could mean for workforce disclosure

For years, companies have treated workforce disclosure as a reporting obligation – something undertaken to meet regulatory requirements, reassure investors, or tick an ESG box.

The EU’s proposed public procurement reforms indicate the fourth emerging reason: commercial access.

With the new policy, governments can start to use their purchasing power to reward responsible practices. This means companies able to evidence strong workforce governance, human rights oversight and supply chain transparency may soon find themselves at a competitive advantage when bidding for public contracts.

Workforce transparency, in other words, is shifting from a disclosure obligation to a commercial pre-condition.

Why this matters at scale

The numbers make the shift hard to ignore. Governments across the EU spend an estimated €2.6 trillion each year on public contracts, giving them considerable influence over business practices. As this spending is funded through public resources, governments increasingly want assurance that companies receiving it are managing their workforce and supply chains responsibly.

Until now, the rules haven’t always supported that ambition. Fragmented legislation, divergent national approaches and a persistent focus on lowest-price awards have limited how effectively social, environmental and innovation criteria factor into procurement decisions.

The new proposal changes that: public buyers will be required to give meaningful weight to quality when awarding contracts. Quality criteria must account for at least 30% of the evaluation, increasing to 50% for labour-intensive contracts.

This shift matters. Once quality carries real, binding weight, companies may need to demonstrate things like social inclusion, gender equality, decent working conditions, human rights protection across their supply chains – not just state that they exist.

Are companies ready?

The Workforce Disclosure Initiative (WDI), which gathers workforce data from thousands of companies each year, points to significant gaps between what procurement decisions will soon expect and what most companies can currently demonstrate.

Only 40% of companies clearly describe how workforce matters are governed across their supply chains, while more than half (54%), provide no explicit description at all. Such limited disclosure offers little reassurance, making it difficult to determine whether workforce issues are being actively managed or simply overlooked.

Mapping tells a similar story. Knowing who your suppliers are and who their suppliers are, is the foundation of effective risk management. Yet, most companies only map at surface level; just 5.4% look beyond their most immediate suppliers. As a result, workforce issues can remain hidden in the deeper layers of the supply chain. Even when concerns arise, workers are rarely given a direct voice. Less than one in five companies consult workers on the most pressing human rights issues, and even fewer of them (14.1%) include worker interviews as part of their supply chain monitoring efforts. Instead, most rely on audits and paperwork that reflect management’s view of compliance, rather than the experiences of the workers most affected by these practices.

Put simply, many companies would struggle to provide the kind of evidence procurement decisions increasingly expect.

A well-supported workforce is inherently more stable, productive, and resilient. Increasingly, however, workforce disclosure serves a dual purpose: the same evidence that builds investor confidence and demonstrates regulatory compliance can also strengthen a company’s eligibility for public contracts.

This is really a story about competitiveness, not just compliance.

A reform with binding requirements on quality and social criteria is taking shape, but the market may not yet be ready for it. Companies that have treated workforce transparency as a reporting obligation, rather than a capability to strengthen, may find themselves at a disadvantage. Not because they are less responsible. But because they are less prepared for the expectations of a changing procurement landscape. The challenge, therefore, is not only one of performance but also of visibility. Structured disclosure frameworks, such as the WDI, can help companies better understand and communicate how workforce issues are managed across their operations and supply chains, supporting stronger preparedness for evolving expectations.