The Equality and Human Rights Commission (EHRC) defines the ethnicity pay gap as the difference between the average (median and mean) hourly pay of ethnic minority and white British people. When ethnic minority people are paid less, overall, than white British people they experience a pay gap. When they are paid more, they experience a pay advantage. The pay gap is often expressed as a percentage of one group's earnings. For ethnicity pay calculations, this would involve employers calculating whether employees in a certain ethnic group earn X% less or X% more than employees of a different ethnicity per hour. A pay gap can be calculated across a whole workforce (Equality Act, 2010).
An ethnicity pay gap audit is different to an equal pay audit, which looks at the pay differences between men and women (of all ethnicities) carrying out similar or equal work. Any potential equal pay issues should be addressed by adherence to Agenda for Change (AfC) terms and conditions and pay framework alongside a robust and objective job evaluation process. Ethnicity pay gap figures are affected by differences in the ethnic composition across job grades and roles.
The NHS England Equality, Diversity and Inclusion (EDI) Improvement Plan (the Plan), published in June 2023, asks board leaders to "develop and implement an improvement plan to eliminate pay gaps" as part of high impact action (HIA) 3 (NHS England, 2023a). This HIA is focused on eliminating total pay gaps, with a specific focus on race, disability and gender. More specifically, the action asks NHS organisations to:
- Implement the recommendations for medical staff from Mend the gap: The Independent Review into Gender Pay Gaps in Medicine in England, and further develop a plan for implementation for senior non-medical staff by March 2024.
- Implement an effective flexible working policy to be used in recruitment campaigns from 2024 to 2026.
- Analyse available data on pay gaps and implement an improvement plan by protected characteristic. Plans for race and sex should be in place by 2024, for disability by 2025 and for other protected characteristics by 2026.
The ethnicity pay gap in the NHS is a complex issue stemming from multiple, underlying causes and interconnected factors. Understanding these is important for developing effective strategies to address the disparity.
While not exhaustive, inequality within both recruitment and employment have been identified as significant contributors to the ethnicity pay gap (Equality and Human Rights Commission, 2017a). These elements often work in tandem, creating a cumulative effect that disadvantages ethnic minority staff throughout their careers.
Within the workplace, systemic racism, defined as policies and practices that exist throughout a whole society or organisation that result in, and support, a continued unfair advantage to some people and unfair or harmful treatment of others based on race or ethnic group, can manifest as barriers to entry, lack of representation in leadership, and unequal opportunities for career advancement for ethnic minority employees.
Traditional recruitment practices can perpetuate biases, resulting in lower diversity, particularly for senior roles. Additionally, the absence of talent management processes that mitigate the impacts of systemic racism result in further exacerbation of disparities. The Plan mandates a focus on inclusive recruitment and talent management within HIA 2, requiring trust leaders to "overhaul recruitment processes and embed talent management processes".
Feedback from trust leaders following the publication of the Plan highlighted a need for support to enable them to formulate actions in response to any identified pay disparities. The information, observations, and resources referenced within this guide are intended to equip trust leaders with the knowledge and understanding of how they can begin to address any disparities highlighted by their ethnicity pay gap reporting. The guide also provides examples of positive action practices and early insights which have supported organisations to successfully advance race equality.