Reliable and accurate data is the cornerstone to identifying, quantifying, and addressing the ethnicity pay gap. Comprehensive and accurate data allows for a detailed understanding of the disparities in pay across different ethnic groups and provides a foundation for creating targeted policies and interventions to ensure fair and equitable pay.
Ethnicity is recorded on the Employee Staff Record (ESR) system. Approximately 96% of NHS staff (NHS Workforce statistics, 2024) have their ethnicity recorded on the ESR, meaning that 4% of staff have either declined to offer this data or otherwise do not have data recorded against this field in the ESR. The latest Workforce Race Equality Standard (WRES) data shows that 26.4% of NHS staff (NHS England, 2024b) are from an ethnic minority (up from 17.7% in 2016). A significant contributor to understanding your data is the level of data completeness within your organisation, and where there are gaps, understanding and addressing the barriers to declaration across your staff groups.
Only with consistent ethnicity declaration rates, and disaggregation beyond the broad-brush categories of 'white' and 'ethnic minority', will trust leaders be able to explore the cause behind the disparity and unmask the true lived experience of staff.
Any quantitative analysis can be supplemented with qualitative data from employee surveys, and feedback from employee networks and focus groups. Such qualitative data provides invaluable insights into the lived experiences of staff and the specific challenges faced by intersectional groups.
Calculating the pay gap
Mean and median calculations
To get a fuller picture of any disparity, both the mean and median ethnicity pay gaps should be calculated. The median is often more reliable as it is less affected by outliers, while the mean provides additional context.
- The mean pay gap is the percentage difference between the average hourly earnings of white staff and ethnic minority staff. It is calculated by dividing total hourly earnings for ethnic minority and white staff (separately) and dividing by the number of employees in each group. The difference between the two is the mean pay gap.
- The median pay gap is the percentage difference between the middle value of hourly earnings for white staff and ethnic minority staff. It is calculated by subtracting the median hourly pay of white staff from the median hourly pay of ethnic minority staff, dividing this by the median hourly pay of white staff and multiplying by 100 to give a percentage.
Calculating and analysing both figures helps trusts in making informed decisions and developing targeted strategies to address pay gaps. For example, if the mean pay gap is significantly different from the median, it may indicate the presence of outliers that need further investigation.
Pay quartile analysis
Pay quartiles analysis enables understanding of how employees are distributed across different pay levels and where pay gaps are most pronounced. This method segments employees into four equal groups based on their pay, allowing for a clear view of the representation and pay distribution of different ethnic groups at various pay levels.
Within each quartile, calculating the mean and median pay for white employees and ethnic minority employees allows for a more in-depth analysis. This analysis not only highlights where the most significant gaps exist but also guides targeted interventions.
The need to apply an intersectional lens
Looking at gender and ethnicity separately can mask the compounded disadvantages faced, in particular, by women from ethnic minority backgrounds. When analysing pay gaps, it is important to consider not just one dimension of diversity, such as ethnicity, but multiple intersecting factors that can influence an individual's experience in the workplace. An intersectional lens allows for a more nuanced understanding of pay disparities, revealing hidden inequities that may be masked when looking at amalgamated ethnicity or gender in isolation. For example, while overall pay data might show a smaller pay gap for women or ethnic minority staff, ethnic minority women may experience a significantly larger pay gap compared to white men or even white women.
The Nuffield Trust in their analysis of ethnicity pay gaps within the English NHS identified that an intersection of gender and ethnicity showed variation, with pay gaps generally favouring men among all groups except for black/black British staff, where there was a 3% gap favouring black/black British women (Appleby et al, 2021).
Employees often have multiple identities that intersect in complex ways. For instance, an ethnic minority female nurse might face different challenges compared to an ethnic minority male doctor or a white female nurse. Aggregated data can obscure these unique experiences and challenges.
Understanding variation across multi-disciplinary teams
The majority of NHS staff, including registered nurses and midwives, paramedics, non-clinical staff working in IT and administration, cleaners and porters, are on Agenda for Change (AfC) pay scales (NHS Employers, 2024), which has enabled fairness in terms and conditions "…regardless of age, disability, race, nationality, ethnic or national origin, gender, religion, beliefs, sexual orientation, domestic circumstances, social and employment status, HIV status, gender reassignment, political affiliation or trade union membership" (Appleby et al, 2021). However, data reported annually in the WRES and Workforce Disability Equality Standard (WDES), (NHS England, 2024c) highlight that this does not address the lack of representation of minoritised groups within the higher pay bands, which will impact on median calculations. AfC band 5 has the highest percentage of ethnic minority staff (35.5%), compared to band 9 at the top of the pay framework where 11.2% of staff are from an ethnic minority. 23.0% of staff in band 2, the lowest band in the framework, are from an ethnic minority.
Doctors and dentists as well as very senior managers (VSMs) are on different terms and conditions compared to the majority of NHS staff on AfC. The latest WRES data shows that 46.8% of staff within medicine were from an ethnicity minority. 61% of non-consultant specialists are from an ethnic minority, falling to 40.5% of consultants, showing disparity within seniority among doctors. While levels of representation among senior doctors are higher than in other roles in the NHS, this should not mask the inequity of experience for ethnic minority doctors. The Medical WRES (MWRES) report 2021 highlighted, amongst other indicators, that ethnic minority doctors have to apply for more posts than their white counterparts before they are appointed to a consultant post. They are also less likely to be shortlisted and offered a consultant post. Research by the General Medical Council (GMC) shows that the diversity of the medical register is increasing, with an increase in the number of internationally educated staff (GMC, 2024). This is also seen in data from the Nursing and Midwifery Council (NMC, 2024).
Representation at board
NHS Providers' benchmarking survey, which captures the remuneration details of executive directors (based upon voluntary participation by trusts and foundation trusts), shows that in 2022/23 there were notable disparities in the representation of ethnic minority executive directors compared to white executive directors across various job roles. There was a higher representation of ethnic minority directors employed as medical directors (30%) in comparison to other executive roles. However, ethnic minority people are disproportionately underrepresented in executive communications and estates/ facilities roles as well as chief executive roles.
Our latest findings show ethnic minority executive directors to be earning 1.7% more than white executive directors. This is likely to be due to the higher percentage of ethnic minority medical directors compared to other executive director roles. Medical directors on average have a higher remuneration than other director roles, contributing to a deviation from the overall average remuneration for executive directors from an ethnic minority.
It is important to consider how ethnic minority representation at board level and at all levels of the organisation, may present in ethnicity pay gap data. Trends could include reduction of the mean ethnicity pay gap with no improvement on the median, possibly indicating lack of a talent pipeline to facilitate staff progression. The need for inclusive talent pipelines and support for career development can be seen in the increasing divergence between ethnic minority staff in the NHS overall, reported 26.4% in 2023 and representation at board level (15.6%), (NHS England, 2024d). Whilst board level ethnic minority representation has steadily increased, it has not kept pace with representation overall and has resulted in the gap between the overall workforce and board diversity widening, particularly among executives.