Pay gaps

Learn about the different types of pay gaps and the significance of pay gap data.

11 May 2023

Pay gaps can negatively affect the retention of the NHS workforce. They can make it harder to recruit and can have a detrimental impact on staff experience when in post.  Pay gaps are indicators of inequality and many employers are now taking significant steps to identify and address the causes of the gaps, but there is still much work to be done.

What is a pay gap? 

A pay gap is the difference between the average hourly pay of employees in one group in comparison to another group. For example, women in comparison to men or LGBTQ+ in comparison to heterosexual.  

The pay gap includes all pay elements, including basic pay, unsocial hours payments, supplements and clinical excellence awards. 

This is different to equal pay. Equal pay is a person being paid the same for the same role and it is unlawful to pay someone differently for doing the same job based on a protected characteristic. 

This Chartered Institute of Personnel and Development factsheet explains in more detail about pay fairness and pay reporting. 

Common types of pay gaps 

Gender pay gap 
A gender pay gap is the difference in average earnings between men and women in a workforce. It is mandatory for employers with more than 250 employees to report their gender pay gap. You can find out more about mandatory pay gap reporting and guidance on our our gender pay gap web page and also access advice on how to tackle your gender pay gap.

A study by The Equality and Human Rights Commission shows that over 60 per cent of women would be more likely to apply for a job with an employer with a lower pay gap. Over half (56 per cent) of women said that working at an organisation with a gender pay gap would reduce how motivated they felt in their role. 

Ethnicity pay gap 
Although ethnicity pay gap reporting is voluntary, it is encouraged by the government and is starting to be more widely reported in the private sector. The number of employers publishing their ethnicity pay gaps has increased from 11 per cent in 2018 to 19 per cent in 2021. Access the recently published government guidance.

Disability pay gap 
UK ONS data shows conclusively that a disability pay gap exists. The 2021 Workforce Disability Equality Standard report shows that 59 per cent of trusts have five or fewer disabled staff in senior positions. The government has published guidance on voluntary reporting on disability, mental health and wellbeing. Currently, it is not mandatory for organisations to monitor their disability pay gap. 

LGBTQ+ pay gap 
A Trade Union Congress (TUC) report highlights only one in eight employers monitor their LGBTQ+ pay gap. However, a 2019 LinkedIn and YouGov survey showed the UK had a 16 per cent LGBTQ+ pay gap. Once again, it is not mandatory for organisations to monitor the LGBTQ+ pay gap. 

Social mobility pay gap 
The Social Mobility Commission report shows that when an individual from a working-class background is in a professional job, they earn on average 17 per cent less than more privileged colleagues. This gap leaves thousands of workers feeling undervalued and underpaid. 


The importance of data collection

Gathering and analysing data on a regular basis allows organisations to see how certain groups are progressing in comparison to others, whether they are achieving promotions or whether they are getting stuck at certain levels.   

The data can also indicate whether specific groups are more likely to be recruited into lower paid roles and can also indicate gaps in retention and whether employees from different groups leave the organisation at different rates.

Taking action to close the gaps 

Create an action plan - Once a gap is recognised, organisations should create an action plan to address it. The action plan should address the key gaps and trends that the pay gap data has indicated. The gender pay gap implementation model demonstrates the action plan in medicine. 

Recruitment, development and promotion - Do all candidates and staff have equal access to jobs, development and promotion? Consider providing additional support to some staff groups. Create bespoke development programmes targeted at ethnically diverse colleagues, run interview skills workshops to level the mobility playing field and review job adverts to ensure the wording does not exclude certain groups from applying.  

Take a look at our guide on how to recruit and support disabled staff in the NHS as an example of positive action that could be taken. 

Leadership – Does the organisation have a diverse leadership team? Having a diverse trust board that reflects it’s workforce can provide the tone of governance that is needed to address pay gap issues. 

Flexible working – Do all staff have equal access to flexible working at all grades? Flexible working arrangements can enable, for example, women to remain in work and stay in roles that reflect their skills, thereby potentially reducing the gender pay gap. 

Performance related pay – Are processes for discretional pay transparent and fair?  Conduct a review to identify any issues.

Pay gaps don’t give us all the answers but they are a good indicator of inequalities and provide a helpful measure of whether inequalities are improving or worsening. By looking at the gaps and demographics at different grades we can pinpoint areas we need to focus on.