International nurse pay comparisons

In this chapter we cover two main objectives. First, we compare UK nurses’ current earnings with those of comparator OECD countries. This gives some insight into the variations in earnings of nurses in different countries which are broadly comparable, and in some cases are in competition for international recruitment. We then give brief summaries of how nurses’ pay is determined in comparator countries, and report on any recent changes in processes. Our aim is to provide insights into some of the different pay models that exist, to highlight these alternative approaches and flag any scope for UK application. This is particularly relevant as the UK has historically relied heavily on international recruitment for nurse staffing, and may increasingly have to compete with other OECD countries for a nursing labour supply pool which may not be growing quickly enough to meet overall demand in the coming years.

International earnings comparisons

We use OECD data dating back to 2000 on the average (mean) gross annual incomes of full-time registered nurses working in hospitals or in all health care facilities in some countries. The OECD time series begin in different years for different countries, depending on data availability. As NHS Digital is the source for data on UK nurses’ earnings, the UK time series begins in 2009 (when NHS trusts started using the ESR, as noted in Chapter 2). However, to provide a more complete picture on international comparisons, we use data going back to 2000 or as far back as possible for other countries. Our analysis compares the UK with the overall OECD average (from countries which provide data, with some gaps resulting from a lack of data provision in some years) and in particular with four key comparator countries: Australia, Canada, New Zealand and the United States. Annex 4 provides detail on the OECD data underpinning the numbers for the UK and these key comparator countries.

We start by considering hospital nurse earnings converted in US dollars and adjusted for purchasing power parity (PPP), which provides a measure of the standard of living in each country. By this PPP measure, UK nurses’ earnings have been lower than in comparator countries in recent years (Figure 11). In the decade to 2019, the UK has fallen below the OECD average, which in part reflects the impact of the 7-year UK public sector pay cap.

Figure 11: Hospital nurses’ (full time) average gross annual FTE earnings in selected OECD countries, 2000–2019*

Source: OECD Health Statistics: Remuneration of health professionals (https://stats.oecd.org/) Note: These estimates are based on OECD data on hospital nurses’ remuneration. Remuneration is defined as average gross annual income, including social security contributions and income taxes payable by the employee. It should normally include all extra formal payments, such as bonuses and payments for night shifts and overtime, but it does not account for differences in hours worked and pension payments and so cannot be used to compare total reward packages across countries. National statistics have been converted to USD and adjusted for PPP to provide an indication of the relative economic wellbeing of nurses compared with their counterparts in other countries. The data are for salaried hospital nurses, a category that covers certified/registered nurses actively practising in public hospitals and also in other health care facilities in some countries. In some countries, it includes all qualified nurses, while in others (eg in Canada and the United States) it only includes registered nurses and not licensed practical or vocational nurses. 2020 data were not available at the time of writing.*The ‘OECD 5’ refers to the UK, Australia, Canada, New Zealand and the United States. UK data apply to England only and begin in 2009 as they are sourced from NHS Digital’s ESR system, which NHS trusts started using in 2009. For further detail on the data, see Annex 4.

In addition to absolute earnings, the OECD data include estimates of the ratio of mean hospital nurse earnings to the mean wage of all workers in the economy. This is a measure of the relative earnings of hospital nurses compared to other workers.

UK hospital nurses’ earnings relative to average full-time employee earnings have been the lowest of the selected OECD comparators across the period since 2009 and have generally been below the OECD average (Figure 12). Notwithstanding some limitations (see Annex 1), the data highlight the impact of the public sector pay cap: average hospital nurse earnings in the UK exceeded average full-time employee earnings in 2009, but had fallen just below the latter by 2019 (the ratio fell from 1.08 to 0.99 in this period). UK hospital nurses’ earnings trail behind comparable economies both in absolute and relative terms (Figure 13).

Figure 12: Hospital nurses’ average FTE earnings relative to average full-time employee earnings, selected OECD countries, 2000–2019*

Source: OECD Health Statistics: Remuneration of health professionals (https://stats.oecd.org/) Note: These estimates are based on OECD data on hospital nurses’ remuneration. Remuneration is defined as average gross annual income, including social security contributions and income taxes payable by the employee. It should normally include all extra formal payments, such as bonuses and payments for night shifts and overtime, but it does not account for differences in hours worked and pension payments and so cannot be used to compare total reward packages across countries. The income of nurses is compared to the average wage of full-time employees in all sectors in the country. The data are for salaried hospital nurses, a category that covers certified/registered nurses actively practising in public hospitals and also in other health care facilities in some countries. In some countries, it includes all qualified nurses, while in others (eg in Canada and the United States) it only includes registered nurses and not licensed practical or vocational nurses. 2020 data have not been included as they are provisional and may reflect some impacts of the COVID-19 pandemic.*The ‘OECD 5’ refers to the UK, Australia, Canada, New Zealand and the United States. UK data apply to England only and begin in 2009 as they are sourced from NHS Digital’s ESR system, which NHS trusts started using in 2009. For further detail on the data, see Annex 4.

Figure 13: Hospital nurses’ average gross annual FTE earnings in absolute terms (US dollars, PPP adjusted) and relative to the average wage of all full-time employees, OECD countries, 2019 or latest year*

Source: OECD Health Statistics: Remuneration of health professionals (https://stats.oecd.org/) Note: These estimates are based on OECD data on hospital nurses’ remuneration. Remuneration is defined as average gross annual income, including social security contributions and income taxes payable by the employee. It should normally include all extra formal payments, such as bonuses and payments for night shifts and overtime, but it does not account for differences in hours worked and pension payments and so cannot be used to compare total reward packages across countries. National statistics have been converted to USD and adjusted for PPP to provide an indication of the relative economic wellbeing of nurses compared with their counterparts in other countries. The income of nurses is compared to the average wage of full-time employees in all sectors in the country. The data are for salaried hospital nurses, a category that covers certified/registered nurses actively practising in public hospitals and also in other health care facilities in some countries. In some countries, it includes all qualified nurses, while in others (eg in Canada and the United States) it only includes registered nurses and not licensed practical or vocational nurses. 2020 data have not been included as they are provisional and may reflect some impacts of the COVID-19 pandemic.*The OECD average is the average for 31 OECD countries for which data were available (excluding Denmark where no data beyond 2013 were available and excluding Turkey where no data on the ratio of average hospital nurse earnings to the average earnings of all full-time employees were available). UK data apply to England only and are sourced from NHS Digital’s ESR system. For further detail on the data, see Annex 4.

Nurse pay determination processes in other OECD countries

In this section we describe the nurse pay determination process in selected OECD comparator countries, in order to give some insights into the different models in use. We examined three areas of comparison in particular:

  • The focus of the overall approach – local or national.
  • What additional inputs were used to address difficult to fill posts, regions and specialties.
  • How these countries have responded to the COVID-19 pandemic, in terms of any specific additional pay supplements, recognition or other changes.

The countries we selected for comparison are Australia, Canada, Germany, New Zealand, Sweden and the United States. These countries have a broadly similar expenditure on health (with the exception of the United States, which is much higher) and include several Anglophone countries with a similar approach to nurse education, regulation and recognition of trade unions for collective bargaining. Further, several of these countries are direct competitors in recruiting nurses from other countries, notably India and the Philippines.

Table 3 highlights these aspects of the pay determination model in each country, as well as in the UK for comparison purposes.

Most of these countries have a national or regional framework for nurses’ pay determination, underpinned by union recognition and collective bargaining. The majority of the countries also have options for targeted additional incentives for posts that are particularly difficult to fill, and most have offered some form of COVID-19 ‘bonus’ earnings award for nurses, in recognition of the front-line role played by nurses during the pandemic.

Table 3: Summary of nurse pay determination processes based on information from national nurses’ associations, selected OECD countries

Summary of nurse pay determination processes

Is there a specific additional pay focus on ‘difficult’ geographic areas or specialties?

Impact of COVID-19: any additional payments and/or changes to pay determination processes?

UK

Independent review body makes recommendations. Governments in the four UK countries then either implement or stage/delay implementation. Some divergence between four UK countries. Process largely suspended during 7-year public sector pay cap, until 2018/19.

Additional payments for designated high cost of living areas; not always used. Standard additional payment for London location.

NHS Northern Ireland, Scotland and Wales made one-off COVID-19 payments; NHS England did not.

Australia

State or ‘enterprise’ level collective bargaining, underpinned by national ‘safety net’.

Specific emphasis on rural/remote areas. Higher starting salary in Northern Territory (remote/rural) and Australian Capital Territory (where capital city Canberra is located).

Three bonuses of AUD$800 paid to direct care staff in aged care.

Canada

Provincial/ territorial (P/T) level collective bargaining, for nurses only.

Yes, some at P/T level and others at individual employer levels. They include signing bonuses, relocation allowances, educational allowances, return for service agreements, relocation assistance, retention bonuses, housing allowances and northern allowances for fly-in communities.

Several P/T governments gave a CAD$4/hr bonus for 16 weeks. Other governments gave a one-time lump sum COVID-19 danger pay of CAD$1,200.

Germany

Collective bargaining at state or local level; different modalities depending on ownership model (state/church/NGO/private).

Yes. Often a sign-on bonus or a higher salary. However, these additions are not reimbursed by the health or long-term care insurance.

There have been three COVID-19 bonuses for nurses: the first for nurses working in nursing homes; the second for nurses in hospitals with a minimum of COVID patients (approx 1/3 of all hospitals qualified); and in April 2021 an additional bonus for nurses in hospitals. The national bonuses are between 500 and 1,500 Euro depending on hours worked. There are additional bonuses in some of the Länder (states).

New Zealand

Note: At the time of writing (early October 2021), the New Zealand Nurses Organisation was in dispute with employers and government and had begun a planned schedule of industrial action in support of its pay claim; this had then been suspended because of pandemic impact.

In the public sector there is a national approach: a single national Multi Employer Collective Agreement (MECA). There is a separate national MECA for nurses in primary health care. Elsewhere in the private sector, it is done either through collective bargaining or set though Individual Employment Agreements (IEAs).

A separate pay equity claim is also in progress.

No, in terms of incentives to fill vacancies or attract people to hard-to-fill posts.

No changes to the payment systems in New Zealand since the impact of COVID-19, only a delay in the bargaining round.

Sweden

Local wage setting between employer and nurse, underpinned by a collective agreement.

Some employers have offered a higher salary, notably to attract younger nurses – this has led to compression of differentials with older and more experienced nurses. The union is now focused on increasing differentials, with special priority given to wages for ‘the specially skilled’ among their members in the public sector (regions and municipalities).

At the beginning of the pandemic, a crisis agreement was signed between the union and employers’ organisation. The average working week was increased to 48 hours and a ‘non-stop standby’ mode agreed. Nurses received additional enhanced pay for working additional hours. The agreement was activated at county or municipality level after approval by the employer body: SKR (the Swedish Association of Local Authorities and Regions), making sure that all four of the criteria below were met.

A crisis is an event or series of events that:

  • differs from what is normal
  • implicates a serious social disturbance
  • demands immediate response
  • leads to an extensive and crucial effect on staffing.

United States

Localised; often individualised. Only 20.4% of US registered nurses are in collective bargaining units.

Additional incentives, eg loan repayment/forgiveness, to work in a designated HPSA (Health Professions Shortage Area). Can be additional one-off, lump sum payments or bonuses to recruit to specific posts.

Traveller nurses have received significant pay increases from employers if they relocate to COVID-19 impacted regions. Traveller ICU nurses’ weekly earnings increased by 3% to 61% in a sample of six states, January–July 2020.

Sources: Authors, based on information provided by the Australian Nursing and Midwifery Federation, Canadian Nurses Association, Deutscher Berufsverband für Pflegeberufe (The German Nurses Association), New Zealand Nurses Organisation, Vardforbundet (the Swedish Association of Health Professionals), American Nurses Association.

Table 3 highlights that there are a variety of pay determination approaches in place. Most countries use a system based on trade union recognition and collective bargaining. The main locus of bargaining varies – national, state/province or local – in part reflecting the health system structure, ownership model and sources of funding. Sweden places emphasis on individual employment contracts, but this approach is shaped by an overall framework that is embedded in trade union recognition and local agreements. Most of the other countries use an underpinning frame of national or regional/federal collective bargaining. The exception is the United States, where local pay determination prevails, often without collective bargaining and recognised trade unions.

In comparison to these other countries, the UK stands out for having established an independent review process as a central element in the pay determination process for nurses working in the public sector.

All of these other countries also report a range of pay related responses to addressing hard-to-fill posts, which include higher pay rates, pay supplements, one-off sign on or lump sum bonuses, loan forgiveness, relocation allowances, educational allowances, return for service agreements, relocation assistance, retention bonuses and housing allowances. The variable nurse labour market challenges that exist in the UK – in part because of cost of living variations and in part because certain specialties are regarded as less attractive – are also evident in these other countries.

The effects of COVID-19 on the wellbeing and workload of the nursing workforce in these countries have varied, reflecting overall variability in the prevalence of the pandemic. However, all the countries have had to redeploy the workforce in preparation for surge capacity, and most have experienced very significant increases in surge-related workload, stress and reported burnout. All with the exception of England and New Zealand report having made some type of additional COVID-19 related payment to nursing staff. The level of payment has varied but has usually been presented as a specific COVID-19 related bonus or supplement in recognition of the additional stress and workload. At the time of completing this report, the nursing union in New Zealand is in dispute with employers and government. It had begun a scheduled programme of industrial action in support of a pay claim in July 2021, but this was suspended because of the need to respond to the impact of the pandemic.


*** The OECD average covers as many countries as possible depending on data availability in any given year between 2000 and 2019 (eg the 2013 average includes Denmark as data for Denmark were available, but in 2014 data were not available for Denmark and so the 2014 average excludes Denmark).

††† The OECD average covers as many countries as possible depending on data availability in any given year between 2000 and 2019 (eg the 2013 average includes Denmark as data for Denmark were available, but in 2014 data were not available for Denmark and so the 2014 average excludes Denmark).

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