The NHS Race and Health Observatory has commissioned a major study to calculate the economic cost of racism across England's healthcare system, with findings due to be published in May next year. For NHS people leaders, the research will put hard numbers on workforce problems they already manage daily: discrimination complaints, sickness absence, stalled career progression and retention losses among ethnic minority staff.

The study goes beyond headline costs. Researchers will examine racial inequities in health outcomes, access to treatment, delayed diagnoses and patient experience, alongside the knock-on consequences for the NHS, public finances and wider society. Crucially for HR functions, the work will also analyse system-level fallout — complaints, grievances and litigation — the channels through which workforce discrimination converts directly into financial exposure.

Three organisations will carry out the research: the NHS Health Economics Unit, the NHS Strategy Unit and the charity People Street. The observatory itself is an independent body hosted by the NHS Alliance and supported by NHS England, so its findings will carry weight with national policy-makers as well as local trust leaders.

The commission builds on a cost of racism briefing the observatory published in March 2025. The new study aims to move from that initial framing to a fuller evidence base: where economic consequences of racism actually arise, what can be quantified, where the evidence gaps sit, and where further research or policy action is needed. The observatory says the result will serve as an evidence-based guide for NHS managers, leaders and policy-makers.

What HR teams should watch

The workforce strand touches nearly every core people process. Recruitment, career progression, retention, sickness absence and day-to-day experiences of discrimination all fall within scope. HR directors in the NHS — and arguably beyond it — may soon have monetised arguments to bring to boards that have historically treated equity work as a compliance or reputational matter rather than a financial one.

People Street's role points to how the evidence will be gathered. The charity will contribute what the observatory calls "lived experience" input through a series of local panels, interviews and focus groups, ensuring the quantitative modelling is anchored in staff and patient testimony rather than purely administrative data.

The context is already stark. Separate reporting has found that four in five NHS ethnic minority managers experience racism, that NHS workers have faced a rise in racist abuse, and that nearly a third of nursing and midwifery staff come from ethnic minority backgrounds — making the affected population large enough that even small per-person cost effects would scale substantially across a workforce of that size.

Professor Habib Naqvi, chief executive of the NHS Race and Health Observatory, framed the stakes plainly. "This research has the potential to change how we understand, measure and respond to the true cost of racism in the NHS," he said.

"Racism is not only a profound moral and social injustice; it also carries a significant financial cost to the public purse through avoidable litigation, delayed care, poorer outcomes, workforce harm and lost productivity. But the heaviest toll is borne by individuals, families and communities – and that 'human cost' cannot be captured fully in pounds and pence," Professor Naqvi added.

His caveat matters for how the findings should be used. Even a rigorous economic model will understate the full impact, which means HR leaders should treat the eventual figures as a floor for the cost of inaction rather than a complete account.

For employers outside the NHS, the methodology may prove as useful as the numbers. A framework for tracing where discrimination generates measurable cost — through absence, attrition, grievances and litigation — is transferable to any large organisation seeking to build a business case for equity interventions.

When the findings land in May, expect NHS trusts to face fresh questions about how their own workforce data on discrimination, progression and exit compares with the national economic picture the study will establish.