What’s the real cost to keep an employee at your company? How does this expense compare with other businesses in your industry or city? One useful benchmark is the Employer Costs for Employee Compensation (ECEC) report from the US Bureau of Labor Statistics. This report considers the average hourly cost to compensate employees, including wages or salaries, along with benefits like health insurance and retirement contributions. There’s a lot of information to digest in these reports, so we’ve broken out the key findings.
Civilian, Private, and Government Workers: Benefit Costs are Highest for Government Employees
The ECEC report looks at three employee groups: civilian, private, and government workers. How do the three groups stack up?
The average government employee costs his or her employer $52.36 per hour. That’s much higher than civilian workers ($38.20 per hour) and private industry workers ($35.96 per hour).
Retirement savings and insurance benefits make up 24% of employer hourly costs for government employees, but only 13.9% and 11.6% for civilian and private employees, respectively.
The benefits for government workers is almost equal to the wages of the other two groups. Government workers make $19.93 per hour in benefits — 38.1% of their compensation — while civilian and private workers cost their employers a total of $26.17 and $25.18, respectively.
The above are some of the more significant differences between employee groups. Other compensation components, like paid leave, are almost an identical percentage of each group’s total compensation.
Highest and Lowest Compensation Costs by Occupational and Industry Group
The ECEC report further breaks down the three employee groups, looking at compensation for occupational groups and overall industry groups. A quick overview of these two groups for each type of employee:
Management, business, and financial employees receive the highest total compensation among civilian workers, costing employers $70.86 per hour. Service workers are the lowest, at $20.77 per hour.
Junior colleges, colleges, and universities have the highest civilian ECEC at $60.43 per hour. Health care and social assistance have the lowest civilian ECEC, at $36.72 per hour.
For state and local government workers, primary, secondary, and special education school teachers have the highest ECEC, at $69.03 per hour. About a quarter of that (24.8%) compensation comes in the form of insurance and retirement and savings. Sales and office workers cost employers the least, at $36.58 per hour.
Similar to civilian workers, junior colleges, colleges, and universities lead the way for government workers, with a $60.81 hourly ECEC. While that number is almost identical to civilian employees, the lowest government ECEC — also health care and social assistance — is significantly higher, costing employers an average of $46.72 per hour.
For private industry workers, management, business, and financial employees have the highest ECEC by far, at $70.50 per hour. Service workers are the lowest among the private industry occupational groups, costing employers $17.90 per hour.
Private industry workers also provide the highest costs of any industry group, with the ECEC of aircraft manufacturers coming in at an even $72.00 per hour. That’s nearly double what the manufacturing industry group as a whole costs ($39.86). Accommodation and food services has the lowest ECEC in the private industry, at $15.46.
Employer Costs by Region: Location Matters
In addition to worker type, occupational, and industry groups, another major focus in the ECEC report is a business’s location.
Companies in the West region — which includes states like California, Oregon, Colorado, and Utah — have the highest average ECEC, at $40.69. The Northeast region — including areas like New York, New England, and Pennsylvania — isn’t far behind, coming in at an average of $40.58.
In comparison, states in the South region – Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia – average almost a full $10 less in employer costs per hour worked. The average ECEC is only $31.66 in this region.
For more information on ECEC and how these findings can inform your employee recruitment and retention decisions, contact our expert team.