BLS: Growth in Total Compensation Costs Kicks Up
Dec 22, 2023
The amount that
employers spent on total employee compensation grew at a faster rate in the
third quarter of the year than in the second, according to new figures out
today.
Employers
spent 1.2 percent more on wages and benefits in September compared to June,
according to the latest Employer
Costs for Employee Compensation report, released Dec. 15 by the U.S.
Bureau of Labor Statistics (BLS). Comparatively, employers spent just 0.59
percent more on wages and benefits in June 2023 compared to March 2023.
Total
employer compensation costs for private-industry workers averaged $41.53 per
hour worked in September. Wages and salaries averaged $29.34 per hour worked
and accounted for 70.6 percent of employer costs, while benefit costs averaged
$12.19 per hour worked and accounted for the remaining 29.4 percent, according
to the report.
That's
up from the total employer compensation costs for those same workers in June:
Then, total employer compensation costs for private-industry workers averaged
$41.03 per hour worked. Wages and salaries averaged $28.97 per hour worked,
accounting for 70.6 percent of employer costs, while benefits costs averaged
$12.06 per hour worked, accounting for the remaining 29.4 percent, according to
the BLS' previous report.
Those
costs for private-industry workers are significantly lower than the ones for
state and local government workers: Total employer compensation costs those
government workers averaged $59.90 per hour worked in September 2023. Wages and
salaries averaged $37.09 and accounted for 61.9 percent of employer costs,
while benefit costs averaged $22.81 and accounted for 38.1 percent.
The
Employer Costs for Employee Compensation report comes as inflation in the U.S.
continues to cool. The yearly rate of inflation dipped to 3.1 percent in
November, according to the
latest Consumer Price Index (CPI) from BLS released this
week. Still, core inflation, which excludes volatile food and energy
components, rose 0.3 percent on the month, and 4 percent from a year
earlier. Meanwhile, employees have continually been struggling with high costs
of living, with a recent Bank
of America report finding that employee financial
well-being has hit an all-time low.
Employers
have been hiking employee pay over the past year in an effort to help with
employees' inflation challenges. Recent reports find that employers are
planning to continue fairly competitive pay hikes in 2024, with consulting firm
WTW finding that employers will boost salaries by an average of 4 percent next
year.
Benefits Breakdown
Aside
from pay, what employee benefit offerings are costing the most for
employers? Employer costs for overall paid leave benefits (which include
vacation, holiday, sick and personal leave) for private industry workers
averaged $3.09 per hour worked and accounted for 7.4 percent of total
compensation.
Health
insurance accounts for 6.9 percent of total compensation, followed by Social
Security and Medicare contributions (6 percent) and vacation time (3.8
percent), according to the BLS report.
Total
benefits costs cover 18 items across five major categories, according to the
BLS. Those are paid leave (vacation, holiday, sick, and personal leave);
supplemental pay, such as overtime and premium; insurance (life, health,
short-term and long-term disability); retirement and savings; and legally
required benefits, such as Social Security and Medicare.
Source: SHRM