Industries with the Highest Labor Costs in the US in 2024

1. Public Schools in the US

Labor Costs for 2024: $663.2B

Public schools include traditional elementary (kindergarten through fifth grade), middle (sixth or seventh through eighth grade) and high schools (ninth through 12th grade), in addition to charter and magnet schools. Revenue depends on government funding from tax revenue and borrowing.

Falling federal funding for elementary and secondary schools hasn't deterred revenue growth. Since 2018, state and local governments have maintained revenue surpluses. Strong property tax revenue enabled state and local governments to borrow less and raise spending on public schools. State and local governments benefited from generous federal support in the wake of COVID-19, coupled with tax revenue from resident income... Learn More

2. Hospitals in the US

Labor Costs for 2024: $476.5B

Hospitals have a central role in healthcare delivery in the United States. As the frontline for specialized and emergency care, hospitals have patient streams regardless of economic conditions, but rising incomes and broader insurance coverage facilitate access to elective care. Since the onset of the COVID-19 pandemic in 2020, hospitals have coped with persistent and unprecedented challenges to their resources, finances and workforce. Federal policies and billions of funding directed to hospitals alleviated the initial financial impact of revenue loss stemming from delays in elective care and drops in ER visits. Still, the pandemic took a major toll on supply... Learn More

3. IT Consulting in the US

Labor Costs for 2024: $287.9B

Due to low capital requirements, a sizable number of operators are small nonemployers or independent contractors. IT Consulting has experienced a shift in technological change towards cloud computing and data analytics. The constantly changing character of the industry has led larger players to acquire smaller companies and develop new products to remain competitive. Industry revenue has grown at a CAGR of 2.0% to $665.9 billion over the five years to 2023, including a rise of 4.0% in 2023 alone.

Shifting technology trends have boosted demand for new services and encouraged companies to replace older, more traditional technology. Operators compete on offering... Learn More

4. Colleges & Universities in the US

Labor Costs for 2024: $244.1B

As job markets have weakened and employment prospects have worsened, more high school graduates have to forgo joining the workforce and opted for postsecondary education. However, this trend reversed as COVID-19 struck. Nonetheless, the shift to fully remote learning amid the pandemic somewhat hindered demand for colleges and universities, especially among private universities. This caused enrollment at private nonprofit universities to decline in 2020 and this trend continued into Spring 2022. Overall, revenue for the Colleges and Universities industry has fallen an annualized 1.3% to $582.6 billion over the five years to 2023, including a 1.1% increase in 2023 alone.

According... Learn More

5. Professional Employer Organizations in the US

Labor Costs for 2024: $218.3B

Over the five years to 2023, revenue in the Professional Employer Organizations industry has increased at an annualized rate of 8.8% to $351.6 billion, including an expected increase of 2.1% in 2023 alone. During the past five years, industry revenue has been more volatile than usual due to high volatility in the labor market caused by COVID-19. With the unemployment rate more than doubling in 2020, industry revenue experienced a 1.3% decline in the same year. However, a strong recovery in the labor market in subsequent years caused industry revenue to increase 20.8% in 2021 and 16.5% in 2022. In... Learn More

6. Specialist Doctors in the US

Labor Costs for 2024: $213.0B

Specialist doctors are physicians whose practice is limited to a particular branch of medicine or surgery. Overall, specialty practices have benefited from rising total health expenditure, increased demand from an aging population and improving access to health insurance due to recent reforms. Industry operators had to cancel or delay elective procedures due to the COVID-19 pandemic, which tend to account for the bulk of revenue. Due to the specialized nature of industry services, it has been more difficult for industry operators to adopt telehealth in comparison to primary care doctors. As the economy moved beyond the COVID-19 pandemic, industry revenue... Learn More

7. Software Publishing in the US

Labor Costs for 2024: $208.9B

This report is sitting on a computer with an industry-produced operating system. If this report was downloaded, it exists within industry productivity software. The major companies writing operating systems (Microsoft, Apple, Google) have become some of the world's most significant entities, primarily thanks to their omnipresence in the devices people use almost hourly. In the past 20 years, industry revenue more than tripled, untouched by the Great Recession and boosted by the pandemic. Microsoft Word and Adobe Photoshop have enabled executives and schoolchildren to easily command words and images. The industry has been richly rewarded for these world-changing applications, climbing... Learn More

8. Management Consulting in the US

Labor Costs for 2024: $195.3B

Providing varied services to diverse downstream markets with unique needs allows management consultants to weather changing economic conditions. Extreme shocks like the COVID-19 pandemic led to revenue declines, but sometimes clients need consulting services in bad times, which buffers revenue declines and ensures low revenue volatility. Bouncing back from the COVID-19 pandemic, industry-wide revenue grew at a CAGR of 1.1% to $329.9 billion over the past five years, growing 0.1% in 2023 alone.

Technological change in client markets will spur demand for various consulting services, but challenge profit margin growth. Advisory in the age of digital transformation requires employees with unique... Learn More

9. Medical Group Practice Management in the US

Labor Costs for 2024: $180.1B

Medical group practice management has expanded as more physicians integrate into more extensive multispecialty networks. Burdened by medical school debt and seeking regular hours, more young physicians opt out of private practices, joining health systems or medical groups instead. Joining larger practices like medical groups offer several advantages. Consolidated systems have the power to improve patient outcomes, create efficiencies and secure higher prices in payer-provider negotiations. An increasing concentration of healthcare providers nationwide has expanded revenue at a CAGR of 2.5% to an estimated $461.7 billion over the past five years. As health expenditure steadies, revenue growth will slow to... Learn More

10. Portfolio Management & Investment Advice in the US

Labor Costs for 2024: $156.0B

Portfolio Management industry operators manage asset portfolios for a fee or commission. In the last five years, the industry has experienced countervailing trends. For the majority of the period, rising assets under management (AUM) as a result of rising asset prices and growing disposable income have increased the base of assets industry operators charge fees on. Increased investor preference for passive asset management, including through exchange-traded funds (ETFs), has driven expenses charged for the management of assets down during the period.

Financial markets play an integral role in AUM growth and, consequently, base and performance fees earned by managers. Growth in... Learn More