Industries with the Highest Labor Costs in the US in 2025

1. Hospitals in the US

Labor Costs for 2025: $506.7B

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

2. IT Consulting in the US

Labor Costs for 2025: $308.0B

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

3. Colleges & Universities in the US

Labor Costs for 2025: $273.6B

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

4. Specialist Doctors in the US

Labor Costs for 2025: $225.9B

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

5. Software Publishing in the US

Labor Costs for 2025: $213.2B

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

6. Portfolio Management & Investment Advice in the US

Labor Costs for 2025: $201.5B

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

7. Management Consulting in the US

Labor Costs for 2025: $197.6B

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

8. Professional Employer Organizations in the US

Labor Costs for 2025: $179.5B

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

9. Office Staffing & Temp Agencies in the US

Labor Costs for 2025: $174.5B

Office staffing and temp agencies have recorded growth because of a growing US labor market. COVID-19 created unfavorable economic conditions, which caused the industry and the labor market to decline significantly over 2020. Despite the unprecedented losses faced in 2020, industry-wide revenue still grew at a CAGR of 1.8% to $248.7 billion over the past five years, despite a 0.6% decrease in 2023.

This industry relies on the strength of the current business landscape and economy to ensure demand. One key driver of this industry is corporate profit, which will be affected by recession concerns and weakened consumer demand in 2023.... Learn More

10. Scientific Research & Development in the US

Labor Costs for 2025: $167.4B

Scientific research and development facilities undertake physical, engineering or life sciences research and development (R&D). Companies that undertake R&D to support their primary operations, like pharmaceutical corporations and government entities, aren't included in this industry. Revenue for the scientific research and development industry increased an annualized 2.3% to $223.7 billion over the past five years. While the COVID-19 pandemic provided increased government funding for many research facilities, dampened private funding in the pandemic and following recovery has been slow to return. In response, industry revenue will decrease 1.7% in 2023.

The federal government is the source of just over half the... Learn More