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. 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

3. Specialist Doctors in the US

Labor Costs for 2024: $212.9B

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

4. 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

5. 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

6. Office Staffing & Temp Agencies in the US

Labor Costs for 2024: $178.7B

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

7. 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

8. Scientific Research & Development in the US

Labor Costs for 2024: $154.1B

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

9. Law Firms in the US

Labor Costs for 2024: $151.4B

Operators in the Law Firms industry range from sole practitioners to large, full-service legal firms mostly serving corporate clients. Industry revenue growth has been modest over the past five years. The industry benefited from economic growth through most of the period but was negatively affected by the coronavirus. Overall, industry revenue increased at a CAGR of 1.6% to $397.1 billion over the past five years, including an increase of 0.7% in 2023 alone.

Greater demand for practices tied to high-growth sectors has boosted industry revenue over the past five years. Revenue growth has been caused by demand for litigation, intellectual property... Learn More

10. Engineering Services in the US

Labor Costs for 2024: $145.9B

Engineers develop structures, machines, materials and other processes and systems. Services include providing advice, feasibility studies, designs and technical services during construction or development. Engineering services revenue has grown at a CAGR of 3.3% to $360.1 billion over the five years to 2023, expanding in line with its historical growth. However, COVID-19 led to less demand across nearly all downstream markets in 2020. The economy's quick recovery contributed to strong revenue increases in 2021 and 2022. Despite ongoing challenges in certain markets, such as nonresidential construction, revenue will grow 0.7% in 2023 alone.

Large engineering companies have increasingly invested in technology... Learn More