Wage costs per hour worked are the total costs that an employer has for an employee, divided by the number of productive hours that employee has worked. These costs include not only the gross salary but also employer costs such as holiday pay, premiums, bonuses, and secondary employment conditions.
In all sectors, wage costs per hour worked increased in 2024. The increase is largest in the rental and other business services sector (9.9 percent), where the total number of worked hours in 2024 has decreased the most.
Also, in agriculture, forestry, and fisheries (8.5 percent) and public administration and government services (7.2 percent), the wage cost increase is relatively large. In these sectors, total wage costs increased more than the hours worked. In financial services, it is the opposite, with an increase of 2.7 percent being the least strong.
A change in the composition of the workforce affects the average wage costs. If the share of older workers or the education level increases, the average wage costs per hour worked rise. This so-called structural effect is 0.4 percentage points in 2024: there are proportionally more employees with relatively high wage costs than a year earlier.
Corrected for these changes in the employee population, the pure wage cost increase in 2024 is 5.5 percent. This is the so-called price of labor.
The total wage costs per hour worked of employees have increased by 35.1 percent in the period 2014-2024. The price of labor increased by more than 34.6 percent. Therefore, the wage costs have increased by 0.4 percentage points as a result of the structural effect.
In the period 2014-2024, wage costs per hour worked increased the most in public administration and government services (44.8 percent), followed by information and communication (41.8 percent) and health and social care (37.1 percent). The smallest increase was recorded in rental and real estate trade (26.2 percent).
Adjusted for changes in the employee structure, the wage cost increase is largest in information and communication, followed by public administration and government services. The smallest wage cost increase is in financial services, where collective labor agreement wages have increased the least over the past ten years.
The structural effect is largest in agriculture, forestry, and fisheries (5.1 percentage points). In that sector, the share of older workers and people with higher vocational or university education in the working population has increased. In education, it is the opposite, and the structural effect is the most negative.
