Industries with the Highest Labor Costs in the US in 2020

1. Hospitals in the US

Labor Costs for 2020: $407.6B

As a primary provider of healthcare in the United States, the Hospitals industry is expected to grow an annualized 2.8% to $1.2 trillion over the five years to 2020, with an expected increase of 1.6% in 2020 alone. This traditionally fragmented industry has recently begun consolidating, largely due to the pressures of healthcare reform. Demand for industry services has steadily grown over the past five years, as healthcare reform legislation broadened insurance coverage and the sinking unemployment rate increased disposable income.

To maintain an advantaged position in this competitive industry, hospitals seek the most skilled and specialized healthcare professionals, thereby increasing... Learn More

2. Commercial Banking in the US

Labor Costs for 2020: $210.6B

The Commercial Banking industry is composed of banks regulated by the Office of the Comptroller of the Currency, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC). Banks generate the majority of their revenue by accepting customer deposits and then lending these deposits out to individuals and businesses at a certain interest rate, which is influenced by different factors, including the federal funds rate, the prime rate and the debtor's creditworthiness.

Industry revenue finally returned to growth in 2015 after declining in each year since 2008. The Federal Reserve's gradual process of interest rate normalization between 2015 and 2018... Learn More

3. IT Consulting in the US

Labor Costs for 2020: $208.0B

The IT Consulting industry comprises companies that help businesses design and implement information technology (IT) systems and infrastructure. Due to the low capital requirements of this industry, a modest number of operators are small nonemployers or independent contractors. Over the five years to 2020, shifting technological trends toward cloud computing and data analytics have caused larger operators to acquire smaller companies and develop new products to stay relevant. For example, Accenture PLC (Accenture) completed its acquisition of Orbium, a technology consultancy for financial services providers, in February 2019. Similarly, International Business Machines Corp. (IBM) completed its largest acquisition in company... Learn More

4. Colleges & Universities in the US

Labor Costs for 2020: $200.7B

The Colleges and Universities industry includes public and private nonprofit colleges and universities that offer academic courses and grant baccalaureate or graduate degrees. Over the five years to 2020, strengthened job markets and better employment prospects have hindered industry demand, causing high school graduates to enter the workforce and forgo postsecondary education. Nevertheless, growth in government funding and private donations have kept industry revenue afloat. Overall, industry revenue is estimated to grow marginally, increasing at an annualized rate of 2.6% to $528.4 billion over the five years to 2020, including an increase of 1.7% in 2020 alone.

According to Federal Student... Learn More

5. Professional Employer Organizations in the US

Labor Costs for 2020: $185.3B

The Professional Employer Organizations industry comprises organizations that specialize in providing human resource management and administrative services through a coemployment relationship. Industry participants are responsible for all aspects of employee management, including hiring, payroll and benefits administration. These companies serve as the legal employers of their clients' employees, although the clients continue to manage their day-to-day operations. Over the five years to 2020, industry revenue has increased at an annualized rate of 5.2% to $206.2 billion, including estimated growth of 1.8% in 2020 alone.

Over the past five years, demand for professional employer organizations (PEOs) has increased dramatically as overall economic... Learn More

6. Medical Group Practice Management

Labor Costs for 2020: $169.2B

Over the five years to 2020, revenue for the Medical Group Practice Management industry has expanded as more physicians have integrated into larger provider networks. Burdened by medical school debt and seeking regular hours, more young physicians are opting out of private practices and instead of joining hospitals or other medical groups. Joining larger practices, such as medical groups, offers several advantages, including increased negotiating power with insurance carriers, greater purchasing power and operating efficiencies. As a result, IBISWorld expects industry revenue to increase at an annualized rate of 1.5% to $354.0 billion over the five years to 2020, including... Learn More

7. Specialist Doctors in the US

Labor Costs for 2020: $155.7B

Revenue for the Specialist Doctors industry has grown at an annualized rate of 4.1% to $321.1 billion over the five years to 2020, including projected growth of 5.7% in 2020 alone. Demand for industry operators is anticipated to be high in 2020 due to the ongoing COVID-19 (coronavirus) pandemic. Overall, specialty practices have benefited from rising total health expenditure and increased demand from an aging population. Moreover, industry growth has been aided by improving access to healthcare insurance. According to IBISWorld estimates, the number of individuals with private health insurance is expected to grow an annualized 0.6% over the five... Learn More

8. Law Firms in the US

Labor Costs for 2020: $115.3B

Operators in the Law Firms industry range from sole practitioners to full-service legal firms mostly serving corporate clients. Industry growth has been modest over the five years to 2020, as businesses have expanded and corporate profit has increased. As the economy improved during the current period, the industry has benefited from increased corporate activity. An increasing number of mergers and acquisitions (M&As), coupled with the rising strength in initial public offerings (IPOs) in 2017 and 2018, is expected to support revenue growth for the industry's top firms over the coming years. These firms receive the bulk of their revenue from... Learn More

9. Management Consulting in the US

Labor Costs for 2020: $108.7B

Management consultants provide advisory services to businesses, nonprofit organizations and public-sector agencies to assist in organizational design, corporate strategy, IT strategy, marketing and sales and logistics. Over the five years to 2020, the Management Consulting industry experienced strong growth during the beginning of the period as private business investment and government consumption and spending precipitated higher demand for advisory services. However, during the latter half of the period, sustained decline in overall corporate profits tapered industry demand as companies under tighter budgets shifted away from consultation services. Overall, industry revenue is anticipated to expand an annualized 1.7% to $247.6 billion... Learn More

10. Primary Care Doctors in the US

Labor Costs for 2020: $98.4B

Doctors that practice within the Primary Care Doctors industry often serve as the first point of contact for individuals seeking healthcare, which has contributed to strong demand over the five years to 2020. The burden of chronic illnesses, which are disproportionately prevalent in older adults, has risen significantly due demographic shifts brought on by the aging of the baby-boomer population. According to IBISWorld estimates, the number of individuals aged 65 and older has grown at an annualized rate of 3.3% over the five years to 2020. Industry revenue is expected to increase an annualized 0.5% to $253.1 billion over the... Learn More