European survey of employment costs 2005

INTERNATIONAL REWARD

Employment costs in Western EU countries are more than four times those in the East, according to a new survey by employee benefits consultancy Mercer Human Resource Consulting.

At the extremes, employment costs in the most expensive countries are over ten times those in the least costly countries. Mercer defines employment costs to include national average pay, social security and other mandatory and typical voluntary benefits including pension, healthcare and disability benefits.

Key survey findings

The highest annual employment costs are borne by Belgium, Sweden and Germany, closely followed by Luxembourg and the UK.
Belgium’ s average employment costs are as much as &#8364 53,577 (£36,507).
The UK’ s employment costs have gradually increased over the last two years and are now &#8364 46,541 (£31,713), which is 40% higher than in the US.
In contrast, Latvia and Lithuania have the lowest -- Latvia’ s are just &#8364 4,753 (£3,239).
The average cost of employment across all EU states surveyed is &#8364 28,269 (£19,262).
On average, employment costs in the EU are around 15% less than in the US. But, taking Eastern EU countries out of the equation, costs in Western EU countries are 23% higher.

Benefits as a percentage of earnings

Putting aside pay, the survey reveals that benefit costs have a significant influence on total employment costs. Based on employees on national average earnings, total benefit costs (including social security, mandatory benefits and typical voluntary benefits such as occupational pensions) range from less than 10% of national average pay to as much as 50%. The lowest benefit costs are in Denmark, Netherlands, UK and Luxembourg. At the other extreme, Greece, Belgium and France have the highest costs.

A cross-country comparison of employment costs

Country	National average pay (£)	Social security (£)	Mandatory benefits (£)	Voluntary benefits (£)	Total pay & benefits (£)
Europe
Belgium	24,889	8,632	-	2,987	36,508
Sweden	24,778	8,102	867	2,230	35,977
Germany	27,367	5,638	-	1,368	34,373
Luxembourg	28,333	4,151	-	1,417	33,901
UK	26,507	2,025	-	3,181	31,713
Denmark	30,823	92	-	462	31,377
France	21,494	7,436	1,042	1,290	31,262
Ireland	20,407	2,194	-	3,469	26,070
Netherlands	20,002	2,060	-	1,600	23,662
Italy	15,511	4,945	1,379	155	21,990
Spain	14,040	4,437	-	1,404	19,881
Austria	15,209	3,293	234	760	19,496
Finland	13,999	1,331	2,377	140	17,847
Greece	12,030	3,363	-	2,286	17,679
Portugal	9,623	2,285	-	962	12,870
Slovenia	9,086	3,519	-	182	12,787
Hungary	4,858	1,627	-	291	6,776
Czech Republic	4,643	1,625	-	232	6,500
Poland	4,426	890	44	266	5,626
Estonia	3,875	1,279	-	39	5,193
Slovakia	3,267	1,026	-	163	4,456
Lithuania	2,894	897	-	58	3,849
Latvia	2,589	624	-	26	3,239
Other
Japan	24,958	3,531	-	2,745	31,234
USA	19,558	1,496	-	1,565	22,619
China	5,772	3,400	-	289	9,461
India	1,127	207	-	45	1,379

Source: Mercer Human Resource Consulting.

Want to know more?

Title: European Survey of Employment Costs, Mercer Human Resource Consulting.

Availability: Further details are available from client services, Mercer global information services, tel: +41 22 869 3000 or visit www.imercer.com

Mercer Human Resource Consulting is one of the world's leading consulting organisations. It has more than 14,000 employees serving clients from some 145 cities in 41 countries and territories worldwide. To find out more visit www.mercerhr.com

Posted 19 April 2005

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European survey of employment costs 2005