Wide variation in EU employment costs

2002

A new survey by Mercer Human Resource Consulting shows that employment costs vary considerably across the EU. France is the most esxpensive with Greece the cheapest. And contrary to popular belief, EU employment costs are still over 35 per cent lower than in the US.

At the extremes, costs in the most expensive state are three-and-a-half times those of the cheapest. In between, there are significant cost differences that could influence business investment and labour relations. The average annual cost of employment in the EU is 34,143 Euros (£23,606). The highest costs are borne by employers in the north European states, with France, Belgium, Sweden and Germany appearing highest in the rankings. Greece, Portugal, Spain and Ireland have the lowest costs. At the extremes, France’s average employment costs are as high as 48,445 Euros (£31,329), while Greece’s are just 13,718 Euros (£8,871).

David Formosa, European Principal at Mercer, said: "The introduction of the Euro has added greater transparency of employment costs across the EU. This will encourage employers to look at pay and benefit strategies on a pan-European basis."

He added: "The ease of moving certain manufacturing and service industries from one state to another means employment costs are becoming more crucial in business investment decisions."

The UK’s employment costs (35, 638 Euros/£23,047) are well below those of other north European states such as France, Belgium and Germany, and are slightly lower than the median cost across all 15 EU states (36,132 Euros/£23,367).

"At a time when the pound is relatively strong against the Euro, UK employment costs remain competitive against many of the other EU states," said Mr Formosa. "UK social security and benefit costs are just a third of the level of those in France and half of those in Germany." Despite the high cost of benefit provision in the EU, employment costs are still over 35 per cent lower than in the US and some 60 per cent lower than in Japan. Mr Formosa commented: "With employment costs relatively low, the EU can be an attractive place for multinationals to operate. Outside investment is still needed, especially from US companies, to help reduce the EU’s high levels of unemployment."

Pay

Social Security

Mandatory Benefits

Voluntary Benefits

Total benefits as % of pay

Total costs

EU

 

 

 

 

 

 

France

33,106

12,194

2,483

662

46

48,445

Belgium

33,432

11,594

0

2,173

41

47,199

Sweden

31,941

10,483

1,118

0

36

43,543

Germany

31,492

6,865

0

1,575

27

39,932

Luxembourg

33,432

4,570

0

1,672

19

39,673

Denmark

36,322

109

1,694

545

6

38,670

Netherlands

30,327

3,657

0

2,426

20

36,411

Finland

28,402

2,508

4,938

284

27

36,132

UK

31,289

2,003

0

2,347

14

35,638

Austria

26,765

5,862

412

669

26

33,708

Italy

22,968

7,667

2,042

230

43

32,905

Ireland

26,522

3,183

0

1,989

20

31,694

Spain

19,307

6,101

0

965

37

26,374

Portugal

10,671

2,534

762

107

32

14,075

Greece

9,928

2,776

865

149

38

13,718

Other countries (for comparison)

Japan

45,654

5,922

0

5,022

24

56,598

USA

40,601

3,106

528

3,248

17

47,483

India

1,654

365

0

0

22

2,019

China

1,231

535

0

62

49

1,827

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Older Comments

The table shown is excellent but it is a snap shot in time. Where would I be able to review the most recent world wide list of employer contributions for social overhead (national insurance). I would like to be able to do this on a regular basis to track trends. Thanks

Rhory Bell UK

article date is 2002, so info is now 10 years old and could benefit from a refresh..

AND clarification on definition of mandatory benefit (vs social security contributions) and 'voluntary' benefit.

EG today I would say UK Social security cost is 13.5%, no mandatory benefits (unless you count the 20 days minimum holiday, but the cost of that is within the annual salary figure) and no voluntary benefits

Charlie S UK