HR Glossary

Labor Cost

Table of contents

Labor cost definition

Labor cost refers to the total sum of wages, benefits, taxes and insurance paid to employees by an employer.

what-is-labor-cost

Labor cost definition

Labor cost refers to the total sum of wages, benefits, taxes and insurance paid to employees by an employer.

Labor cost is divided into direct and indirect costs where direct costs include wages for the employees that produce a product while indirect costs are associated with support labor, such as employees who maintain factory equipment.

Labor costs can also be classified as fixed costs or variable expenses.

See TalentLyft in action

Applicant Tracking, Recruitment Marketing, Sourcing and Talent CRM software are powerful alone, but unstoppable when used together!

Related content

  • Behavioral-Based Interview

    Behavioral-based interview is an interviewing technique which employers use to evaluate candidate's past behavior in different situations in order to predict their future performance.➡️ Download The...

  • Cafeteria Plan

    Cafeteria plan refers to a type of employee benefit plan in which an employer offers employees a set of different taxable and non-taxable benefits.Cafeteria plan definitionCafeteria...

  • Counter Offer

    A counter offer is an offer given in response to a salary offer from an employer. It implies rejection of the original offer.Counter offerOffer given in...

  • Direct Placement

    Direct placement refers to the bringing together of a potential employee and a prospective employer for the purpose of a permanent employment relationship. Introduction to Direct...

Explore more topics

  • Recruitment Metrics

    If you can't measure it, you can improve it. Or something like that. Either way, tracking metrics is in the recruitment process is crucial to see what works and what doesn't. Dive in to this topic to learn all about the most important metrics to track and how they can help you optimize your hiring process.

    Learn more

  • SMBs HR

    Unlock effective HR strategies tailored for small and medium-sized businesses (SMBs). Learn how to manage recruitment, employee engagement, compliance, and talent development on a budget. Discover tools and best practices to streamline your HR processes and build a strong, thriving workforce in your growing business.

    Learn more

  • Skill Assessments

    Enhance your hiring process with skill assessments. Evaluate candidates' abilities and competencies through tailored assessments designed to measure job-specific skills. Learn how to incorporate skill assessments to identify top talent, ensure the right fit, and make data-driven hiring decisions that improve performance and reduce turnover.

    Learn more

  • Mastering the Interview

    Conducting an effective interview means getting the best and most out of a candidate in a limited time frame. To do that you need to ask the right questions. From general questions to more strategic ones, here you'll find all the questions you need to get what you need to help you choose the best candidate.

    Learn more

  • Recruitment Trends

    Stay up-to-date with the latest trends shaping the recruitment industry. From AI and automation to remote hiring and employer branding, discover how modern recruitment strategies are evolving. Learn to adapt to these trends and enhance your talent acquisition process to attract top candidates in a competitive market.

    Learn more

  • Turnover and Retention

    Reduce turnover and improve retention with proven strategies. Learn how to identify the causes of employee turnover, implement retention programs, and create a positive workplace culture that fosters loyalty. By focusing on employee engagement and satisfaction, you can retain top talent and strengthen your organization’s long-term success.

    Learn more

Simple and affordable recruitment software

Schedule a Demo Start Free Trial