Statistics Poland

Centre for Labour Market Surveys and Analyses

Statistical Office in Bydgoszcz

Statistical Office in Bydgoszcz
85-066 Bydgoszcz,
ul. Ks. Stanisława Konarskiego 1-3

Labour cost index measures the evolution of labour cost per hour worked borne by the employer in a short period of time, i.e. in a quarter. It is a derivative indicator, calculated on the basis of the results of the surveys: on employment, wages and salaries, working time and labour costs based on obtaining data from the monthly 'Report on economic activity' (DG-1), the quarterly 'Report on paid employment, wages and salaries' (Z-03) and the annual 'Report on employed persons, wages, salaries and working time' (Z-06), as well as the Labour Cost Survey carried out at a 4-yearly frequency by means of the 'Report on labour costs' (Z-02).

In the LCI following classifications are applied:

• the economic activities according to NACE Rev.2,
• NUTS – the whole country.

The LCI covers employees from units conducting activity in sections B-S according to NACE Rev.2.

The Quarterly Labour Cost Index shows short-term trends in the total labour costs, wage costs, other labour costs and labour costs excluding bonuses calculated  per hour worked in sections B-S of NACE Rev.2.

Total labour costs are the sum of wage costs and other labour costs  excluding recruitment costs, expenditures on improving work safety and costs connected with canteens, borne by an employer in order to obtain and maintain a qualified staff.

Wage costs are defined as monetary payments as well as the value of benefits in kind or their equivalents  for employees  for work performed. Components of wage costs include: personal wages and salaries, awards from profit for distribution and balance surplus in cooperatives, annual extra wages and salaries for employees of budgetary sphere entities (refers mainly to sections O, P, Q of NACE Rev.2). Personal wages and salaries comprise: base salaries, premiums and awards, bonuses (e.g. for persons working in unhealthy conditions, for seniority, for serving in management positions), overtime pay, wages and salaries for time off (paid lay-offs, holidays, illnesses), allowances and claim benefits.

Other labour costs are the result of a subtraction between total labour costs and wage costs. Other labour costs include: impersonal wages and salaries, fees, expenditures on business trips, social insurance contributions paid by the employer, contributions to the Guaranteed Employment Benefit Fund, contributions to the Labour Fund.

Labour costs excluding bonuses are the result of a subtraction between total labour costs and bonuses (defined as bonuses and allowances not paid in every remuneration period).

 
Hours worked  are  defined as the sum of normal working hours and overtime working hours spent at work:

• normal working hours are hours worked during normal periods of work;
• overtime working hours is the time worked in addition to hours worked during normal periods of work (overtime).

The statistical unit is an entity or a local unit with 10 and more persons employed.

The LCI is a derivative indicator and information about statistical population, connected with the individual surveys which are the basis for the LCI.

The data refers to Poland at the level NUTS 0.

The LCI data are presented from Q1 2000 to Q4 2022.

The labour cost indices are chain-linked Laspeyres price indices which used the year 2016 as the reference year. 

The LCI is not the independent survey, but derives adequate data from the following statistical surveys:

• quarterly and monthly surveys on employment, earnings and working time which are the short-term business statistics STS (enterprise statistics) – such components of the LCI as wage costs and hours worked are taken from these statistics,
• yearly survey on persons employed, wages, salaries and hours worked – other data on wage costs and hours worked are taken from this survey,
• sample Labour Costs Survey based on business statistics and conducted every 4 years –  the share of wage costs in total labour costs is derived from this survey to calculate the LCI.

The LCI is calculated quarterly.

Data are calculated from the source data according to the guideline prepared on the basis on the Eurostat’s requirements and regulations.

Data are validated (with special IT tools) before sending.

The LCI consists of: labour cost index per 1 hour worked, wage cost  index per 1 hour worked, other labour cost index per 1 hour worked and labour cost index excluding bonuses per 1 hour worked.

Quarterly hours worked are taken from quarterly statistics on employment, earnings and working time.

Quarterly labour costs are based on the wage costs obtained from the short-term statistics on employment and earnings. The share of wage costs in the total labour costs comes from the four-yearly LCS. The quarterly labour costs per 1 hour worked are divided by the same – equivalent ratio for 2016 (the base year) to obtain a total quarterly labour costs index.

Quarterly wage costs index come from quarterly business statistics. Quarterly wage costs  per 1 hour worked are divided by the same ratio for 2016 to obtain quarterly wage costs index.

Quarterly other labour costs are the result of deducting quarterly wage costs from quarterly labour costs. Quarterly other labour costs per 1 hour worked are divided by the same ratio for 2016 to obtain quarterly other labour cost index.

Quarterly labour costs excluding bonuses are the result of deducting bonuses from quarterly labour costs. Quarterly labour costs excluding bonuses per 1 hour worked are divided by the same ratio for 2016 to obtain quarterly index of labour costs excluding bonuses.

The LCI data are adjusted to a form that enables it to create the SDMX files according to the Eurostat's guidance. Information on seasonal and working day adjustments is available in p. 6.4.

The LCI meets the quality requirements specified in this report.

The quality of the LCI data is reported in detail in specified quality criteria below (points 5 to 9).

The main users who are interested in the LCI are:

• government bodies like the Ministry of Development Funds and Regional Policy as well as the Ministry of Family and Social Policy which analyse trends mainly in wage costs index by different types of activities;
• National Bank of Poland which regularly receives the LCI data for its analyses;
• research institutes which examine quarterly costs index by different breakdowns;
• national and foreign employers and investors who are interested in the development of their  employment and investment policy;
• international bodies: Eurostat, European Central Bank.

More information about the LCI availability can be found in p. 9 of this report.

Available data on LCI are sufficient to satisfy user's needs. Users have access to national publications where the data concerning labour costs are presented: yearbooks containing data on the labour market.

There are no missing variables or breakdowns according to the EC Regulations.

100%

Due to the fact that the LCI is not the independent survey, but derives adequate data from different statistical surveys, the accuracy and reliability is strictly connected with the quality of these statistical sources.

See p. 6.1

See p. 6.1

See below. 

As it was mentioned earlier the LCI derives data from several statistical surveys (listed in p. 3.1), so the information on coverage, measurement and non-response errors should be included in quality reports from these individual surveys.

See p. 6.3.1

See p. 6.3.1

See p. 6.3.1

See p. 6.3.1

See p. 6.3.1

See p. 6.3.1

See p. 6.1

See p. 6.1

See p. 6.1

Program JDemetra+, TRAMO/SEATS method

Pre-adjustment:

• regARIMA, 1 regressor connected with the changing number of working days in a week resulting from national holidays (if significant),
• leap year effect (if significant),
• Easter effect (if significant),
• outliers (AO, LS, TC) with automatic detection supported by additional analysis and a priori knowledge.

Seasonal adjustment:

• automatic model selection with additional non-automatic verification of problematic cases,
• additive or multiplicative decomposition,
• direct adjustment for WAG,OTH, TXT and indirect adjustment for TOT.

Revisions:

• model updated once a year including revision of historical data.

Overall policy on data revision.

According to Eurostat's rules revisions are made after the change of the base year.

The last data revision due to the methodological changes took place in 2010.

See p. 6.5

As for timeliness, availability of data depends on the availability of data from different surveys which are the basis for the LCI calculation.

Not applicable.

Not applicable.

Files with final LCI data are prepared within 70 days of the end of the reference period, whereas flash LCI data at t+45 days.

The LCI quarterly data and weights for 2022 were transmitted on time, by the following deadlines:

LCI Q1 2022:  09.06.2022

LCI Q2 2022:  08.09.2022   

LCI Q3 2022:  09.12.2022   

LCI Q4 2022 and weights 2022:  11.03.2023

In addition, the flash LCI quarterly data were transmitted on time, by the following deadlines:

LCI Q1 2022:  15.05.2022

LCI Q2 2022:  14.08.2022   

LCI Q3 2022:  14.11.2022   

LCI Q4 2022: 14.02.2023

Not applicable.

Not applicable.

The LCI quarterly series from 2000 onwards were recalculated according to the NACE Rev.2 classification.

Series are available from 2000.

The LCI statistics are reconcilable with other domains, for example LCS or national accounts.

The comparison with LCS is presented in detail in the LCS Quality Report.

Below in p. 8.5 there is a comparison with the compensation of employees from the national accounts.

The annual statistics with which the LCI is compared are National Accounts.

Coherence refers to comparability of data from different domains and sources. In the case of the LCI data, they are compared with national accounts that is the essential source for the aim of coherence analysis.

A comparison of unadjusted annual  growth rates for the LCI (total) and the NA variable “compensation of employees” by NACE Rev.2 sections is presented in Table 1.

Table 1: Comparison of unadjusted annual  growth rates for the LCI (total) and the NA variable “compensation of employees” by NACE Rev.2 sections B-N

*Source: National accounts by institutional sectors and sub-sectors 2018-2021, Statistical analyses, Statistics Poland, Warsaw, July 2023.

There are differences between NA data and the LCI data because the coverage of data for NA  includes the households sector and the "hidden economy" which are not included in the LCI. In addition there are also differences in the approach to employment costs and compensation costs.

Total compensation of employees is the component of the income account and includes: wages and salaries, contributions to compulsory social security paid by employers and employees and other costs such as funded scholarships, company social benefit fund, travelling allowances, parliamentary allowances. This compensation doesn't include payments from profit and balance surplus in cooperatives which, as the one of main components, is included  in  employment  costs for the aim of the LCI.

On the other hand employment costs from the LCI do not include the company social benefit fund (e.g. canteen costs are excluded), funded scholarships and parliamentary allowances. It is worth to notice also that  employment costs for calculation of the LCI refer to hired employees on the basis of an employment contract. Compensation costs from the NA refer to total employment: hired employees, self-employed people, outworkers, apprentices.

The main remarks on data from national  accounts and labour costs  index are presented in table 2. 

Table 2: The main remarks on data from national accounts and labour costs index

Data are coherent within a dataset.

Data on the LCI are available in the form that meets user's needs e.g. tables, methodological description, definitions of basic indicators.

Some methodological information is also available in “Methodological report. Statistics on labour market, wages and salaries” (only Polish version) and in “Glossary” containing definitions of statistical terms (both available on the Statistics Poland website).

See p. 9

For the first time, the news release ‘Labour cost index in the quarters of 2022’ was prepared, it was published on 20 April 2023 https://stat.gov.pl/en/topics/labour-market/working-employed-wages-and-salaries-cost-of-labour/labour-cost-index-in-the-quarters-of-2022,20,1.html.

The data related to labour costs are presented in publications such as:

Concise Statistical Yearbook of Poland 2022, available at:

https://stat.gov.pl/en/topics/statistical-yearbooks/statistical-yearbooks/concise-statistical-yearbook-of-poland-2022,1,23.html

Statistical Yearbook of the Republic of Poland 2022 is available at:

https://stat.gov.pl/en/topics/statistical-yearbooks/statistical-yearbooks/statistical-yearbook-of-the-republic-of-poland-2022,2,24.html

The main online databases containing up-to date LCI data is Eurostat's database.

In 2022 , work was underway to launch a new website for the Knowledge Databases on the website of Statistics Poland. It is a platform related to open data. It contains variables such as: labour cost index (TOT), labour cost (average labour cost of 1 hour paid [PLN], monthly average labour cost per 1 employee [PLN])

Other Polish publications presenting LCI are mentioned in p. 9.2.

Not applicable.

No microdata used.

See p. 9

The methodological information is available in publications mentioned in p. 9.

The Statistics Poland applies to the quality requirements. The documentation is available on the Statistics Poland website at:

https://bip.stat.gov.pl/en/activity-of-public-statistics/quality-in-statistics/

Not applicable.

Not applicable.

Due to the fact that the LCI is not an independent survey, but derives adequate data from other statistical surveys, it does not generate any burden on respondents.

No microdata are applied in the LCI. The results are aggregated and presented by NACE Rev.2 sections B-S.

See p. 11

See p. 11

We can infer that volatility of the LCI is caused mainly by volatility of total labour costs. Fluctuation could be caused by changes on labour market (wages and salaries, employment, unemployment rate, irregular payments). Labour cost index for particular NACE sections is calculated directly from quarterly data concerning  labour costs and hours worked.

The number of hours worked in given period is influenced by factors causing the changes of time not worked, paid or unpaid.

Time not worked unpaid does not influence the labour cost of 1 hour worked. However time not worked paid raises the labour cost of 1 hour worked, because the wages and salaries for time not worked are included in total labour costs.

The most common reasons for time not worked and paid are (among other things):

• holiday leaves,
• sick leaves,
• stoppages paid.

The most common reasons for time not worked and unpaid are (among other things):

• leaves without pay,
• absences without excuse,
• strikes.

Table 3: Hours worked for NACE Rev.2 section C in quarters in 2016-2022

Table 4: LCI index for NACE Rev.2 section C in quarters in 2016-2022 (base year 2016)