Market & Strategy
Cost of labor (COL)
Also called: labor cost, wage cost
What employers pay for talent in a specific geography — distinct from cost of living.
Cost of labor (COL) is what employers actually pay for a given role in a given geography. It's an output of supply, demand, and competitive dynamics — not housing or grocery prices.
Compensation decisions should anchor on cost of labor, not cost of living. A role in San Francisco might pay 30% more than the same role in Atlanta because the *talent market* is more competitive there, not because rent is higher. (The two are correlated but not the same.)
Survey vendors report cost-of-labor data; cost-of-living data comes from sources like the Bureau of Labor Statistics, ACCRA, or Numbeo. Use COL for setting pay ranges; use cost-of-living for relocation packages and expense reimbursement.