In this section we look at the unit labor costs and the labor compensation index for the mortgage broker industry. This analysis covers two key data points:

1. Unit Labor Cost Index - this index which is obtained from the Labor Productivity and Cost Data Tables of the Bureau of Labor Statistics shows the index for each unit of labor for the mortgage broker industry.
2. Labor Compensation Index - this index also obtained from the same data sources shows the index of the overall labor compensation.

Unit labor costs represent the cost of labor required to produce one unit of output. The unit labor cost indexes are computed by dividing an index of industry labor compensation by an index of real industry output. Unit labor costs also describe the relationship between compensation per hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor costs, while increases in labor productivity offset compensation increases and lower unit labor costs.

Compensation is a measure of the cost to the employer of securing the services of labor. It includes wages and salaries, supplements (like shift differentials, all kinds of paid leave, bonus and incentive payments, and employee discounts), and employer contributions to employee-benefit plans (like medical and life insurance, workmen's compensation, and unemployment insurance).

When looking at data and the accompanying chart we find that the labor compensation index for the mortgage broker industry has been increasing at a higher rate than the unit labor cost index during the same time period which leads us to believe that the industry has gotten more productive and that increase in productivity has kept the unit cost of labor from increasing at the same rate as the overall labor compensation.

The increase in productivity can mostly certainly be attributed to the improved use of technology in the real estate industry in general and the mortgage brokering industry in particular. The output of mortgage brokers has remained robust with the advent of loan origination software systems, electronic document delivery solutions, along with the wider use of the internet that has made it easier for a small regional mortgage broker to market itself better and bring in more customers through its doors by often taking in applications right from their website and having that data integrated into the loan origination software automatically. The ability to order title and appraisal right from the software and quickly send out pre-approvals, conditional approvals, final approvals and closing documents have all contributed greatly to productivity in the mortgage broker industry.

Quick Links:

1. Go to the Corresponding Template section for this industry.
2. Go to the Corresponding Questionnaire section for this industry.